Opening a new restaurant can be a risky business. Owners need a solid business plan, an efficient yet friendly staff, delicious food and a little bit of luck.
Location is also key to the success of a new eatery. Entering a market that’s oversaturated with dining options or where the population is on the decline can spell disaster for a fledgling restaurant.
There are some markets where demand for new restaurants is high and restaurateurs are thriving. NerdWallet crunched the numbers to help find those places across the nation.
NerdWallet examined 530 cities in the U.S., each with a population of at least 50,000. They used U.S. Census Bureau data to calculate the score for each location based on demand for new restaurants and local economic conditions that could affect the success of those restaurants.
To analyze demand, they looked at population growth and density, and we also factored in median annual income and income growth, as well as restaurant sales per resident and the number of new eateries.
To assess economic conditions, they looked at payroll costs, growth in labor and median monthly housing costs. For more details on the methodology, see the end of this article.
New residents, new restaurants. Cedar Park, Frisco and Round Rock, Texas; and Fishers, Indiana, each saw population increases of nearly 10% or more in a three-year span. Those new residents helped drive the need for new restaurants. In Cedar Park, for example, where the population jumped over 20%, the number of restaurants more than doubled.
Suburbs drawing new eateries. Nearly all of the top 10 cities are part of a larger metropolitan area, such as Dallas and Austin, Texas; and Nashville, Tennessee — cities that have experienced a culinary renaissance, which has been extended to neighboring suburbs.
Best cities to start a restaurant
1. Cedar Park, Texas
The Greater Austin area is one of the fastest-growing metropolitan regions in the country, and Cedar Park, a major suburb, is reaping the rewards. The number of restaurants in Cedar Park doubled over five years, partly in response to a surge in new residents. Recent restaurant additions include In-N-Out Burger and Sushi Fever, which both opened in 2014. City officials don’t expect Cedar Park’s population growth to slow soon, so demand for new dining options should remain strong.
2. Mission, Texas
Heavy auto traffic can translate into heavy foot traffic for businesses, a fact that many restaurants in Mission are capitalizing on. New restaurants have popped up along the Interstate 2 corridor, which bisects this border city. Those eateries include Freebirds World Burrito, a fast-casual chain that opened in 2012, and the Tilted Kilt, a pub and restaurant that opened nearby. Owners of the Tilted Kilt looked specifically for a location along the expressway, which connects Mission with neighboring McAllen.
3. Franklin, Tennessee
Franklin is in the Nashville metropolitan area. The restaurant boom that has prompted chefs from across the nation to open up shop in Music City has extended to Franklin, as well. Residents in this wealthy suburb have a median annual income of about $60,000, and enjoy spending their hard-earned cash on a meal out. The number of restaurants in Franklin increased nearly 50% over a five-year period, while sales in the eateries top $190 million annually, which works out to over $3,000 per resident.
4. Smyrna, Georgia
Smyrna has transformed from a sleepy suburb to a modern bedroom community in the past few decades. The transition has brought an influx of residents — the city’s population increased nearly 30% from 2000 to 2012 — and so did demand for dining options. Four new restaurants opened in one month in 2012, including Happy Belly Truck, a mobile culinary endeavor that’s still going strong.
5. Round Rock, Texas
Round Rock is one of the fastest growing cities in the U.S. and is part of one of the fastest-growing metropolitan areas, to boot. The city’s rapid and continuing growth makes the market ripe for new restaurants. Round Rock residents welcome new eateries on a regular basis, including staples from nearby Austin such as Kerbey Lane Cafe, which expanded to Round Rock in May.
Read which cities are also ranked in the full article