How to Choose the Right Location for Your Restaurant

From assessing the competition to analysing foot traffic, researching local demographics and understanding local council requirements, there’s a lot to think about when choosing the right location for your restaurant.

In this article, we deep dive into how to conduct your location analysis and explore some of the main points you need to consider when choosing a restaurant location. 

Location analysis: Find the best location for your restaurant

Before setting your sights on a location for your restaurant, it’s first important to conduct a thorough location analysis to ensure you’re setting up shop in the best possible place.

Your location analysis should focus on the general area or suburb where you plan to open your restaurant. The Australian Bureau of Statistics is an excellent place to start your research, but you should also take the time to visit your desired location to get a real feel for the place. 

When conducting your location analysis, it’s crucial to answer the following six questions.

1. What demographic is most prominent?

Understanding the demographic makeup of a location and mapping the traits of the demographic to your target customers is a crucial first step in choosing a location for your restaurant and will play a critical role in your restaurant’s success.

For example, a fine-dining restaurant may do better in an affluent neighbourhood, whereas a quick-service restaurant may do better in a busy commercial area.

To paint an accurate picture of your target customer, consider the following:

• What is their age/ income level/ occupation?
• What are their values and beliefs?
• What is their budget?

Once you’ve answered these questions, it’ll be much easier to understand if the demographic of your chosen location aligns with your target market.

2. What are the positive and negative aspects of your location?

No location will be one hundred per cent perfect, and each area will have its own list of pros and cons. If you’re weighing up a couple of locations for your restaurant, it’s essential to list all the positives and negatives associated with each area to ensure you’re making the best decision. 

Here are some things to consider.

• Visibility – is your venue easily visible from the street?
• Accessibility – is your venue easy to access? Are there stairs to enter, for example?
• Growth – is the area experiencing economic growth or decline?
• Safety – how safe is the local area?
• Affordability – how affordable is rent in the area?

3. Are there good public transport links?

The accessibility of your venue will play a huge role in its success, so it’s essential to assess how easy it is for people to make their way to your restaurant. Choosing an area with good public transport links is a surefire way to ensure as many people as possible can access your venue. 

When analysing potential locations, take note of any nearby train stations, bus routes or taxi ranks. If a location doesn’t have the best links to public transport, it’s important to check for ample parking in the neighbourhood or if it’s easily accessible on foot.

4. Is there a lot of foot traffic?

The amount of foot traffic that runs through a neighbourhood is another critical element to consider when choosing the right location for your restaurant. 

If your restaurant is located on a main street or busy thoroughfare, you’re more likely to attract people through your doors. However, if your venue is down a quiet side street or off the beaten track, you’ll have to work a little harder to let people know where you are and entice them in.

5. When is the location busy and quiet?

Visit your chosen location at different times throughout the day and on different days of the week to understand when the busiest and quietest times are. This will help you to understand if the location is right for your type of venue and decide if you should open for breakfast, lunch and dinner every day or if it will be more cost-effective to close during quiet times. 

6. What is the competition like?

Take the time to evaluate the current competitive landscape in your chosen location. Start by outlining all other hospitality venues in your area and pay particular attention to businesses with a similar concept. You might be opening an Italian restaurant, but this doesn’t mean other Italian restaurants will be your only competition. Other restaurants, pubs and bars that offer pizza or pasta, for example, will also provide competition for your new restaurant. 

Things to consider before committing to your location

Once you’ve conducted a thorough location analysis to help choose the right location for your restaurant, the next step is to deep dive into your chosen area to minimise the risk of any hurdles that might make it difficult to open your venue.

To help further assess your chosen location, consider the following questions. 

Does your location align with your operation?

When you’re looking at your location in more detail, say a specific street, or a potential venue, it’s important to assess if the location will be able to accommodate your operational needs. 

Will you have regular deliveries from your suppliers, for example? If so, is there any space out the back where delivery trucks can unload? Or, is there ample, unrestricted parking available at the front of your venue that can accommodate delivery vehicles? 

If you’ve found a potential venue, does the size and capacity work for all the services your restaurant plans to offer? If you’re going to offer online delivery, through Uber, for example, is there anywhere for delivery drivers to wait without getting in the way of customers?

Even if you’ve found the perfect area for your restaurant, the exact location requires a lot of consideration to ensure your business can operate smoothly with minimal disruption to customers.

Are there complementary businesses nearby?

As we touched on earlier, it’s important to scout out the local area to see if there are any competing businesses nearby. Ideally, you don’t want to open a restaurant in the near vicinity of a similar, well-established restaurant. However, it is a good idea to open near businesses that will complement your restaurant.

For example, if you’re a full-service restaurant, finding a venue near a theatre could be a great way to attract new customers who are looking for a bite to eat before or after the show. Similarly, if you’re opening a QSR, you might look to open it near a cinema, bowling alley or sports ground so people can quickly grab something to eat beforehand. 

Why did the previous business leave?

If you’re looking to move into an existing commercial venue, try and find out why the old business left and if the venue has had high space turnover in the past. If the location has seen high attrition, this may be a red flag, and you’ll want to do further research into why this might be the case.

It’s also a good idea to pop into other local businesses in the area and chat to the owners or managers to get an understanding of the area, what it’s like to run a business in the neighbourhood and if they’ve experienced any issues. 

What are the local council requirements?

Before setting your sights on your dream location, take the time to research local state and council requirements for opening and operating a restaurant.

Requirements vary from state to state and council to council, but you’ll often need to obtain certain certificates and licences and register your business with the local council before you can start trading. 

In most cases, no matter where in Australia your restaurant is located, your new restaurant will need the following:

• Business licence – you’ll need to obtain a business license by registering your restaurant with the local council. Please visit the Australian Business License and Information Service website for more information.
• Council certificates – you’ll need to apply to your local council for several certificates, including zoning, fire safety, occupation and compliance certificates.
• Liquor license – any venue that sells alcohol will need to obtain a liquor license from the appropriate state or territory government. However, the type of license you’ll need will depend on your business operations.
• Food license – you’ll need a food licence to legally sell food in your restaurant. Licencing requirements vary by state and the size of your venue. Visit your local state government website for more information.

The application process is often lengthy and costly, so it’s crucial to get a head start on applications early on in the process. And depending on your operational requirements, you may need several other licences and certificates, so it’s essential to consult with your local council before opening.

Is there potential for growth?

While your research might indicate that your chosen location is perfect, it’s essential to consider if there’s any potential for growth in the area or if there’s anything that might impact the success of your business. 

For example, is the area experiencing rapid economic growth, with new commercial and residential properties under construction? Or, has the area experienced an economic decline in the past few years, with people moving out of the area and businesses closing down.

All of these aspects need to be taken into consideration when looking for a location for your restaurant, as it will have a significant impact on the success of your business and the ability for it to grow in the future. 

Restaurant location: choose with confidence

Your restaurant location can make or break your business, and choosing the wrong area can set your venue up for a fall before you even open your doors. Therefore it’s crucial to take your time and thoroughly research the local area and demographic within it to understand the local dynamics and how your business will fit in.

Once you’ve conducted a thorough location analysis and spoken to other business owners in the neighbourhood, you should be confident in your chosen location and ready to take the next steps to open your restaurant.