Location is one of the few decisions in hospitality you cannot undo cheaply. You can change your menu, your staff, your prices, and your branding. You cannot easily move your restaurant. Which means getting location right matters more than almost anything else you will decide in the early stages.
This is a practical guide to how to evaluate a site before you sign anything.
Foot Traffic Is Not the Same as Your Traffic
A busy street does not automatically mean a busy restaurant. The question is whether the people walking past are actually your customer. A lunch venue on a street full of office workers has a very different opportunity than the same venue in a residential area where people mostly cook at home.
Spend time at the site. Not just once, on a Tuesday at 11am when you happened to be free. Go back on a Friday night. A Saturday morning. A Monday lunchtime. Count how many people walk past. Watch where they go. Notice who they are.
Understand What the Rent Actually Costs You
Rent does not just appear as a line on your P&L. It sets a floor for how much revenue you need to generate before anything else makes sense. A common rule of thumb is that occupancy costs including rent, outgoings, and associated costs should sit between 8 and 12 percent of your total revenue. If the rent requires you to turn 400 covers a week at a high average spend to make it work, and the site cannot realistically support that volume, the deal is wrong regardless of how much you love the space.
Our restaurant opening assistance service includes site evaluation and financial modelling so you know what a location actually requires before you commit.
Look at the Competition Honestly
Competition is not always bad. A cluster of good restaurants can create a dining destination that benefits everyone. But competition from a venue that does exactly what you plan to do, does it well, and has been there for five years is a different problem entirely.
Walk every venue within a reasonable distance. Eat at the ones that are similar to what you are opening. Ask yourself honestly whether you are offering something meaningfully different or just hoping to take their customers.
Check the Lease Terms Before You Fall in Love
Operators fall in love with spaces before they read the lease. Then they find out the rent review clause allows the landlord to increase rent to market each year, or the fitout contribution requires them to spend money they do not have, or there is no demolition clause that protects them at the end of the term.
Get a solicitor to review the lease before you sign. The cost is small relative to the risk. And get someone with hospitality experience to look at the commercial terms, because a solicitor who does not understand the industry may miss things that matter operationally.
We cover the key things to check in our guide on what to do before signing a commercial lease for a hospitality venue.
Think About the Kitchen Before You Think About the Dining Room
Most operators evaluate a space based on how it looks from the front. The dining room, the natural light, the street presence. Then they get into the fit-out and discover the kitchen space is too small, the ventilation cannot support the cooking they planned, or the power supply is inadequate for a commercial kitchen.
Always assess the back of house as carefully as the front. Our kitchen design consulting service can assess any space and tell you what it will and will not support before you commit to a fit-out.
If you want a second opinion on a site you are considering, talk to Pestle and Mortar. We have assessed and opened venues across Australia and we can tell you quickly whether a location stacks up.
About the Author
Wayne Farmer is the founder and chief consultant at Pestle and Mortar, Australia’s hands-on hospitality consultancy. With experience running hotel kitchens, boutique dining venues, and a successful catering business, Wayne has spent his career helping Australian restaurant, cafe, and catering operators build more profitable, better-run businesses. Learn more about Wayne and how Pestle and Mortar works.