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

Once you’ve decided to start a restaurant business, you’ll need to choose a location where your new venture can thrive. The location is of great importance for the viability of a restaurant business. While you know you need a good restaurant location with plenty of space, there are many other things to consider. Below is a list of selection criteria that can be used to assess the quality of a specific location.

Local Zoning Regulations

One of the first things to check when selecting a location for a restaurant is exactly what uses you are allowed to use the building for based on your local zoning scheme.

A tradeoff 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 may 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 need to make up for a poor location with a top-notch marketing plan, as well as food and service that encourages 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 to set up a restaurant of the desired size and concept. 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’ll notice that restaurants are often 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 maintain your business. Stand outside the building you are considering using to open your restaurant. Count the foot and vehicle traffic flows and compare them to other places you are considering.

The exception to the rule here is if you have an ‘out of the way’ location, like a beach or vineyard for example. Sometimes the unusual location of a restaurant can become a selling point. Keep in mind that under the right circumstances, people value features like a beach view or mountain scenery over convenience and accessibility.

Lease or Buy

You need to decide whether to rent or buy premises for your restaurant would be the best option. Both options have their advantages and disadvantages. Most restaurant entrepreneurs start out by renting and preserving their capital for startup costs and business growth rather than investing in property at the same time.

Have some preliminary discussions with the building owners and try to get an idea of ​​how flexible they will be on the terms of the lease. Coming to an agreement on a lease can be a lengthy process, so it helps if you can deal with building owners that you can communicate with well. He must be open to some negotiation and discussion.

Demography and Market Research Area

Think about what kind of neighborhood your proposed restaurant space is located in. Then 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 site selection

People will only eat at restaurants if they have a job and discretionary income to spend. Give some thought to local economic conditions before setting up your restaurant. How is the 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 consider is 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’ll have near your restaurant as much as you can. At least make sure you choose a unique restaurant concept in the area so that you have few direct competitors.

Second, you need to find out if there are other businesses nearby that might be complementary to a restaurant. For example, if there’s a movie theater across the street from your restaurant, you might see a good deal from moviegoers when they come in for dinner before 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. Keep in mind that in some cities, proximity to public transportation may be more important than parking.

Exterior and Environment

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

renewal costs

Different locations will have different costs associated with converting an available space into a restaurant. An important 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 the site, the remodeling requirements should be minimal.

You should keep remodeling costs to a minimum if you are renting 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 a building inspector or a few contractors with you who have had experience remodeling buildings for restaurant owners and ask them for their ideas on renovation costs.

When you decide to start a restaurant, keep in mind that location is one of the most important factors that will determine your 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 also practical and functional to allow your restaurant to run smoothly.

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