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Restaurant Location: 10 Practices to Find the Perfect Spot for Your Restaurant

Discover 10 proven practices for finding the best restaurant location. Boost your success with expert insights on picking the right commercial space.

6 mins readSeptember 05, 2023

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Have you been exploring the idea of venturing into the restaurant industry? Selecting the perfect restaurant location is crucial for your venture's success. A well-chosen spot can make your culinary vision thrive, drawing a consistent stream of customers and securing long-term prosperity.

Below you'll find 10 proven practices to guide you through the challenges of finding the ideal restaurant location.

The Significance of Your Restaurant's Location

Before opening a new restaurant, you should know that a well-chosen spot can attract more customers because it is easy for them to find your restaurant. Workers on their lunch break or couples on an evening stroll may come across your restaurant and decide to stop in for a bite to eat.

However, a poor location can set you back. Customers may notice other restaurants first, or they may decide not to stop if there is no place to park. Remember the following three pointers while you review this guide:

  • Choosing the right location ensures visibility, increasing your restaurant's exposure to potential customers.

  • A location with ample parking and easy transportation provides convenience for customers visiting your restaurant.

  • Understanding your target customers is essential. Selecting a location that meets their needs can help boost your restaurant's appeal.

Restaurant Opening

Opening a new restaurant goes beyond getting licenses and permits. Whether you're opening your first eatery, or expanding your food truck into a full-service restaurant, you'll know what to do by the time you're read this.

10 Essentials When Selecting Your Perfect Restaurant Location

Choosing a location that enhances your restaurant's success can be overwhelming. Fortunately, there are 10 practices to guide you through the process of selecting the perfect spot for your venture.


1. Ensure Compliance with Zoning Laws


The first step is to check your local zoning laws to avoid legal issues.

Zoning laws, established by local governments, dictate how land parcels within specific regions can be used. A location not zoned for commercial use may prohibit restaurant operations without a lengthy zoning change process.

Commonly encountered local zoning regulations include:

  • Construction limitations
  • Sound level constraints
  • Regulations for animals and pets
  • Waste management rules
  • Property easements.

Additionally, parking and accessibility can also be influenced by these zoning laws, and understanding future zoning changes can provide insights into upcoming neighborhood developments, directly affecting the restaurant's prospects.

More info: Simply search for "[Your State or County] official website" in your favorite search engine, then navigate to the planning or zoning section.


2. Analyze Your Target Customer Audience


Choosing a location that appeals to your target customers is crucial. Selecting an area full of the demographics you have in mind increases your chances of expanding your customer base. Examples inlcude:

  1. Upscale Fine Dining Restaurant: Consider positioning near luxury residential areas, high-end shopping districts, or business districts with corporate offices. The clientele here may be seeking a sophisticated dining experience for business meetings, special occasions, or simply an elegant night out.

  2. Health-focused Salad Bar or Juice Shop: Positioning near gyms, yoga studios, or office areas with health-conscious professionals can be a smart choice. Patrons who prioritize health and fitness are more likely to seek out nutritious meal options.

  3. Ethnic Cuisine Restaurant: If you're offering a specific ethnic cuisine, consider areas with a significant population from that ethnicity or cosmopolitan areas where people are more adventurous with their food choices.

  4. Bakery or Dessert Shop: Proximity to schools, colleges, or theaters can be beneficial. Students and theater-goers often look for places to grab a quick snack or dessert before or after their activities.


3. Evaluate Foot and Vehicle Traffic


Foot traffic and visibility are essential considerations when opening a restaurant. By locating your establishment in an area with heavy foot traffic, you increase the likelihood of attracting potential customers. Conversely, a location with limited foot traffic may result in reduced visibility.

Additionally, you want to accommodate customers who arrive by car. Insufficient parking options may lead drivers to choose alternative dining options. Striking a balance between foot and car traffic enables you to cater to a diverse range of customers and maximize your restaurant's visibility.

Here are 3 demographics a tools that give foot traffic counts:

  1. Placer.ai provides free foot traffic data for various venues, with options to buy advanced reports.

  2. AreaVibes offers geographic lifestyle and demographic insights, emphasizing community population, amenities, and walkability, but not foot traffic counts.

  3. LOIS's free "Property Search" tool allows users to view commercial properties and obtain reports detailing foot traffic and category spending in surrounding areas.


4. Stay Visible to Stay Memorable


The statement "out of sight, out of mind" is true in the restaurant industry. Your customers need to view your restaurant as they walk by, so choosing a spot behind too many trees or tall buildings may not be ideal. Moreover, they need to be able to see your restaurant from the street as they drive.

A noticeable sign may help capture the attention of new customers. Here are some pointers to keep in mind:

Sign Placement and Design for Maximum Visibility:

  1. Height and Position: If surrounded by tall buildings or trees, consider placing the sign at a higher elevation, either as a flag sign projecting from the building or on a tall pole, ensuring it's visible from a distance.
  2. Lighting: Illuminate the sign, especially in the evenings. Neon lights, backlighting, or spotlights can make it pop, drawing attention even in a crowded setting.
  3. Clear Messaging: The sign should clearly display the restaurant's name and, if space allows, a brief tagline or specialty (e.g., "Best Wood-Fired Pizzas in Town").

Other Actions to Capture Attention:

  1. Live Demonstrations: If feasible, have live cooking demonstrations or a display of fresh ingredients, visible through the glass. For instance, a sushi place might have chefs rolling sushi where passersby can see.
  2. Music and Ambiance: Soft, inviting music playing outside or live performances on certain days can attract attention.
  3. Samples and Flyers: Occasionally offer free samples of signature dishes or drinks to passersby. On quiet days, stand infront of your restaurant and offer free samples, provide flyers or discount coupons to encourage passers-by to visit.

Cropped image of male restauranteur

6. Evaluate the Pros and Cons of Premium Location Costs


A premium location comes with a higher cost, but you may feel placing your restaurant in an area with heavy foot and car traffic is worth the investment. You might come across a location with lower rental costs in an area with lighter traffic, but your restaurant may not attract as much business in such a setting.

Of course, you also need to ensure your business is in a safe neighborhood and near your customer base. Take the time to determine your goals, budget, and customer base, and decide if you want a premium location by weighing the pros and cons around those factors.


7. Examine Space Turnover Patterns


It is important to analyze the space turnover before committing to an area for your establishment's location. One example is checking to see if other restaurants have opened and closed within several months. If this is the case, you should avoid this space because there is a reason behind a quick closure.

Websites like Yelp, Yellow Pages, or Manta provide information about local businesses, including user reviews and sometimes the year the business was established. The Local Chamber of Commerce often has records or at least anecdotal knowledge of businesses in the area, including how long they've been operating.

Absolutely. Individual data points can often be misleading, and it's crucial to understand the broader context. Here's a more refined perspective:

Analyzing space turnover patterns is essential, but it's equally important to approach this data critically and holistically. One or two isolated incidents of businesses closing shortly after opening do not necessarily condemn a location.

Many factors, such as management issues, financial challenges, or even a lack of market research, could lead to a business's premature closure. It's only when there's a consistent pattern of multiple businesses failing in rapid succession at the same location that one should become cautious.

This repetitive trend might suggest inherent issues with the location, be it poor visibility, inadequate access, or other external factors that deter consistent patronage. So, while turnover data is valuable, it's vital to interpret it in context and not make decisions based on isolated incidents.


8. Minimize Competition


The competition surrounding your restaurant can make a big impact on your establishment's success. There is nothing wrong with healthy competition, but direct competition with popular chains is a bad idea unless you are sure you can perform well against them.

Unless you can offer something that is certain to make customers choose your restaurant over these chains, your business may fail before it gets off the ground.

You can choose a location near other local establishments, but you need to work hard to ensure your menu stands out and appeals to customers. That said, you can also benefit from the same foot traffic of your target customers if they also frequent your competitors. For example, if you set up your pizza takeaway in the same area as a burger bar, taco counter or other kebab hut, you'll get the attention of the same customers who would visit your competitors.


9. Look Out for Complementary Businesses Nearby


Opening your restaurant near complementary businesses is a win-win situation because everyone has the opportunity to increase their customer base, especially when you can reach your target customers.

If your restaurant focuses on a healthy menu such as smoothies and salads, consider placing it next to a yoga studio for hungry customers who do not want to ruin their diet. A pizza shop can be placed next to an arcade or video game store, while a coffee, donut, or sandwich shop is ideal for office buildings because they appeal to busy workers.

If you are planning to launch a food truck, consider a spot near a local park to attract hungry visitors.


10. Explore Collective Venue Options


The concept of exploring collective venue options when selecting a location for a new restaurant revolves around leveraging shared spaces and resources to maximize visibility, reduce costs, and potentially increase revenue. Here's a breakdown of its relevance:

  1. Budget-Friendly: Renting or buying space for a standalone restaurant can be expensive. Collective venues like food courts or food truck parks typically offer more affordable rental rates, making it easier for new restaurateurs to enter the market without a significant initial investment.

  2. Built-in Foot Traffic: Collective venues often attract a diverse group of customers. For instance, in a mall food court, shoppers looking for a meal or snack are already present. This built-in audience eliminates the need for extensive marketing to draw initial customers.

  3. Increased Visibility: Being part of a larger venue means benefiting from its marketing and promotions. Plus, the close proximity to other vendors can lead to spontaneous visits from customers who initially came for another vendor but decided to try something different.

  4. Collaboration Opportunities: Being in a shared space provides opportunities to collaborate with neighboring vendors. For example, a dessert stall can collaborate with a nearby coffee shop for combo deals.

Outdoor restaurant

Location Selection: Quick-Service vs. Full-Service Restaurants

Part of choosing a location is factoring in whether your planned establishment is a quick-service or a full-service one. The unique requirements of each style can impact the selection process.


How to choose a QSR location


Convenience is a priority for customers who visit a quick-service restaurant. You can appeal to a variety of customers looking for a quick meal by choosing a location in or near shopping centers, business districts, and transportation facilities.

Your restaurant may not require a large number of parking spaces if diners don't linger. However, adding a drive-through might add extra appeal for customers who are in a hurry.


How to choose an FSR location


A full-service restaurant entails a broader range of factors to consider. Customers are looking for a captivating atmosphere, adequate parking, and a close distance to home. Furthermore, you should have an ideal customer in mind.

For example, your customer base might be busy professionals, young adults, or families with young children. Finally, you need to research the competition in the area, especially if there are more established chains nearby.

Three Insider Tips and Tricks for Restaurant Location Scouting

A strategic approach is necessary for finding the perfect spot for your new establishment. Successful scouting will help you navigate the complexities of finding the right location.


1. Allocate Adequate Space for Delivery and Pickup


As online ordering and food delivery services continue to grow in popularity, accommodating these services is crucial for your restaurant's success. Therefore, you need to ensure your location offers enough space for delivery drivers to park and pick up orders.

You also need a designated area for customers to pick up their takeout orders without disrupting dine-in guests. Leaving enough room for online ordering and food delivery services provides a convenient experience for all customers.


2. Engage a Building Inspector's Expertise


Hiring a building inspector should be a top priority when selecting a location. You never want to open a restaurant on a property that does not meet local safety and health regulations. A building instructor has the knowledge and experience necessary for identifying code violations, structural issues, and safety hazards.

They can also give you advice on bringing the property up to code or suggest looking for a location elsewhere. Failure to have the property inspected before opening your restaurant can result in fines and temporary or permanent closure.


3. Unveil Insights into Space Turnover


As mentioned earlier, you need to research the space turnover for the property you have in mind. A spot with businesses that open and close in just a few months is a sign to look for another location.

Conversely, an area full of established, long-term businesses should go on your list of potential locations. Even if the area sounds like a good fit, you need to ensure your restaurant has the opportunity for long-term success.

Restaurant laws

Case Study: Restaurant Location Selection

When choosing a location for your restaurant, it helps to research successful businesses to determine how they found the right spot for their establishment.

Huddle House is a great example of a restaurant franchise that has taken the time to select a location. By viewing even a portion of their formula, you can determine the best steps to take when scouting your restaurant's location:


  1. A minimum population of about 12,000 and within five miles of rural areas.

  1. If possible, interstate locations with a minimum traffic count of 24,000 and a population of 7,000 to 10,000 within three miles.

  1. Retail stores within one mile of the location.

  1. 25,000-square-foot lot size at minimum or an adjoining lot with shared parking, as well as 36 parking stalls at minimum.

  1. Accessibility inside and out is a top priority.

  1. Takes less than 30 minutes to travel to the restaurant.
Huddle House

Takeaways

  1. Learn the zoning laws to ensure your restaurant meets the safety rules and regulations.

  1. Research the demographics and learn your target customers' preferences.

  1. Evaluate foot and car traffic in potential locations.

  1. Prioritize visibility to attract customers on foot and in cars.

  1. Consider accessibility for both customers and deliveries.

  1. Weigh the pros and cons of a premium location.

  1. Research space turnover to determine stability and success.

  1. Assess the competition and avoid a location next to bigger chains of the same niche.

  1. Look for complementary nearby businesses to increase your customer base.

  1. Consider placing your restaurant in a collective venue for shared resources.

By following these proven practices, you can make informed decisions when choosing the perfect restaurant location. Remember, finding the ideal spot sets the stage for your restaurant's success. Stay confident and enthusiastic as you embark on this exciting journey toward culinary achievement, and you can reach your business goals before you know it.

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