12 Things to Consider When Identifying the Right Location for Your Restaurant Franchise

Alice Tuffery, writer

Published at 12/05/2019, Updated on 15/06/2023 , Reading time: 5 min

12 Things to Consider When Identifying the Right Location for Your Restaurant Franchise — Photo © find-restaurant-location.jpg

Location can make or break a business, especially in the retail and restaurant sectors. If your venture is to succeed, you’ll need to do research and make sure you’re setting up somewhere you’ll be able to attract enough customers to generate a healthy profit. Here’s how to find a fantastic location for your restaurant franchise unit.

It’s easy to imagine you’re giving yourself the best chance at success if you set up your restaurant franchise unit in a busy, city centre location. There will be lots of people passing by, you’ll have decent brand visibility and easy access to any supplies and resources you need. But sadly, choosing a restaurant location isn’t that simple, as you may end up spending more in rent than you generate through sales.

Before you sign a rental agreement, it’s vital you carry out extensive trade area analysis. What is this? It’s the research you do to work out how many potential customers an area has, where they come from and where you can find more. Armed with these findings, you’ll be able to make an informed decision when it comes to your restaurant location. You’ll also have the knowledge to plan your future business growth and targeted marketing, giving you the best shot at profitability.

Here are the 12 things you need to consider when you’re doing trade area analysis and finding a location for your restaurant franchise unit.

Where does your target market live and work?

A large proportion of consumers lead busy lives and are time-poor, so convenience is key when they decide where to eat. Your regular customers will probably be people who live or work nearby, so you can maximise your income by setting up near your target demographic.

What kind of restaurant are you launching?

Contrary to popular belief, not all food businesses need to be situated in a bustling city centre. If you’re setting up a fast food shop aimed at students and young professionals, a central location would work well.

But if you’re opening a fine dining restaurant popular among families and higher-income consumers, you can get away with being further afield. An out-of-town site with a car park and attractive outdoor area could be just as profitable. If you’re considering a high street or city location, think about who will be walking past and whether those demographics are likely to pop in.

Does the location have good transport links?

Always consider how your target market will reach your restaurant franchise unit. If you’re opening a city-centre, family-friendly diner, you may want to make sure you’re near a ‘park and ride’ bus route, so people can easily travel in from suburban areas. If you’re setting up in a less busy spot, you may want to make sure there are good transport links from the nearest town or city.

Do you need a car park?

Having a car park is always handy, but it’s especially important if you’re launching your restaurant franchise unit in an out-of-town location away from public transport links. If your shortlisted premises don’t come with parking spaces, consider choosing a location near a multi-storey car park customers can use instead.

Do you have the marketing power to attract people living far away?

Customers are often happy to travel to a restaurant if they’re tempted by clever marketing. If the franchise you’re joining has a fantastic promotional scheme in place, you’re more likely to be able to draw customers from further away. The better the advertising, the more customers you’ll attract, the more remote you can be and the more money you can save.

Is the location accessible?

All restaurant owners should take the time to make sure their site is accessible to those with mobility issues. This consideration is a basic requirement, but it’ll also help you attract the largest possible proportion of customers.

What will your opening hours be?

Your working hours should influence the location you choose for your restaurant business. For instance, if you’re selling healthy breakfast and lunch options to take away, a location on a commuter route or in a city-centre close to offices may be most profitable. If you’re focusing on meals for families or weekend brunches, a high street site could be a safe bet.

How much space do you need?

Unless you’re investing in a compact takeaway business, you’ll probably need a decent amount of space, not only for your eat-in diners, but also for the kitchen. As a guide, you’ll need around five square feet of kitchen space for every customer seat you have. It may not be worth splashing the cash on a large restaurant in the heart of the city. So, weigh up the costs and choose a location offering good value for money for the size of restaurant you need.

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How affordable is the location?

It’s no good bagging the best spot in town if your forecasted profits won’t cover the rent and initial upfront costs. Do some research to balance costs with income potential to make sure you won’t get into catastrophic debt before you’ve even turned a profit.

Are there competitors nearby?

Do some research to find out if there is space in the market for your restaurant franchise unit. Areas can only support so many restaurants with the same offering, so if the area already has three successful curry houses, opening another might not be the best move.

How have previous site occupants fared?

If your shortlisted sites were used as restaurants previously, take some time to look into their success rates. If each business only lasted a year or two, this could be a sign something’s not right. The location may not benefit from much passing trade, or it might have developed a reputation for poor quality or dreary ambiance.

What is the crime rate?

This factor may not top your priority list, but if you open your restaurant in an area with a high crime rate, you may be setting your business up for disaster. Firstly, customers will be reluctant to visit if they worry about the prospect of being mugged on their way in. And secondly, being burgled may cost you a significant amount of income as you work to re-open the restaurant and prepare for diners again.

Find out more

If you’re in the process of finding a location for your restaurant or are interested in learning more about running your own business in the food service industry, we can help. You’ll find hundreds of resources here at Point Franchise designed to support entrepreneurs as they take their first steps into business ownership.