A View From The Top

Capriotti's VP offers 5 tips for choosing the right location

Dennis Watts, VP of Real Estate of Capriotti’s Sandwich Shop, shares the lessons he's learned over the years about choosing restaurant locations.

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September 27, 2019

Editor's note: A View From the Top is a series featuring first-person accounts from some of the fast casual industry's most innovative leaders. If you are interested in being featured, send email to editor@FastCasual.com

By Dennis Watts, VP of Real Estate, Capriotti's Sandwich Shop

Reports show that 60% of restaurants will fail in the first year , and 80 % will close their doors before the fifth anniversary. So how can restaurant owners make sure they are not part of the overwhelming majority? Don't overlook critical factors that play a role in a restaurant's success — one of the most important being selecting real estate that will attract the right audience and bring your vision to life.

As Vice President of Real Estate at Capriotti's Sandwich Shop, my team and I have learned how to best maximize profit for our franchise partners at more than 100 shops across the nation by helping them to carefully zero in on prime real estate in their cities. Site selection is vitally important to any restaurant. In 2019, the restaurant industry has reached $863 billion with over one million restaurants for consumers to choose from. If a restaurant is located in a neighborhood with the wrong demographics, or if it is inconvenient to get to based on the flow of traffic, a consumer has plenty of other options to choose from. It is important to understand what qualities to look for in prospective properties to properly set up your business for success. Here are some lessons we've learned along the way.

1. Evaluate urban vs. rural

Determine who your consumer base is. Are you targeting city dwellers? Or families who settle in the outskirts of metropolitan areas? Don't be afraid of low-density maps in rural or suburban areas. People in these communities will drive up to 15 miles for lunch, so consider the fact that you will have the opportunity to pull from a larger circumference.

2. Dig deep into demographics

There is much more that goes into real estate beyond just the number of people in the area. Even though it may be heavily populated, restaurant owners should consider how much money the community is spending on eating away from home compared to surrounding communities. Consider other key factors, such as income per capita and per household. Understanding demographics will ultimately set you up for success in choosing where to set up shop.

3. Pick the right side of the road

Evaluate which side of the road will get more traffic. For example, breakfast restaurants should consider locations that are on the same side of the road as a highway exit. This allows for easy in and out on the way to work and it attracts truck drivers and early-bird road trippers. Also, consider placing your restaurant at an intersection so drivers stopped at a red light will see the location and be more inclined to consider pulling in.

4. Quality of competition matters

Even if there are few competitors in the area, it's important to evaluate how well the competition performs. It only takes one competitor to draw attention away from your business. Consider their popularity, success, location and convenience before selecting your site.

5. Don't Let the sticker shock scare you

Non-traditional venues, such as stadiums or airports, may have a larger sticker price, but don't let that deter you away. Look into the perks that come with the venue. Often these non-traditional spots come with a seating area, maintenance or provided condiments and utensils, which may be a cost-savings for you.

With careful consideration of these factors when selecting real estate, restaurant owners will be equipped to find the perfect site that will help attract consumers and maximize profits. On top of the other responsibilities that come with getting a restaurant off the ground, selecting smart real estate is the foundation to opening a business. Just like a building, if a real estate plan has cracks in the foundation, everything else under the roof of the restaurant is in jeopardy of being negatively affected. When owners take the proper time to research and weigh the pros and cons of a location prior to starting the buildout process, they will not have to worry about becoming yet another casualty of poorly located businesses.