7 Key Considerations of a Restaurant Location Strategy

5 major characteristics of a good restaurant location

Food industry trends change regularly, but one aspect of running a restaurant is the importance of location. Regardless of the type of eatery you’re planning, where it opens will have a massive impact on its success.

Here are the top five characteristics of restaurant locations that work well.

1. Easily accessible

Your customers need to be able to find you; that much is clear. If you choose a spot tucked away in a quiet backstreet, you’ll need to compensate for that by having a top-notch marketing game. Don’t forget to consider more specific accessibility issues as well. Not all potential customers are mobile enough to walk up five stairs.

2. Safe neighborhood

It’s crucial to spend some time researching any areas you’re considering for your restaurant before deciding. Customers will steer clear if you’re unwise enough to set up somewhere with a crime problem. It’s also likely to cause you problems with staff retention. Nobody wants to feel unsafe at work or go home afterward.

3. Affordable space

You probably don’t have unlimited funding. That means you must ensure your chosen location is affordable enough to fit your budget. You can access accurate, real-time financial data. This will help you estimate potential costs and keep track of cash flow to set a realistic budget for choosing a property.

4. High foot traffic

You’ll try to grow your customer base quickly during those crucial first few weeks after launch. You'll likely get a few walk-ins if you select an area with high foot traffic, like a busy town center shopping district. Granted, opening in a prime location can mean paying more rent, so it’s a balancing act.

5. Limited competing businesses

It’s okay for some other restaurants already established in the area. This can be good because it shows a market for your services. However, what you don’t want is too much direct competition.

Opening your taco house there obviously isn’t a great idea if there are two Mexican restaurants on the same block.

7 critical considerations of a restaurant location strategy

Let’s dig down a little deeper into the details. You should focus on seven elements when planning where to locate your restaurant.

1. Restaurant type

The first is what type of restaurant it is. In particular, whether it is a fast-food place or a full-service restaurant.

a. Quick service

Footfall is key here. Most trips to quick-service restaurants are spontaneous. That means your whole business model will depend heavily on people walking in when they’re hungry. So you may need to pay more for a prime location. On the other hand, you won’t need as much space, since turnover will be fast.

b. Full service

Full service is a different proposition altogether. You’ll rely more on building a reputation and selling your restaurant brand experience. You’ll also need much more space, not only because your customers will linger longer. Your guests will need parking facilities; if none are nearby, you must provide some.

However, your restaurant will be a destination location people plan to visit in advance. You can afford to be in a quieter, less expensive area.

2. Restaurant location budget

Be realistic about your budget. There’s no point in choosing your dream location only to find it’s unaffordable. Remember how much you can spend on a venue – and stick to it.

You’ll need to factor in other overheads as well. One way to keep track of your cash flow is by using one of the many restaurant accounting software options available. They are designed to help you easily manage your business’s finances, inventory, and payroll.

3. Ample operating space

One thing to be careful of is to ensure you don’t underestimate how much space you’ll need. Remember that the kitchen and the storage areas will take up a large proportion of the square footage of your restaurant. Always go slightly more significant than you think is necessary.

For example, you may need extra preparation space if you offer a delivery service. (You probably should, as 61% of consumers order takeout or delivery once a week.)

4. Neighborhood demographics

It’s vital to understand who lives and works in the area where you’re planning to launch your restaurant. Is it mostly retired couples? Families with kids? Young professionals?

It’s not a great idea to open a high-end restaurant if nobody in the neighborhood can afford to eat there. You have to be sure that you’ll get some local engagement because it’s challenging to succeed in the long term if you don’t.

5. Complementary businesses and facilities

Demographics might be less concerned if you are in a very mixed area. However, you should always pay attention to complementary businesses and facilities. After all, these have the potential to supercharge your restaurant’s success.

For example, where’s the best place to open a health-focused café? Well, you’ll probably do a roaring trade if you set up next door to a gym or sports center. When you research the areas you’re thinking about, don’t forget to note what else is already there.

6. Business zoning laws

One practicality that’s critical to get right is ensuring that your business abides by local zoning laws. Failure to do so can lead to disaster later.

7. Competitors

As we said before, a little competition isn’t necessarily a problem. If there are already a few restaurants in a particular location, it demonstrates that running a restaurant there is viable.

The critical thing to remember is that you must be sure you’re offering something your competitors aren’t. That could be a different style of cuisine. But it could also mean additional value, like providing half-price food for children in a family-heavy area.

Final thoughts to go

Selecting a restaurant location can be daunting, as many variables exist. Sometimes, it can seem as though all the best spots have already been taken.