A good restaurant location is harder to find than you might think. What looks like the perfect spot on first glance may turn out to be a costly mistake if you haven’t put in the groundwork. Obviously, the menu and service are vital to the success of a restaurant, but the location can be just as crucial, especially in the early years.
It’s important to understand the different factors that will influence and contribute to the location of your new restaurant franchise before you make any commitment, from attracting enough initial customer interest to being convenient to visit and affordability, to name a few. Unfortunately, many restaurants fail within three years and a reason for this is due to a lack of planning. So, it is vital that franchise partners do their due diligence and avoid making any impulsive decisions they then may later regret.
Visibility is key
Visibility is critical for new restaurants, so setting up shop in a location with either high footfall or passing traffic is perfect. Badly placed signs or neighbouring buildings that limit visibility will make it harder for restaurants to gain an initial profile. Making your restaurant visible to the public is like free advertising – a reminder that they should stop by.
Target market
In the first instance, it is important to understand who your target market is to enable you to find the right location for your restaurant. Once you have established who they are, then you can analyse the demographics of your chosen location, including gender, ethnicity, age, religion, income amongst many others. Not everyone likes the same foods or restaurant concepts, so by undertaking an analysis, you will determine what appeals to your target demographic.
We know that we can’t change the habits of a demographic of the population, but we can find the right people for our concept and cuisine. Having analysed our target market we know that 50% of our customers are in their 20s and 30s, living city centres, either studying or in the early stages of their career. By recognising our target market, we can see how demographics can impact our restaurant growth, helping us identify the right sites for our restaurants.
Affordability
Cost is always a bottom-line consideration for any business and can affect your choice of location. Ensure you stay within budget. A simple scrutiny would be that the rent or purchase of the space (and therefore mortgage payments) would not obliterate your predicted monthly profits. It’s also important to note the length of the lease. You want to guard against dramatic increases in rent when it comes to contract renewals.
Size matters
The size of your restaurant affects the size of your kitchen and dining area, the amount you pay for the lease and utility expenses, amongst other costs. The concept, store design and location will obviously determine what your requirements are, whether it be drive-thru, full-service restaurant or concession at a transport hub.
Being a fast-casual restaurant franchise, it’s critical for us that we source our sites in mainstream locations, such as new-build major shopping centres where we know there is a captive audience to whom we can provide a whole dining experience. Our property director, who is well connected in the property industry, helps our franchise partners to source and negotiate locations across the UK. His advice and support throughout the complex process also includes areas such as insurance and fire suppression requirements.
Know your neighbours
When looking for a restaurant location, consider who else is doing business in the neighbourhood and see whether there are already half a dozen restaurants with the same concept as yours; will you struggle to convert customers who are loyal to existing outlets? Successful businesses attract other successful businesses, so just check to see that the area is busy and not full of empty storefronts. Executing a solid business launch and delivering consistently great quality food paired with excellent service will certainly differentiate your new restaurant.
Location is as crucial to success as your food and service, so make sure you do your due diligence before committing to a restaurant franchise concept, writing your business plan or signing a lease. When choosing the perfect location for your new restaurant, franchise partners must make sure they’re making the decision with their eyes wide open. And last but not least, you need to get the local community on your side to support your business so make sure the location has the necessary population and demographic profile for success.
