The Importance of Restaurant Location: A List of Location Selection Criteria for a Restaurant

Once you have decided to start a restaurant business, you will have to choose a location where your new business can flourish. Location is of great importance to the viability of a catering business. While you know you need a good location for a restaurant with lots of space, there are many other things to consider. The following is a list of selection criteria that can be used to evaluate how good a specific location is.

Local zoning regulations

One of the first things to check when selecting a location for a restaurant is exactly what uses the building is allowed to be used for under the local zoning scheme.

A compromise between restaurant location and rent

It is obvious that a restaurant should try to be in a prime location that has good exposure and good traffic flows nearby. However, these types of locations come at a price and that is the high rent you will have to pay. A good alternative might be to have a less prominent location, such as in a side lane or on the second or third floor of a building. Then you can save a fortune on rent and negotiate more favorable lease terms with the building owner. However, you have to make up for a poor location with a top-notch marketing plan, as well as food and services that encourage customers to return.

Trade size

You should have a pretty good idea of ​​the size of the restaurant operation you want to establish. One of the basic requirements with a location will be that it be large enough so that you can set up a restaurant of the size and concept you want. Health and safety laws will dictate how many people can occupy the building, so you should be aware of these requirements before you start looking for locations. You may end up deciding that the property you thought was perfect is too small for the clientele you need to attract.


You will notice that restaurants are usually located in areas with good accessibility and are close to business districts and residential areas. Being accessible will ensure that you can attract the volume of people you need to keep your business going. Stand outside the building you are considering using to open your restaurant. Count vehicle and pedestrian traffic flows and compare them to other places you are considering.

The exception to the rule here is if you have a “secluded” location, like a beach or vineyard, for example. Sometimes the unusual location of a restaurant can become a selling point. Keep in mind that, in the right circumstances, people value features like beach views or mountainous scenery over convenience and accessibility.

Lease or purchase

You must decide whether renting or buying a venue for your restaurant would be the best option. Both options have their advantages and disadvantages. Most restaurant entrepreneurs start with leasing and preserve their capital for start-up costs and business growth rather than investing in properties at the same time.

Have some preliminary discussions with the building owners and try to get an idea of ​​how flexible they will be in the terms of a lease. Agreeing on a lease can be a lengthy process, so it helps if you can deal with building owners that you can communicate well with. It should be open to some negotiations and discussions.

Demographics and Market Research Area

Think about what type of neighborhood your proposed restaurant space is in. Next, think about the type of restaurant that would be suitable for the surrounding residents. Take some time to study the demographics of the area to try to find out the age, ethnicity, and socioeconomic status of the local population.

The local economy and location selection

People will only eat at restaurants if they have jobs and discretionary income to spend. Think about local economic conditions before setting up your restaurant. How is business sentiment in the local area?

The local economy will also affect your choice of concept. Fast food generally remains popular in a poor economy, but higher priced menu offerings probably won’t do well in a city where there have been factory closures.

Competition and other businesses

Before deciding on the location of a restaurant, one of the criteria that you should take into account are the other businesses in the area. A lot of competition is not necessarily a bad thing, as it means that the market is healthy and can support many restaurants. However, you obviously want to minimize the competition you will have near your restaurant as much as you can. At least make sure you choose a restaurant concept that is unique to the area so that you have few direct competitors.

Second, you need to find out if there are other nearby businesses that might be complementary to a restaurant. For example, if there is a movie theater across the street from your restaurant, you might see good business from moviegoers when they come in for dinner before watching a movie.

Parking lot

You should have a pretty good idea of ​​how customers would get to a restaurant at your proposed location. A large restaurant will ideally have its own parking lot. Depending on your concept, nearby public parking may also be acceptable. However, keep in mind that many people will simply drive to another restaurant if they have nowhere to park their car. Be aware that in some cities, proximity to public transportation may be more important than parking.

Exterior and surroundings

Take a good look at the sidewalks and other buildings around the place you have in mind. Sometimes they can affect the impression of your business by potential customers. You will have little control over your neighbors, so you will want to choose a restaurant with a clean, orderly, and well-maintained environment.

Renovation costs

Different locations will have different costs associated with converting an available space into a restaurant. A major factor that will affect the scale of the renovations will be the previous use of the buildings. If the previous owner also had a restaurant on site, the remodel requirements should be minimal.

You should keep remodeling costs to a minimum if you rent space for your restaurant. You might consider spending more if you can negotiate with the building owner and have them contribute to these costs. The length of your lease will also be a factor in determining how much to spend.

Take in a building inspector or some contractors who have had experience remodeling buildings for restaurant owners and ask them for their ideas on renovation costs.

When you decide to open a restaurant, keep in mind that location is one of the most important factors that will determine its success. Keep the above criteria in mind as you go through the selection process. The building you choose should not only be in a prominent location, but it should also be practical and functional to allow your restaurant to run smoothly.

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