The 10 Best Cities to Open a Restaurant in 2020

The restaurant business is highly competitive and often unforgiving to newcomers. There are many factors that will contribute to a restaurant’s success (or failure) including food quality, service quality, marketing, and competition. Restaurant success and new business success overall is almost impossible to predict.

However, there are several cities in the US where restaurant start-ups are more likely to succeed simply due to the environmental factors in that location.

Restaurant Environmental Success Factors

There are several environmental factors that may impact the success (or failure) of a restaurant that is entirely based on the location of that business. It is difficult to say which of these factors is most important, as all should be considered before deciding. No one location is going to be perfect in every category, so it is up to you to determine which factors are most important for your business. It is also crucial to be aware of which factors may be competing against your success in any given location.

Factors that contribute to how ideal a location for a new restaurant may be include:

  • Number of restaurants already located in the city
    • Obviously, the amount of competition in a given area will affect the success of your restaurant. Another factor that is more difficult to compare numerically but should be considered before a final location is chosen is how many direct competitors are in the area. For example, if you want to open a new Thai restaurant, how many other Thai restaurants are already in the city?
  • Annual restaurant sales per capita
    • This is one of the leading indicators of a city’s health for new restaurants, but it can be a bit trickier to calculate. While it is often readily available for some of the larger restaurant-dense cities, it may not be for a city you are considering.
  • The ratio of restaurants to households with an annual income of at least $100,000
    • An annual income of at least $100,000 for a household tends to indicate a good amount of disposable income that can be used for luxuries like going out to eat. This means you want to look for locations where the median income per individual is close to $50,000 or more.
  • Number of individuals aged 35 to 54
    • Unless your restaurant idea appeals to a different demographic (i.e. is a children’s party restaurant), then this is your target market. Obviously having a population that is made up of more of these individuals will be positive for your restaurant.
  • Number of restaurants workers per capita
    • Another factor that contributes to a restaurant’s success is the availability of labor in the area. Cities, where there are few restaurant workers, may make it harder for you to staff your business, and labor will likely cost you more. Additionally, restaurants that open in markets without much available labor tend to see a decline in service quality. This can lead to a major problem for restaurants because it can reduce the number of returning customers, which is critical to a restaurant’s success.
  • Rate of population growth (or decline)
    • High-growth cities need more of everything, including restaurants. Population growth is one of the leading indicators of success for new ventures, including restaurants.
  • Rate of job growth
    • Except for the number of restaurant workers available in an area, it can be difficult to see how the rate of job growth will impact your business. However, you want to make sure you are opening your business in a financially healthy community. The rate of job growth is one indicator of community financial health.
  • The overall cost of living
    • Similar to the rate of job growth, the overall cost of living is an indicator of how healthy your target community is. It can also be an indicator of how expensive rent or utilities might be in your location.
  • The five-year survival rate of new ventures
    • While the success or failure of other businesses in an area does not automatically mean your business will have the same fate, it can be an indicator of how many resources are available to new business owners in an area.

The 10 Best Cities for Opening a Restaurant

#1 – Cedar Park, Texas

Cedar Park is one of the major suburbs of Austin. The Austin area of Texas is one of the fastest-growing metropolitan areas in the country. In fact, Austin is the fourth largest city by population and the nation’s second-largest restaurant market.

Despite Austin being saturated, Cedar Park can afford additional businesses. Over the past three years, Cedar Park has consistently seen a population increase of more than 20%. Because of the population growth in the area, demand for new dining options remains strong.

Additionally, the median income for Cedar Park is just shy of $80,000, indicating a healthy number of households with annual incomes of at least $100,000 annually.

Texas generally has always ranked high for business “friendliness” due to low costs, large labor supply, significant job growth, the economic climate, and the educational quality. These factors combined with the population growth indicate that Cedar Park is a strong location for new restaurant ventures and should be a contender for any restauranteur.

#2 – Minneapolis, Minnesota

Minneapolis has a strong economy and a highly educated workforce. While not the highest median income on this list at just under $61,000 annually, this median does indicate a good amount of expendable income within the community. The median annual income, median annual housing costs, and unemployment rates in Minneapolis all point to a strong financial community, which is ideal when opening a new restaurant.

The annual growth rate for Minneapolis is on the low side, at just around .04% annually. However, because of the already-strong economy, this likely would not have a major impact on a new restaurant in the community.

#3 – Louisville, Kentucky

Louisville also has considerably better utility rates than other Midwestern states and is 26 percent lower than the national average. Even if your restaurant will not pay your own utility bills, these savings should translate directly into your rental costs. This also contributes to the lower cost of living in Louisville, which means residents have more expendable income despite the lower median of approximately $45,000.

Louisville’s annual growth is around 4%, which is fairly strong for an already-established city. Louisville also has growing music and food scenes, which create a significant amount of tourism revenue.

#4 – Riverside, California

Riverside is one of the fastest-growing counties in the country, and certainly the fastest in California. So if your heart is set on opening your doors to the California sunshine, Riverside is likely your best bet.

The largest demographic in Riverside is in the 25 to 44 age bracket, which makes up more than 27% of the entire population. This is a strong indicator that there are plenty of individuals within the targeted 35 to 44 demographic.

The cost of living in California is one of the highest in the country, but the median household income is a bit above the average in the US at $56,000. This indicates that residents do have a decent amount of disposable income for dining out.

#5 – Kansas City, Missouri

In Kansas City, there are about 20 restaurants and bars per 10,000 residents. To compare, San Francisco has nearly 40 restaurants and bars per person and New York City comes in at 25 per person.

Another interesting fact for restauranteurs considering Kansas City is that restaurants in the area tend to divide evenly between full service and fast food. So there is an equal opportunity no matter which type of restaurant you are more interested in opening.

Kansas City has a median household income of approximately $64,000, which puts it shy of the $100,000 marker. However, the cost of living in Kansas City is significantly lower than other locations in the United States, so the lower median income is not as big of a detractor as it could be in another location.

#6 – Boston, Massachusetts

The restaurant sales per capita are $3,404 in Boston, Massachusetts. The restaurant workforce is more than 5,100 and the median individual income is a little more than $107,000 per year. These are all positive indicators for a restauranteur who is considering Boston, especially the individual median income.

However, it is also important to note that Boston, MA is one of the more restaurant-dense cities on this list. Boston has close to 25 restaurants per capita, which means there is a significant amount of competition in the area.

#7 – Arlington, Virginia

Arlington may not be the hottest location on anyone’s list. However, with approximately 380 restaurants per capita and 7,700 workers, Arlington’s success location success factors are among the best.

The median income is slightly more than $108,000, meaning more than half of the households in Arlington make more than $100,000 annually. This indicates a significant amount of disposable income – which is a huge indicator of a restaurant’s success.

#8 – Ann Arbor, Michigan

Restaurant sales per capita in Ann Arbor were $2,877. The restaurant workforce is approximately 5,800 and the medium income per individual falls just shy of $58,000. While these numbers fall a bit short when compared to other cities on this list, Ann Arbor does rank well in other factors.

Ann Arbor’s population is growing by 8.2% annually. While not as significant as the growth in Cedar Park, Texas, it is still one of the fastest-growing communities in the United States. This growth is a huge success indicator for new restaurants in any given location.

#9 – Fishers, Indiana

Nearly 35% of the residents of Fishers are 35 to 54 years old, which is the prime target market for restaurants. Fishers is an affordable community, has strong schools, and residents have easy access to nearby Indianapolis. These factors have helped the city draw in young professionals, families, and businesses that cater to them specifically. Restaurants in Fishers earned more than $100 million in annual sales for 2018.

Fishers are only seeing about a 2% growth per year, likely due to the slightly higher median age of its residents. However, median household income is growing steadily, so although grow isn’t as high, the potential for increased sales remains strong in this community.

#10 – Milwaukee, Wisconsin

Milwaukee is one of the highest-ranked cities for starting a new restaurant by multiple sources. There is a strong private-sector financial community, and there is an established network of venture capitalists, angel investors, and economic development agencies. Wisconsin itself offers many tax incentives for businesses, and many agencies to help assist small businesses with their ventures at the state and city level.

However, Milwaukee’s population growth rate is on the lower end at a mere 1.3%. The median income for Milwaukee is only about $35,500 per year. So while the government assistance for small businesses makes it a great community, the population demographics may make it difficult to be successful.

Conclusion

It may be surprising that the cities that are traditionally known for having the best restaurants in the United States (and in some cases, the world) are absent from this list. Many of those markets are already filled to capacity. Additionally, a majority of restaurants operate in small cities and thrive there.

Depending on the concept you envision opening, your restaurant’s location will play a role. But the most important factor is the food you serve. If you can afford a good location and serve great food, that is ideal – but it is not critical to success.

Besides the food, marketing is probably one of the second-highest factors for a restaurant’s success, even before the location. No matter where you decide to locate your new restaurant, you might consider hiring a restaurant consultant to help you with your marketing efforts. Restaurant consultants can help business owners from logos all the way to menu creation and interior design.

Restaurant Round-Up: Eat Local in 417-Land

There are hundreds of restaurants in the Springfield-area, and competition is fierce. Our team at Longitude° knows all-too-well the struggles that restaurant owners face to stay in business and thrive – especially locally-owned restaurants.

As a restaurant branding and marketing agency, we do our best to maintain a pulse of the restaurant industry. This means that we make any and all excuses to try great food at great restaurants any chance we get. Plus, we love supporting local eateries as often as we can.

Sadly a large majority of people still opt to support large chain restaurants instead of local businesses. So, in an effort to help promote these incredible local eateries, we’ve put together a list of better local alternatives to the national chains.

Tater Tots

Next time you’re tempted to stop in and grab some tots from Sonic, think twice. Did you know that the recently opened Lucky Tiger not only has delicious sandwiches, but they’re always serving up the most mouth-watering tater tots this side of the Mississippi? Give this quirky and fun sandwich shop a try, and be sure to ask for the Kimchi Tots!

Lucky Tiger Sandwich Co. | Best Tots (and sandwiches)

Tacos

Why eat a bland, soggy taco from Taco Bell when you can stop into Team Taco just off of Cherry and Pickwick Street in the historic Rountree neighborhood. The taste of these tacos is second to none, and their ingredients are high-quality, unique, and the atmosphere is so fun and light. Definitely check them out. We recommend ordering the “B.A. Baracus” or the “Globetrotter.” Yo quiero Team Taco?

Team Taco | Best Tacos

Chicken Wings

Who doesn’t like some good wings every now and then? Buffalo Wild Wings may be a good place to watch a game and get cheap wings, but if you’re really looking for delicious and quality wings, look no further than Grad School. This small local restaurant serves up some of the best wings in the area. Try out the “House Hot Toddies”… your taste buds will thank you later.

Grad School | Best Chicken Wings

Gyros

We were shocked to find out that Arby’s served a “gyro,” but equally shocked to learn that people actually ate this when Greek Belly exists! This little restaurant located on Walnut St. in downtown Springfield has the perfect atmosphere to make you feel like you walked right into an authentic Greek restaurant in the heart of Greece. Try the Gyro Pita Wrap with Tzatziki – it’s our favorite!

Greek Belly | Best Gyros

Pancakes

Is IHOP still a thing? We get it, their pancakes are good at 1:00 AM in the morning when nothing else is open, but are they really that good? Next time you’re hungry for pancakes stop into Van Gogh’s Eeterie on Historic Commercial Street. They serve up the most perfect Dutch pancakes; making IHOP’s pancakes pale in comparison. Also, they serve breakfast all day, so if you’re craving breakfast for dinner they’ve got you covered.

Van Gogh’s Eeterie | Best Pancakes

Chicken Sandwich

Popeye’s and Chick-fi-la recently made headlines with their chicken sandwich feud. But to be quite honest, neither compares to a Spicy Chicken Sandwich from Hot Clucker’s. This “Nashville Style” hot chicken joint will leave you wanting more. They have four spiciness levels: The Nancy, 1 Cluck, 2 Clucks, and “Hot Mother Clucker.” Beware of “Hot Mother Clucker” unless you enjoy pain.

Hot Clucker’s | Best Chicken Sandwich

Cheeseburger

Don’t get us wrong, we like a Wendy’s burger every now and then, but it’s nowhere near the same level as a Black Sheep burger. These mouth-watering, flavorful, and juicy burgers will go down well with a boozy-shake and some salt-and-vinegar fries – our favorite. Not to mention, now with 3 locations in Springfield, it’s super convenient.

Black Sheep Burgers + Shakes | Best Burgers

  • Location: Three Locations: Chesterfield Village, East Sunshine, and Downtown off of Walnut Street.
  • Phone: (417) 319-5905
  • Website: https://www.blaaacksheep.com/

Breakfast Burrito

Thinking of stopping at McDonald’s for a breakfast burrito and coffee? Think again! Instead, you should make a quick detour to Kingdom Coffee for their breakfast burrito. You can get a bacon or potato burrito, and it comes with a side of salsa. This thing will seriously fill you up. And you might as well get one of the best cups of coffee in town while you’re there.

Kingdom Coffee | Best Breakfast Burritos (and coffee)

Support Local

Don’t get us wrong, it’s not a bad thing to visit a chain restaurant, but we hope that you consider supporting local businesses on a more regular basis. Not only are you supporting your neighbors, but you’re also likely to enjoy higher quality ingredients and better taste.

We hope this list was fun and informative. If you enjoyed this, drop us a line at info@longitudebranding.com. Thanks!

A Failed Experiment? How the “The Payless Experiment” by Payless Missed the Mark

In a recent publicity stunt, Payless Shoes created a faux-luxury shoe brand, “Palessi,” and hosted a fake grand opening event where they invited fashionistas straight off the streets of Santa Monica Boulevard, and tricked them into buying $20 shoes for $600+. This was cleverly named, “The Payless Experiment.” Unfortunately, I think this experiment failed.

History of Payless

This isn’t the first attempt for a budget-focused brand to try and defend the value they offer. And it comes as no surprise that Payless is attempting to gain new customers in light of their recently filing for bankruptcy, and closing 1,000 stores.

Payless was once the place to shop for discount shoes. But has failed to bring in a steady stream of customers.

These things didn’t happen last year just because consumers suddenly decided to heed the fashion advice of hipsters on Instagram. Payless, like many other brick-and-mortar stores, fell victim to the takeover of online shopping retailers such as Amazon, Zappos, and the like.

These things didn’t happen last year just because consumers suddenly decided to heed the fashion advice of hipsters on Instagram

However, the misfortune of their decline isn’t only due to outside influences and competition. I would also say that it’s the result of missing the opportunity to make a pivot in the right direction, at the right time, with the right strategy. This is evident in the fact that their stores typically feel like an eye doctor’s office, their logo looks like a computer company from 2003, and more recently – “The Payless Experiment.”

What’s the Purpose?

There is a certain desperate feeling that I sensed as I watched this 30-second commercial. Almost like a last-ditch effort to patch a sinking ship. With the captain at the helm, ordering his seamen to patch holes in the hull with duct tape.

Prank videos like these can be funny, and good for a little laugh every now and then, but if you look deeper, it’s actually sort of disturbing to get a glimpse into how little Payless seems to know about consumers. I think the way they produced this video could almost come across as insulting to their customers.

At its core, this video was using projection as a defense mechanism.

Projection is a form of defense in which unwanted feelings are displaced onto another person, where they then appear as a threat from the external world. A common form of projection occurs when an individual, threatened by his own angry feelings, accuses another of harboring hostile thoughts.

So in the case of “The Payless Experiment,” the argument could be made that those at the helm of Payless have unwanted feelings about how their brand is perceived in the market. Rightfully so in light of their bankruptcy and store closings. As a result, they feel threatened. Because of this feeling, they accuse fashionistas, “high-fashion” consumers, and basically anyone who doesn’t want a $20 pair of shoes from Payless of being dumb for how they decide to spend their money.

Like it or not, people purchase products and services based on how it makes them feel, how it connects to their core values, and how they believe it will solve their problems. This is a basic principle of branding. So, of course, it should come as no surprise that someone shopping on Santa Monica Boulevard wants to experience the feeling of buying the latest designer shoe straight from a runway in LA, and they’re willing to spend $500+ on a pair of shoes. On the flip side, someone shopping on a tight budget would want to experience the great feeling of spending $20 with a BOGO deal and getting two pairs of shoes for the price of one.

Neither one is wrong.

This video demonizes the first group, while inadvertently insulting the second group. There’s no need to defend shoppers who shop on budget alone, and there’s no benefit to demonizing luxury consumers who will pay premiums for a different experience. Bottom line, this video is unnecessary.

Lack of Brand Awareness

As mentioned above, this video alienates both their target customers as well as consumers who would never be seen dead at Payless. So it’s a lose-lose for Payless. The truth of the matter, so it seems, is that Payless either 1: doesn’t understand who their actual customers are or 2: doesn’t know how to attract their new desired demographic. Or it could be both.

This experiment doesn’t support their own stated position either. Their market position is literally in their name, “Payless.” Pay. Less.

Anyone who shops at their stores is concerned about one thing, and one thing alone – price.

However, with this video, Payless took a different approach it seems. Focusing primarily on style and quality, the main message seems to drive home the idea that Payless has high-end shoes that rival any expensive designer shoe quality and style. A message that likely doesn’t resonate with, nor matters, to the consumer who enjoy shopping at Payless.

If they are trying to attract a new audience of high-fashion shoppers this experiment has failed. Payless trying to seduce a luxury shopper is just not realistic. This shows a lack of self-awareness on behalf of Payless and the marketing team involved.

This experiment also failed if they were attempting to attract a younger, Instagram, millennial audience. Millennials are one of the biggest demographics of coupon cutters, and penny pinchers in the world. The budget for this video would have been better spent on ads targeting millennials with crazy good deals, and BOGO offers or investing into a better brand strategy.

Conclusion

It’s vital for any brand, no matter the size, to know their customers, know what makes them unique, and be comfortable in your skin. This is the purpose of a brand strategy, and “The Payless Experiment” is a prime example of what can go wrong if you don’t have a strong foundation in place.

This stunt only goes to show that Payless isn’t happy with their perceptions, and is attempting to change that. However, the approach they took with this stunt I think at best had no-impact, or at worse, a negative impact. The only redeeming factor is that it’s received a lot of publicity, and as the saying goes – any publicity is good publicity.


 

Do you agree or disagree? Would love to hear your thoughts. Email me directly at jeremy@longitudebranding.com

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