Strategic Location Selection for Small Restaurant Chains

Choosing the right location for a new restaurant can make or break a small food-service business. Here's how small restaurant chains can determine where to open their new restaurants, considering a range of factors from anticipated sales volume to current and future development plans.

Key Factors in Location Selection

Depending on the amount of capital you have and the type of food-service operation you choose, starting a new restaurant can cost anywhere from $70,000 to $1.5 million. Not every food-service business needs to operate from a retail location, but for those that do, the chosen location can significantly impact your success. Factors to consider include:

Anticipated Sales Volume

How will the location contribute to your sales volume? It's crucial to forecast the number of customers you can attract based on the location. For example, if you're located in a pedestrian-heavy area, the chances of generating strong sales increase.

Accessibility to Potential Customers

How easy is it for customers to get to your business? Consider the surrounding retail traffic. If you rely on walk-in customers, analyze pedestrian flow and the presence of nearby businesses that might drive foot traffic to your location.

Rent-Paying Capacity of Your Business

Based on your sales and profit projections, you can decide how much rent you can afford to pay. Historic and projected foot traffic data will be key in making this determination.

Restrictive Ordinances

Look out for unique restrictions like loading and unloading hours, which could limit the viability of a chosen location. Ensure that the location aligns with your business needs.

Traffic Density

Understanding the average number of pedestrians during business hours is important. Analyze the percentage of these pedestrians who are likely to patronize your business. A detailed traffic study can help quantify this potential.

Customer Parking Facilities

Adequate parking is essential. Not only does it need to be available, but it must also be accessible to your customers. Consider the long-term impacts of parking demand on traffic flow and general convenience.

Proximity to Other Businesses

The presence of neighboring businesses can significantly influence your store's volume. Some businesses can complement yours, while others might present competition. Analyze the potential positive and negative impacts of nearby establishments.

History of the Site

Review the recent history of the site. Understand why previous tenants left. This information can paint a clearer picture of the site's future potential.

Terms of the Lease

Understand all the details of the lease, such as lease duration, renewal options, parking adherences, and miscellaneous fees. This will ensure the overall financial feasibility of the location.

Future Development

Check with the local planning board for any future development plans. Planned construction or new developments can impact your business, so it's important to account for these in your strategic planning.

Layout and Design Elements for Your Restaurant

The layout and design of your restaurant are crucial for its success. Key areas to consider include the dining room, kitchen layout, and production area:

Dining Area

The dining area is where you'll make the bulk of your income. Design it thoughtfully to maximize the customer experience. Study other local restaurants and observe how customers interact with the decor. A well-designed dining room can enhance customer satisfaction and attract repeat business.

Customer Caliber

Studies suggest that approximately 40-50 percent of sit-down customers arrive in pairs, 30 percent come alone, and 20 percent come in groups of four or more. Use this information to your advantage by designing tables that can easily accommodate different party sizes. Utilize booths to provide more seating options.

Production Area

The production area should be efficiently designed to ensure smooth operation and excellent service. Consider the entire office and kitchen space, including the dining area, kitchen and prep space, storage, and office areas. Typically, restaurants allocate 45-65 percent of their space to the dining area, 35 percent to the kitchen and prep area, and the remainder to storage and office space.

Efficient Layout

Your production area should be well-organized to facilitate efficient workflows. Ensure that all necessary elements, such as receiving, storage, food preparation, and dishwashing, are within easy reach of the cooks. Optimize the layout for peak productivity, allowing multiple cooks to work side by side during busy times.