In my previous blogs, I mention how important it is to have a great restaurant concept. In all honestly, though, if you set up shop in a bad location, it will still never work. Finding a good restaurant location is a vital piece to the puzzle of having a successful restaurant.
Where I live, there is a certain location that has changed restaurant ownership five times in the last four years. All different concepts, of course. There was a Mexican restaurant, a sushi restaurant, a Korean barbeque, a cafe, and even a Mediterranean restaurant. They all came in thinking it would be a piece of cake, like many naive restaurant owners. This article is here to inform you how NOT to make the same mistakes they did. At the end, I will get into more details about why this location never worked and never will work. In fact, it’s under brand-new ownership as we speak!
Find An “Up-And-Coming” Location
When my uncle was looking for his second restaurant, he couldn’t afford the Times Square prices. But what he did was the most genius thing ever. He bought a corner restaurant on Broadway in Upper Midtown. The rents at that time were way cheaper, and he figured that in 10-20 years, success would expand to the Upper West Side. He was wrong. It expanded a lot quicker than that and drove up prices. But he’d locked in a long-term lease that was significantly lower than everyone else who started opening up shop around him.
When you are looking for your restaurant location, find a town (or street, if it’s in an urban area) that is up-and-coming with lower rents than the area around it. You can do this by going to local town board meetings discussing future developments or by talking to local real estate agents, local business owners, and residents. Go out and socialize! They may soon be your new customers.
Piggyback Off Big Franchises
This is the single best way to find a solid restaurant location. Big franchises pay big money and have large teams that do all the work for you. Look around and see if there are big franchises, like Starbucks and Cheesecake Factory, or clothing stores like Gap, etc. Their presence is a good sign that your location is up-and-coming, especially if these stores are new to the area.
A Cheaper Alternative: Strip Malls
If you don’t have much money, a great way to get started is to open a business in a strip mall. The rents are relatively cheaper and most have a lot of parking spaces. Be aware that strip malls tend to have hidden costs and high prices for maintenance and utilities, so read your contract carefully. Another thing to be careful about in many strip malls is that they often have rents based on a percentage of profits. These should be 5-10% of your gross sales per square foot.
This is by far my favorite method of choosing a new restaurant location because rent can be cheap depending on where it is. Your spot could even be a little bit out in the suburbs. Then, more likely than not, you will have the building all to yourself.
Please note that this is the riskiest way to choose your new restaurant location. You need to be 100% sure that your concept and cuisine will attract people near and far.
How do you find this out? Sample your food with friends and family first. Even strangers! Invite your friends’ and family’s friends and family over for a big dinner. Have them fill out a paper with different questions that will better your menu’s dishes. Questions could be along the lines of:
- How much would you pay for this dish?
- How far would you drive for this dish?
- Would you add any other seasonings? More salt?
- Do you like the presentation?
- What would you do to make it better?
Lastly, keep in mind that most destination restaurants are in historic buildings, with an above-and-beyond atmosphere or a stunning view. Or they have celebrity chefs to attract hype.
Local Zoning and Codes
One of the biggest advantages of buying an existing restaurant is not having to go through the hassle of local zoning and community approval investigations. Even looking at destination locations, you can still find one that is turnkey. With that said, my biggest advice is to hire someone that is very familiar with the zoning and code in the local area. Ideally, you want a company that has built a restaurant before. I would focus on that first. Then, maybe bring them in with you upon inspection, so they can give you a better idea of how much it would cost and if the property will be a hassle to work on.
In addition to local zoning ordinances, you will also have to meet fire, health, and building codes. This could mean installing new plumbing or updating your electrical system. Some examples include proper placement of fire exits, fire extinguishers, sprinkler systems, and fire suppression systems.
Visibility and Accessibility Of Your Restaurant Location
On your checklist of finding the right restaurant location, some things might not be checked off, but having a visible and accessible location is a must. Sometimes, the building owner will have you create a sign that blends in with their building theme. Meaning that there could be 5 businesses in that same building and all the businesses’ signage will be the same color, font, and size. I would not recommend signing your lease under those kinds of building terms, because your brand is most important to your restaurant’s success. Customers need to become familiar with your logo as well as your colors, fonts, style kit, etc.
Oftentimes, I see many establishments with a weird entrance or one that’s very easy to miss. You want to try and avoid that as much as possible. When designing your exterior, design around the main entrance. That is the focal point of your storefront.
Lastly, you want to check that there aren’t any public works projects that may block off your entrance, and look for a good flow of traffic, both coming in and exiting your restaurant’s location.
Just like visibility and accessibility, having a large parking area is a must if you want a more sit-down establishment. Over my lifetime, I’ve seen so many sit-down restaurants fail because they didn’t have enough parking spaces. I even lost a potential client once because they were not interested in Golden Web Media getting them more business. The reason? They didn’t have enough parking spaces for their sit-down restaurant.
Another thing you should consider if you are on a busy street is street parking. Make sure you have ample street parking on the main and side streets. Valet parking is not a must unless you are opening a fine dining restaurant.
I promised you in the introduction that I would explain why that business in my town keeps failing, so let’s get to it. Although it is in an up-and-coming location, the restaurant is on the highway. A corner lot, at that. It did piggyback off franchises because many car dealers on this strip of highway are selling their spots to franchises like Popeyes, Krispy Kreme, and Chick-fil-a.
You must be thinking that the location is perfect, but there’s a catch. They failed to check off parking, accessibility, and visibility on their list. Food there is always amazing and so is customer service, but what I just mentioned could make or break your restaurant’s success. The main reason why it fails is because it’s on a highway with around eight parking spots. Not only does it not have enough parking spaces of its own, but you obviously can’t park on the highway and you couldn’t park on their side street.
Another main aspect as to why that restaurant location is no good is the flow of traffic. In terms of traffic entering the location, it’s practically nonexistent. Four of the eight parking spaces are about five feet from the highway, making it very difficult to exit and enter the parking spaces⎯if you even notice them. Now, you might say, well, how about a delivery-operated restaurant concept? I say it still wouldn’t work. You would still need more parking spaces for delivery drivers, as well as workers. As you can see, it’s important to consider all aspects of a location in order to set your restaurant up for success. If you have any questions about finding your restaurant location, feel free to contact us.
By: Mina Ibrahim