As a restaurant real estate professional, you are an expert in spotting growth opportunities and staying on top of local market trends. So why should you invest in a restaurant market analysis? Here are our top ten reasons:
1. Open units faster. In order to generate revenue, you have to open units. A restaurant market analysis shows you where to look for real estate opportunities, saving time and allowing you to open units faster.
2. Determine how many franchise units you can sell. A restaurant market analysis will show you the total potential of a market as well as the predicted performance of each unit. Whether you want to sell the rights to the entire market, or keep the best performing sites for corporate development, the analysis can help you make the best decisions.
3. Minimize sales cannibalization. If you are trying to infill a market or expand into a neighboring market, you need to understand the extent to which a new unit will cannibalize sales at existing units. By measuring the expected cannibalization, you are better able to manage it.
4. Maximize cash flows. Opening new restaurant units is an expensive investment. A restaurant market analysis can help you to identify the order in which you should open units, allowing you to maximize cash flows to fuel further investment.
5. Determine if a market has the right customers. It doesn’t matter if a market has a booming population. If your customers, or the people who look just like them, aren’t there, then your units will fail.
6. Understand the effect of competition. A good market analysis will help you to understand the competitive factors that are driving a market and how that competition will affect your performance.
7. Identify the pockets of opportunity. A restaurant market analysis can be conducted as either a whitespace analysis, which ignores existing locations, or as an infill analysis, which helps you to find pockets of opportunity among your existing units.
8. Compare potential sites using data-driven metrics. What’s the difference between two specific sites? By predicting the performance of those sites using analytics, you can make better comparisons.
9. Justify the investment. Need to convince your boss that your real estate strategy makes sense? Having hard numbers and third party research helps you to present a convincing case.
10. Maximize total revenue. Ultimately, the main goal of any restaurant market analysis is to help you maximize your total revenue in a market. By showing you where you should open units, and where you should not, the analysis helps you to open great locations and avoid expensive mistakes.
Ready to Learn More?
Buxton’s suite of restaurant market optimization products is designed to help you know and understand markets so you can make the right real estate decisions and grow your business. Explore our solutions today.