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From foot traffic to parking, restaurant location influences many factors that contribute to profitability.

8 Factors for Choosing a New Restaurant Location

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These elements are critical for a new restaurant's success.
By Tom Larkin September 2017 Expert Insights

Whether you’re opening your first full-service restaurant, your second, or your 50th, it’s important to understand what to look out for when choosing a new restaurant location. For seasoned restaurateurs, you may have a successful location where you are but how much of that success is inadvertently down to accidental—or purposeful—restaurant location choice? The answer may be it has everything to do with it. Here are tips on choosing just the right spot:

1. Visibility

You may have found the cutest, quaintest location for a restaurant in a historic downtown somewhere, but if you’re tucked in a side street with little foot traffic, unless you have amazing marketing tactics, you may have the most Instagram- and Pinterest-worthy space with zero customers.

When choosing a space you want somewhere that’s visible. To determine visibility, look at foot and car traffic patterns. If people are walking by, who’s walking by? Is it nannies with strollers? If your restaurant is not kid friendly, they aren’t going to go inside. Are doctors and nurses passing by from a nearby hospital to grab a quick bite on their lunch breaks? What about local hipsters who want a trendy long lunch? Determine if nearby pedestrians are your target customers. If not, the space probably won’t work for you.

Check different dayparts, too. Do these diners want a full-service restaurant for breakfast or lunch, or will you adapt for those times, offering faster service or a sandwich counter, or do you just want to open for fine dining in the evening? Will that daypart bring enough traffic?

For car traffic, can people pass your restaurant, and by the time they’ve seen it, make a last minute choice to pull in and check it out? So many people drive by new places and think, oh, I must try that new restaurant, but customers need to be able to go there before you go out of business. How many restaurants have you been meaning to try only to see a “for rent” sign in the window six months later?

2. Parking

As much as no parking, parallel parking, and off site parking may work for the street cafés of Europe and the country pubs in the UK, it doesn’t work for American restaurants, with the exception of big cities. Whether you’re opening fine dining or a popular chain, make sure the land you rent or buy is big enough to accommodate parking for your hungry clientele.

3. Space Size

The space you rent or buy needs to fit your size requirements. For every restaurant seat, you need about five square feet of kitchen space, so if you have eighty seats in your restaurant, your kitchen needs to have 400 square feet of space minimum. Larger spaces reduce workplace accidents by minimizing slips, trips, and falls, the most common workplace accident according to OSHA. You’ll want to consider how big of a space you need for your restaurant requirements.

4. Crime Rates

Crime rates are unglamorous considerations, but if you place your restaurant in a crime-laden area, are your target customers going to visit? High crime rates can make potential customers uncomfortable, and if they feel they’ll be mugged walking to their cars, it will only drive away business, no matter how legendary your coq au vin.

5. Surrounding Businesses and Competitor Analysis

You’ll want to do your research surrounding businesses. Are they doing well? Is the area affluent? Is there enough room for your business? Also, you’ll want to know what types of restaurants do well in the area; however, you don’t want to open a pizzeria if there are four in the area. Areas can only support so many of the same type of restaurant. What will distinguish any new restaurant is excellent service and consistently wonderful food.

You’ll also want to know what the building was used for before you inhabit it. If the building wasn’t a restaurant, will the conversion costs affect your bottom line? If it was a restaurant, was it there for twenty years with great success and the owners wanted simply to retire, or did it change hands five times? Find out why past restaurants were successful or not and if location played a role in these factors. Find out how location works for surrounding businesses, and will you be catering to the right crowd? For example, if there is a nightclub nearby, that will work if you’re catering to the after-hours crowd when they’ve concluded a night of drinking.

6. Accessibility

Some restaurants find success in just-off-the-highway locations, or located near exits for those interstate travellers who need a bite to eat but don’t want the usual fast-food restaurant. You’d have to keep peak times in mind for these kinds of locations, as well as customer demographic. Depending on your exact exit location, you may be limiting other types of traffic to your restaurant.

7. Affordability

Cost is always a bottom-line consideration for any business. If the rent or purchase of the space is more than you’ll bring in each month in profits, that location is not feasible at that time. However, if you know that you’ll generate business from that location, then you might consider it, but you’ll need to be able to afford the upfront costs before you turn profits. Although some risks do pay off, you don’t want to be at the point where you’re struggling to cover basic costs. A killer location won’t make up for driving your restaurant out of business.

8. Safety

Once you’ve landed your perfect space, keep in mind that OSHA reports that slips, trips, and falls are the most common workplace accident, accounting for 15 percent of all accidental deaths, and they are more prevalent in the restaurant industry. It’s important to install slip-resistant flooring, have slip-resistant mats in the kitchen spaces, and provide your workers with highly-rated safe, slip-resistant footwear to help prevent those preventable slips and trips. Slips and trips could cost your company more in fines than renting a space, so make sure you consider all angles of safety when choosing the best space. If your space has its own equipment, make sure that all fryers are safe, ice machines aren’t leaking, and there aren’t any trip hazards in the kitchen.

When choosing the perfect location for your new place, make sure you’re making the decision with your eyes wide open, informed with the knowledge of how location can affect your costs and profits. 

Tom Larkin is marketing controller with Shoes For Crews Limited. Previously Tom held senior marketing roles on the client and agency side for companies in both London and Dublin. Shoes For Crews is one of the world's leading manufacturers of slip-resistant and safety footwear. It is an industry leader in safety for over three decades and to date have kept over 100,000 workplaces safe worldwide.