Choose a Perfect Location for Your Restaurant in Hong Kong - Process, Tips & Strategy

Dos & Don'ts of Choosing a Location for Restaurant

A. District Characteristics and Foot Traffic

When choosing a location, you first need to understand if the characteristics of each district and its primary customer base align with your restaurant's brand positioning.

Take a POKE Hawaiian fish rice bowl specialty store as an example. Since the food has attributes of being both fast, convenient, and healthy, and is not considered cheap, the primary target customer group would be office workers with stronger purchasing power. Therefore, when selecting a location, consider commercial districts like Central, Wan Chai, or Tsim Sha Tsui.

At the same time, observe the district's demographic structure. Are there more residents or office workers? Similar demographic structures will generate similar foot traffic patterns, and the times people move around will be roughly the same. For instance, in residential areas, foot traffic usually occurs during commuting times, meaning more people are moving around in the morning and near dusk. In commercial districts, the peak foot traffic is typically during the lunch hour.

Besides the timing of foot traffic, consider the flow path. This is especially important for fast-food outlets and 'cha chaan teng' style restaurants. Is your shop located along the route people take to work or school? Or do they need to cross the road to patronize it? Is there parking nearby? If your shop is right next to an MTR station exit, you'll almost have a 100% guarantee of stable foot traffic, which can reduce operational pressure. However, note that rents for such locations are usually higher.

Further Reading: Complete Guide to Opening a Restaurant in Hong Kong: Six Key Secrets!

B. Foot Traffic Indicators

Business owners have likely heard of the "clustering effect." Crowds mean money because consumers often choose one location to fulfill their dining needs collectively. For example, Mong Kok in Hong Kong has many affordably priced restaurants clustered together, with students being the main demographic. Besides stable foot traffic, such areas gather customers with similar spending habits, helping restaurants quickly attract their target audience.

In terms of foot traffic volume, the most common indicator when selecting a site is whether at least 20 people pass by the shop per minute. This metric is particularly relevant for snack shops and fast-food operators. Many restaurants also choose to open near convenience stores or chain restaurant brands, hoping to achieve basic foot traffic through clustering. Furthermore, since the site selection for convenience stores and chain brands often undergoes rigorous evaluation, if an area has many such shops clustered together, your turnover likely won't be too bad!

Read more: What is CRM? Why is CRM Important to Restaurant & F&B Businesses? (eats365pos.com)

C. Is High Vehicle Traffic Good or Bad?

While crowds bring cash flow, high vehicle traffic might not!

Locations with high vehicle traffic, such as those near industrial areas, often have significant car flow but may not suit all types of shops. If parking is not allowed directly outside your restaurant (e.g., double yellow lines, no nearby parking spots, facing a bus stop, or near a highway entrance), despite high visibility, it might deter customers who drive, as the inconvenience could make them give up on visiting.

4 Considerations of Choosing a Good Place for a Restaurant

I. Entrance: Shop Front Width, Feng Shui

The width of the shop front directly affects visual appeal. It's recommended that the shop front width be at least three meters; otherwise, people might easily walk past and overlook your restaurant.

A spacious entrance also helps improve customer flow. Some business owners who are particular about Feng Shui might be concerned about things like utility poles, facing the sharp corner of a building, or facing a road directly. From a practical standpoint, an entrance free from obstructions or unpleasant odors (like from drains) will naturally increase customers' desire to patronize the establishment.

II. Dining Area: Layout, Natural Lighting

For dine-in restaurants, the spatial planning of the dining area is key to encouraging repeat visits.

You might need to pre-plan several required zones, such as a waiting area, 2-4 person seating, group dining area, bar counter, checkout area, etc. Assess whether the customer flow path upon entering is easy to plan. Some building structures like beams and structural walls cannot be modified during renovation. Therefore, if the basic layout of the shop front meets your zone and path planning needs, it can save you considerable renovation costs.

If you're primarily operating a brunch restaurant, consider choosing a location with natural lighting, which can significantly enhance your shop's appeal!

III. Kitchen: Power Supply, Drainage, Ventilation

The kitchen is the core of restaurant operations and one of the most critical areas to inspect carefully when selecting a store front for rent. First, you need to confirm that the electrical supply capacity meets the demands of all kitchen equipment, especially large or heating appliances like ovens, microwaves, refrigerators, and deep fryers. These demand significant power; insufficient supply can lead to frequent circuit tripping, impacting operational efficiency.

Next, the location of water outlets and smooth drainage are fundamental kitchen requirements. Kitchens use water frequently; if drainage is poor, it greatly reduces convenience and can easily cause hygiene issues. Additionally, Hong Kong restaurant regulations stipulate that those wanting to enter the F&B industry must apply for a "Water Pollution Control Licence" from the Environmental Protection Department before opening. This license is generally valid for five years, and the application fee is calculated based on the wastewater discharge classification.

The exhaust system is another hidden detail often overlooked by start-up restaurant owners. Effective ventilation equipment can quickly remove cooking fumes generated in the kitchen, maintaining fresh air in the restaurant and dining area, thus enhancing staff and customer satisfaction.

However, ensure that the expelled fumes do not disturb nearby residents. To avoid neighborly disputes or complaints, consider installing electrostatic precipitators, odor removal equipment, etc. Check if the exhaust vent position faces neighbors' windows and if it needs relocation, as such modifications can incur extra costs. It's advisable to confirm these details clearly when selecting the shop front.