The Reason Why You Won’t Find McDonald’s On A Lonely Island

Background
Have you ever actually thought about that question? Probably not. Why should you? Well, I thought about it because I wanted to dig deeper into the topic of which factors influence a location decision for restaurants. You would be surprised of how many things you actually have to consider. What I did first was doing a little brainstorming to try to find all the factors I could imagine which could influence such a decision. This is what I came up with and what I will explain later in greater detail:

Current Conditions
Nowadays, restaurants have to pay attention to their choice of location even more closely since a few decades ago there was a lot less competition on the market. Think about how globalization contributed to the competition between restaurants. In basically every larger city you can find food from almost every country and continent, no matter if it is Australian, Asian or African. Restaurant owners have to make the choice of what to offer and where to offer it.

Another effect of globalization is the increased travel which can provide great opportunities for the food industry. In 2012, international tourism is to reach one billion! Some restaurants nowadays depend almost entirely on tourists to generate revenues.

Goals
The obvious goal for restaurants and every other business is to generate profits. But for these profits to come, some serious research has to be done in order to satisfy consumers, customers, and clients.

Coming back to our initial question why you would not find McDonald’s on a lonely island, we find, that it presumably would not be the best place to generate those mentioned profits since apparently there are no consumers to eat the great food (monkeys and other critters do not count – how are they supposed to pay?).

And even though outside conditions might be quite nice (think of the sun, ocean and warm breeze) there is simply no point in going deeper into that question. Why? Well, there is one simple formula that explains it all:

No customers –> No money –> No business!

It’s as simple as that.

Analysis – Getting to the Core
So let us take another look at the mind map I created. In order to cope with the current conditions I mentioned earlier. We will have to consider all of the following questions:

•    Where do we want to operate? Right in the center or in the quieter suburbs?
•    Are we able to pay the rent in first place – also if business isn’t going as well as expected?
•    Who should visit our restaurant? Families with little children, tourists or business men?
•    Are there available parking spaces or do customers have to come by bus or train?
•    If we are profitable, do we want to expand? And what about summertime? Do we provide outside seating opportunities or not? Do people even want to sit outside (noise, smell..)?
•    Are competitors close by? Do they offer the same food?

Quite a lot, isn’t it? And there are probably even more things that have to be considered. But this should be enough for the beginning since this would go beyond the scope of this discussion.

Suggestions Of How To Address These Questions
First of all, sit down with your colleagues and do the research. Get all questions clear, know whom you want to attract, how much available money you have to spend and at which place you see your restaurant.
If you found the place, look at the people and find out what kind of clientele you would have. Is it a popular and busy place? If yes, you would probably have to consider opening until late at night. Are you willing to do so if you are only a small family owned business?

The Plan
You want to make sure to think about all possible options for your restaurant so you know where you are going. Superficial research just isn’t enough. Look at what competitors are doing, research the internet or search for professional advise.
If you take into account all these suggestions you should be able to find the perfect location for your restaurant.

Closing Words
What should be kept in mind is, that once the constructing work has begun, there is no way back as a lot of money will have already flown into the project.

So once again, research is everything: Think, investigate, evaluate, and THEN implement.

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5 Comments

  1. Elisa S.

     /  January 23, 2012

    Hey Saskia,
    I really like your post and the idea behind it. You applied the A3-model in a very clever and comprehensive way to show which steps and factors have to be considered before starting/ implementing a restaurant, and I think that is not only applicable for restaurant placements but also for every possible service company.
    I think you wrote your post in a very objective and professional way as well as you provided most relevant and informative information about your topic. The mind map is a great idea to visualize your topic and to provide the reader right away with an overview what the whole topic is about.
    Well done!

    Reply
  2. Saskia- great implementation of the A3 model! As Elisa already said, I also think you wrote that post in a very professtional way, as it was a kind of advice to people who actually want to open up a restaurant and you adressed them directly. I think that was a really good way of writing that post! I also really liked that you showed your mind map because that let me see how much effort you put into writing this post and that you really thought about it before!
    I personally think to achieve success with a restaurant, it either has to be something everyone likes (fast food, simple, easy food, something like that) or something really extraordinary which you do not see or get anywhere else. Actually the other day I saw a documentary about the 10 most extraordinary restaurants in the world. Here I found an article (unfortunately in German) about other strange restaurants: http://www.merkur-online.de/nachrichten/welt/restaurants-japan-11-12-2008-24825.html
    It seems to me that places like these are always well visited. And the funniest thing ist that in Japan monkeys actually to often kind of count, because you can find restaurants were they serve you ;).

    Reply
  3. Lilian

     /  February 12, 2012

    Hey Saskia,
    very good idea to create a mind map and insert it into your post! Your overall structure of the post is very clear and easy to read anyways, as you nicely applied subheads adhered to the A3 model, but the mind map is an additionally very useful medium to guide the reader through your thinking process!
    Clearly there are a lot of questions to be answered and problems to be addressed connected to the decision of what kind of restaurant to open and where the location should be. After reading your post I investigated a little bit and found an interesting page that offers supplemental information to what you already mentioned: http://business.feedfury.com/content/44578629-the-importance-of-restaurant-location-a-list-of-location-selection-criteria-for-a-restaurant.html

    Reply
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