How to Choose the Best Restaurant Location for Your Business

Cody Cromwell
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Restaurant Location: The Restaurant Concept Formula

The restaurant concept formula is the easiest way to determine the perfect location for your restaurant. It’s a step-by-step guide to helping you determine the ideal location for your restaurant.

In this blog, we’ll show you how to identify the correct type of restaurant for your food, as well as how to choose the perfect location, access to water, cuisine concept, and more. We’ll also share our take on locating a restaurant in a shopping center, a restaurant within a hotel, and the best practices for running a successful restaurant.

We’Ve Covered All the Reasons why You Need to Choose a Restaurant Location That

Shapes the experience for your visitors helps you sell lots of food .

Makes it easy to register guests

Reduce Tax burden by avoiding to pay high tax on your earnings.

Identifying Your Ideal Customers

Describe Your Customers

This is the best way of determining the right location for your business. If you have the budget, you can conduct regular customer surveys to learn what appeals to your regulars.

The phrase, “get out your crystal ball or jungle gypsy”…may sound like a line from a fantasy book, but it’s not. There a bunch of different methods you can utilize for customer

Analysis. Here are some examples.

How to find out how important location is to customers? Just ask them and observe their answers.

You can use this method to learn what time of the day is mostly preferred by customers.

An ideal location will also give the best views of your products or services.

As a business owner, you just can’t afford losing a customer by just choosing the wrong location. Hence, you need to be assisted by experts that can give you informed advice on the right restaurant location.

Following are some expert tips to help you find the right restaurant location for your business:

Check for competitive advantage

This is the best way of helping your business compete and make it grow. In case, you do not have any of them, you should refrain from investing in any of them.

Inspect the location

Ensure that the facility is well lighted and well ventilated.

Understand Their Habits

Before you install your restaurant, you have to understand what type of location, customer base and customer tastes are going to influence the design and layout of your business. You will want to get a better idea of the clientele expected to frequent your restaurant. Your customers may range from locals to tourists, depending on your location. If your customers are primarily tourists, you will want to incorporate a foreign flare and menu into your design to attract them.

Local business will not need a foreign flare, just local and regional cuisine that they cannot find anywhere else. You will want to design your restaurant so that it can appeal to its locals and its tourists. For instance, if you plan on having a bar, make sure to allow enough space for it, and put it in a location where it can get maximum foot traffic which should be where your kitchen is located along with a shorter walk to your seating area.

Know Your Competition

You will want to do your research before starting your restaurant and see what the competition has to say. Discuss what their strengths and weaknesses are. If you were to look at two potential restaurant locations, you would want to compare the general sight lines at your visitors’ point of view, the size of your dining area, how far you are from public transportation, an elevator and exit, as well as the size of your break area and how far it is from your kitchen.

Where Are They Located?

You’ve leased the space and now you’re ready to open for business. With the exception of convenience stores, you’d like to open your business in a location that’s easy to find, is close to your clients and delivers high foot traffic.

And then there’s the question of location – the most important question there is. Where are you going to put your restaurant? It’s the first thing you’ll consider when choosing the location for your business.

Are There Enough of Them?

That question really depends on the type of business you own. Think of others like you, consider the demographics of the population, and find out if there are enough of them.

If there aren’t enough people in your area, check out the statistics to find out how many there are and where they are. If there are more people than you would think there would be, go for it.

See if there’s anything wrong with the location or with the way you run it. You’ll want to make your business a success, but you also have to try to make it a viable business.

To check out the clientele you’re going to be getting, consider trying out a lunch and dinner crowd. Ask anyone who works within the area (or around the area) if they come to the restaurant at different times of the day.

You can also check out the competition’s lunch times and lunch crowd. You don’t want to be the place where everyone goes. Make yourself stand out by being the best and making the most money.

Customer Activity: Foot & Vehicle Traffic

Foot traffic…one of the easiest traffic to predict. How many people pass by your storefront is much easier to determine and monitor than activity inside your building. If your goal is to bring in foot traffic to your store, it’s important you scout out the neighborhood by walking through it yourself.

Vehicle traffic…another easy one to analyze. These are the people most likely to stop by your business. Fortunately, you can keep tabs on their movements as well. Specifically, you can learn their routes and which direction they are coming from.

By using a resource like Google Maps, place a visible marker on your property that clearly indicates where you are. For example, if your business is located on the intersection of a major road, put your marker in the center of the intersection. The marker should be above ground level and impossible to miss as it will be seen from the road.

To monitor traffic, you’ll need to set up a camera outside of your gate or marquee. If it’s outside your establishment, make sure the camera is facing the area where people would naturally congregate. For example, if you have a restaurant, make sure the camera is pointing out the window toward the sidewalks and side streets.

Competitor Analysis

Identify your restaurant’s competition, especially within a neighboring area. Determine where they are located and then talk to various people who live and work in that neighborhood to find out what the overall impression of the competition is. Are people welcoming to customers? Do they have an outdoor dining area? Are they able to meet their food and beverage needs?

Also, search the Internet and look for reviews from people who have actually visited your competition to get an idea of their service and food quality. Take the negative and positive reviews to find out if there is something you can do to improve.

Your competition’s Facebook and Yelp profiles should also be studied so you can get an idea of what customers think of them and whether they get positive or negative reactions.

Keep in mind that no matter what you do to attract a new customer to your business, it’s crucial to treat them right from the moment they walk in the door, whether they are a current or new customer. Once you start that relationship, there is a good chance they will tell their friends.

They have to walk through and be welcomed the moment they walk in. The staff has to look like they belong there and are professional. If the personnel on duty aren’t organized, clean, and presentable, it’s going to reflect badly on you.

Additional Information To Consider

Ok, if you’re not already considering restaurant location, you might be surprised to learn how much thought goes into location selection. This post will focus on the location of your new restaurant.

Choosing the best restaurant location for your business means you’re making a critical first step in the marketing process. Depending on the restaurant type, you need to know the location’s proximity to residential and commercial zones, traffic patterns, and more.

Strategic decision making will need to occur in advance. Here are a few additional things to consider.

Property Type

Your new restaurant will be located in a property owned by a professional property management company. These properties are of high quality and have already received the services of a professional management company. You get the benefits of an existing tenant base, occupied store space and a fully completed building.

Properties are generally leased for anywhere between 20 and 40 years, depending on the nature of the business. Properties are leased before you start your business so all the construction work required before you move in can be carried out. Once you move in, your territory can be extended as you wish.

The building that you move into is already fitted out and ready to go so there’s no need to spend time and money putting up shutters and signage.

This is a franchise type business with all knowledge and expertise being provided by the corporation. This is important so you can focus on business growth rather than the daily running of the business. The property management company is willing to invest in your organisation in an attempt to assist you in your business growth. They will devise a strategy for your business making full use of the premises.

The corporation take all the risk and uncertainties out of the equation as they have completed numerous successful turn arounds in the past. They have a proven track record and are currently looking for new owners to join their roster of successful outlets.

The entire process of renting a new location and how the corporation works regarding rentals and franchisees is unique.

Lease Terms

Keep in mind that when you lease a location, you’re essentially paying rent to a landlord for use of the space. Before signing on the dotted line, make sure you’re aware of how the lease terms apply to you and your business. For example, do you have to be open on holidays? Will the landlord provide utilities or is that part of the rent? What’s the security deposit? Are there any additional fees for late payment? Here are some other considerations to keep in mind while leasing a space for your business:

Consider your ideal location

Most restaurants operate within their ideal neighborhood, and since you’re risking a portion of your business on your restaurant location, it’s important to choose a neighborhood that you’re comfortable with.

You should also consider the surrounding area. For instance, do you need a large parking lot to accommodate your patrons? This is a common concern for a lot of businesses.

Another thing to consider is the physical size of the restaurant. Typically, any restaurant greater than 500-sqft will need to upsize.

Accessibility and Parking

Choose an accessible venue if you want your business to be accessible to the disabled.

Accessible venues typically have wheelchair accessibility and sufficient toilets. It’s important to talk to the venue owner before signing a contract so you can figure out what you will need.

Even if you’re unsure about your business output, a venue with a minimum of two toilets is a good start.

Parking can be a challenge and is crucial for the success of your business.

How many spaces are there? What’s the maximum time limit? How many street car spaces do you need?

The answers to these questions will help you work out where to locate your business and what your parking requirements are.

Once you’ve found the right place for your business, the next step is to figure out how to fit all the essentials into the space. Here are some ideas to help you make your business like a home:

  • Provide a reception area
  • Have treatment rooms
  • Offer beauty treatments
  • Nurture your customers
  • Have relaxation rooms

Floor Space

The first thing to consider when choosing a restaurant location is the space available. This is especially true if you are opening a restaurant in an area that’s already crowded. If you lack a restaurant location, your restaurant will be competing against other restaurants, which means the restaurant location that you choose will have a substantial impact on your overall business, making it vital that you choose the best restaurant location and that it’s ideal for your restaurant.

So how do you choose the best restaurant location for your restaurant? Well, first, you must evaluate the space you have available. For example, is there enough space for the kitchen? Is there enough space for customers and employees? Is there enough space to hold necessary equipment? If you don’t have all of the space you need, you’ll have to decide whether you can work with what you have available, look elsewhere, or keep looking for a better location.

This is especially true if you are planning to expand your restaurant in the near future. If you do expand before you have the space you need, you’ll be putting yourself at a disadvantage. You’ll have to rely more on your chef’s ability to prepare meals quickly, resulting in unsatisfied customers and less revenue.


Drawing a restaurant customer to come to your location is only the tip of the iceberg; your business can actually thrive on the amount of foot traffic it generates.

A restaurant can have the best food and a great staff, but if it is not located in the right place, it will fail to earn a profit in the long run. Understanding this fact, many of the popular restaurants in the city are actually located in the business districts of major urban areas.

Some of the key factors that contribute toward this type of neighborhood are high population density, dense residential and business areas and high visibility. A good restaurant located in such a neighborhood, will have an identity and character all its own since its business tries to accommodate various demographic groupings.

As a restaurant owner, you ought to make sure that your business is located in a place where it will be able to stand out and be noticed. Neighborhood and location also greatly affect businesses that have high visibility like a hardware store or a salon.

Therefore, choosing a restaurant location is much more about finding the perfect area than trying to find the best restaurant to fit your budget. If you are unsure as to where to start, you can use the two-step approach described below.

The Bottom Line

Whom you choose to partner with, your business partner will be the one that will decide the fate of your business. Your business partner’s decision on where to locate your business can range from where is the best place to buy a car to where is the best place to set up a restaurant.

The following guide on restaurants is designed to help you decide where to locate your business based on the specific area’s population density, culture and demographics, trade area, competition, demographics, transportation, and proximity.

Once you’ve completed your analysis of the following factors, you will be able to determine where you’ll gain the most potential customers.

The population density is a factor to consider when choosing a location for your business, such as a restaurant. Residential neighborhoods can be a good place to start, but if you’re looking to open a high volume restaurant with takeout or delivery services, a commercial district would be a better fit.

The commercial district you pick must be accessible to the community’s residents, entrepreneurs, and service professionals…traffic volume and volume of customers will determine if that location is a good fit for your business.