Choosing A Location For Your Restaurant


The location of your restaurant will be a key component in its success. While this is common sense, far too many owners settle for the cheapest location – or the one that’s available right now – instead of paying due diligence to finding the best location. In the restaurant industry, location is as important as it is in any element of commercial real estate – perhaps even more so because of the impulsive nature of the hospitality industry, in which dining choices are often made on the spur of the moment.

The right location for your restaurant involves a canny combination of the right factors, including:       

  • Demographics
  • A great building
  • The right layout
  • A great sales/lease price

The first step in the process is knowing your priorities, and the second step is considering where you want to be twenty years from now. This business requires a long-term vision for success, and the starting point is having the right building in which to grow.

Know Your Surroundings

One of the first questions that an owner must ask himself is whether he prefers to be located in a stand-alone building or within a shopping center. While stand-alone buildings tend to provide a unique venue that is less dependent on the welfare of the surrounding community, shopping centers are increasingly providing great opportunities for restaurants.

One byproduct of the struggling economy – and the growth of the Internet – over the last six years has been the downfall of the upscale commercial development. There are more cities than ever with under-occupied commercial/retail centers. These venues are often looking for restaurants to serve as anchors, leading to lower rental prices and income-dependent leases.

This can be a great opportunity for the new restaurateur looking to minimize start-up costs. But this provides an even better opportunity for the established restaurant owner, whose track record of success can be attractive to struggling property owners. This is the reason that far more new owners are looking exclusively at relatively new commercial developments.

Know Your Demographics

Restaurant owners have to know who their restaurant is catering to, and how that matches with the demographics of the surrounding neighborhood. Upscale restaurants have to be within reach of corporate and affluent clientele. Pizza joints and sandwich shops should be within reach of business and working class neighborhoods.

Awareness of demographics is especially important for niche and ethnic restaurants, which are often catering to a smaller population segment. While Greek restaurants do not necessarily have to find a location near a Greek population, it is worthwhile to look for precedents. It can be helpful to find locations where there exists a track record of success for similar restaurant concepts.

Know Your Competition

The restaurant business is part of a growing trend toward competition-based locations. Just as Lowe’s hardware stores are cropping up near or adjacent to Home Depots in cities all over the country, restaurant owners are increasingly seeking locations near successful competitors. This might mean that an independent steakhouse would seek a building near a Ruth’s Chris, or a sandwich shop should find a location next to a Subway.

The logic behind this strategy is clear. Successful restaurants get the surrounding population thinking about dining out. Families are increasingly dining out more than once a week. The spending dollar for restaurants is growing as more options become available. Owners shouldn’t shy away from the competition when seeking the right location.

Know Your Ideal Layout

It is next to impossible to find the right layout when looking at previously occupied buildings. An owner who has a flexible concept in mind will be more likely to find the right building. This means that it’s more helpful to know what won’t work; or what the building cannot look like.

The key points relating to building layout are:

  • Having enough room for equipment in the kitchen
  • Maximizing dining room space
  • Matching the layout with the concept
  • Simply having enough room

The restaurant owner who is familiar with layouts that will not work can avoid wasting time and streamline the process of finding the right location.

Ask the Right Questions

It goes without saying that a few essential questions must be asked of any location. These include:

  • Is it located in a safe neighborhood?
  • Is it zoned for this type of business?
  • Does it need repairs?
  • Does it need updated equipment?
  • Does the lease/mortgage fit the budget?
  • Is it located in a seasonal environment?
  • Is there nearby accessible parking?

These are a few of the questions that must be asked of any location prior to giving it the green light. Memorizing these questions and knowing your priorities is critical for finding the location that is going to support a thriving business for years to come.