When planning to open a restaurant, one of the first things that comes to mind is location. What city or town will your restaurant be located in? Do you want to open a restaurant downtown or on a main road? Will people get there by foot or by car? How big of a building do you need? We know that location, location, location can be a big indicator of success, but you may not need to be on the busiest street in town to ensure that your restaurant thrives. Rather, many other aspects of your restaurant’s location will determine your success.
Demographics and Competition in the Area
Demographics and competition are important aspects to consider when choosing a restaurant location. Are there enough people in the surrounding area to support your business? What is the average income and age range of the community? Is the area primarily residential or commercial? These factors can have a significant impact on the success of your restaurant. Plus, you want to evaluate other restaurants in the area. Are there already many restaurants serving similar cuisine or offering a similar concept? Is the market oversaturated or is there room for your business to stand out? Assessing the competition in the area can help you determine if your restaurant can differentiate itself and succeed.
Lease and Mortgage Factors
The terms of your lease or mortgage are also major indicators of success. If you are looking to rent a space, the relationship with the landlord and the structure of your lease are key elements to consider in your choice. Negotiating costs and the length of the lease should not be overlooked. If you are looking to buy a space, you need to consider interest rates and even closer attention to projected growth in the community to assess what kind of equity you can build.
There are many structural elements to pay attention to in a piece of restaurant real estate property. It is important to consider the overall condition of the building you are looking to rent or own and its commercial kitchen equipment. Does the building require extensive renovations or repairs? Is the equipment up-to-date and in good condition? These factors can impact your start-up costs and ongoing expenses.
It is also important to consider the zoning laws and regulations in the area. These laws can impact what type of restaurant you can open, how many seats you can have, and what type of alcohol you can serve. Knowing the zoning laws and regulations can help you avoid potential legal issues and ensure that your restaurant is in compliance with local laws.
Overall, evaluating restaurant real estate requires careful consideration of many factors, including location, lease negotiation, demographics, competition, zoning laws, and building condition. We can guide you through the due diligence in assessing a potential location’s viability, price, and compatibility with your concept to ensure that you choose the best location for your restaurant and set your business up for success.