Are you getting the expansion itch? Most restauranteurs that double as entrepreneurs know the feeling. Their existing locations are off and running with packed shifts, great reviews, and regular Instagram posts by their loyal guests. But, as anyone who’s ever expanded will share, what works in one location doesn’t necessarily work in another. There are several criteria to consider.
At EMERGING, our real estate and data science divisions work together to develop a growth plan for new sites and determine the best locations based on the highest profitability and lowest risk. While every concept’s “best location” differs widely, we thought we’d share some of the hot spots around the nation, the cities that restaurants are flocking to in search of the next big breakout.
How did these cities make our list? First, they needed a solid reputation as one of the next great food cities in the making. They also needed access to investors, a visible labor pool, affordability, and a growing population with some disposable income.
We’re fairly certain that this city comes as no surprise for those with a pulse on our nation’s population trends. Austin has been vying for one of the top spots in the tech world, boasting a solid venture capitalist population and drawing in big companies like Tesla, Google, and Amazon. What was once a barbecue haven has branched out, offering a diverse dining scene with upscale restaurants intermingled with the best Tex-Mex!
We know it’s rare for a small town to make a popular location for restaurant expansion. It is, however, one of the fastest-growing cities in the state. Additionally, not only did Bozeman make Food & Wine’s Best Food Cities list, but it also ranked third in WalletHub’s Best Small Cities to Start a Business. Moreover, it has all the hallmarks of a town destined for food fame, and restauranteurs have heeded the call. In the past year, over 12 restaurants have opened their doors in this college town known for its panoramic mountain views.
Also called the City of Trees, Boise is known for its abundance of outdoor activities and millions of miles of wilderness. Boise came in number five on WalletHub’s Best Cities to Start a Business and made Food & Wines’ new culinary capital list. Restaurants enriching the dining scene include The Lively, where chef Edward Higgins enhances local ingredients, like Idaho ruby trout with vermouth butter crust.
Charlotte, North Carolina
Charlotte is currently the third-fastest growing city in the U.S., making it a hot spot for foodies and those that serve them. Food & Wine reported on several food projects transforming the Charlotte landscape, including the Optimist Hall, a once textile mill turned into a food hall. The town came in 13th in WalletHub’s analysis and 3rd in Policygenius’s look into the best cities for new businesses. It made the grade partly due to a low cost of living, an educated workforce, and above-average business survival rates. One of the popular spots in town is Noble Smoke, a restaurant with a beer garden and 2,000 square feet dedicated to a smokehouse.
The population of the Orlando-Kissimmee-Sanford metro area is projected to grow from over 2.7 million in 2022 to over 4.8 million by 2060, making it the 15th fastest growing metro area in the U.S. This home of the Walt Disney World Resort made WalletHub’s number one spot in the best place to open a business. Because it’s a global destination that welcomes over 72 million guests every year, it remains a top spot for new restaurants. It’s also home to 16 restaurant headquarters, including Darden Restaurants and Ruth’s Chris Steak House.
St. George, Utah
The second small town to make the list came in second in WalletHub’s analysis, surpassed only by Washington, UT. The U.S. Census Bureau reported that St. George, Utah experienced over 5% growth from July 2020-2021, growing to over 191,000 people and making it the top county in numeric growth. What draws people there? For many, it’s the quality of life and economic opportunity. For restaurants, it’s developing a reputation as the new foodies’ paradise, attracting restaurants like Cliffside and Red Fort Cuisine of India.
So, how do you determine where to open your next location? It’s usually best to distance yourself emotionally and take a close look at the restaurants per capita and an in-depth look at the population in the area and how the demographics compare to your successful operation.
How long until a new restaurant is profitable?
TouchBistro reports that most restaurants start turning a profit after three to five years. Of course, that number varies widely. Restaurants are, however, usually a long-term investment, requiring time for operational costs to stabilize and word of mouth to attract your loyal guests.
What U.S city has the most restaurants?
According to Finances Online, San Francisco has 39.3 restaurants per 10,000 households, making it the most restaurant-dense city in the U.S. It’s followed by New York City, Boston, Seattle, and San Jose.