How QSR Brands Can Optimize Site Selection
The fast-food industry is one of the most competitive sectors in commercial real estate (CRE). According to IBISWorld “The level of competition is high and increasing in the Fast Food Restaurants in the US industry in United States.” Quick Service Restaurant (QSR) brands like McDonald’s, Chick-fil-A, and Taco Bell invest heavily in finding the ideal location that maximizes foot traffic, visibility, and accessibility. Selecting the right site can make or break a restaurant’s profitability, so it’s essential to understand the factors that contribute to a successful QSR location.
Here’s a comprehensive look at the primary site selection factors, strategies for finding CRE opportunities, and best practices for backfilling QSR spaces.
Table of Contents
Understanding the Importance of Site Selection
Site selection is a critical aspect of establishing a successful quick service restaurant (QSR). The right location can make all the difference in attracting and retaining customers, driving sales, and ultimately, ensuring the success of the business. A well-chosen site can provide a competitive edge, while a poorly selected site can lead to decreased foot traffic, lower sales, and a struggling business.
When it comes to QSRs, location intelligence is particularly important due to the high volume of customers and the need for easy access and convenience. A location with high foot traffic, proximity to residential areas, and easy access to major roads can significantly impact the success of a QSR. Additionally, the site should be visible, accessible, and have ample parking to accommodate customers.
In today’s competitive market, QSRs must carefully consider their site selection to stay ahead of the competition. By choosing a location that meets the needs of their target market, QSRs can enhance customer satisfaction, increase sales, and establish a strong presence in the market.
What Goes into QSR Location Analytics?
Location
Location and high foot traffic is everything in the QSR industry. Brands benefit from high-traffic, high-visibility locations near busy roads, intersections, and commercial hubs. Proximity to large residential areas, schools, office buildings, or shopping centers helps attract a broad customer base, while access to major highways or transit hubs draws in commuters, expanding reach beyond the local neighborhood. Strategic location and effective market research can attract more customers, significantly increasing foot traffic and overall patronage.
In shaping these environments, commercial real estate (CRE) developers are instrumental. They create the infrastructure—from office towers and retail centers to residential communities and industrial parks—that supports and enhances QSR locations. For developers, infrastructure data is essential for identifying high-potential sites, planning projects, and making informed investment decisions. By analyzing trends in infrastructure and tracking planned developments, CRE professionals can pinpoint growth areas and capitalize on new market opportunities. The more accessible and visible the restaurant is, the better it can capitalize on impulsive visits from passersby.
Facility Amenities/Features
Certain facility features are vital for QSR locations. Drive-thrus are a must-have for many fast-food restaurants, as a well-planned drive thru lane increases customer throughput and caters to those looking for quick, convenient options. Other important amenities include ample parking, easy ingress and egress, outdoor seating (if permitted), and accessibility features. Restaurants should also consider the layout and condition of the kitchen, seating areas, and FF&E (furniture, fixtures, and equipment) to support operational efficiency and a positive customer experience.
Competitors
Competition can be both a challenge and an opportunity for QSR brands. While a high concentration of similar restaurants might risk market saturation, positioning near complementary businesses, like coffee shops or convenience stores, can create synergistic opportunities. Many QSR brands use competitors’ site selection strategies as a guide, identifying high-traffic areas where similar businesses are already doing well. Strategically selecting a location for a QSR restaurant near other QSRs can attract overlapping customer bases and boost overall foot traffic.
A familiar sight in commercial landscapes is clusters of similar businesses—fast food chains, gas stations, electronics retailers—grouped close together. This phenomenon, known as clustering, is driven by the concept explained in Hotelling’s Model of Spatial Competition. According to this economic theory, businesses aim to be in high-demand locations to maximize customer attraction and market share.
Because each business is vying for prime access to customers, they often end up in the same area, leading to clusters of similar brands. This clustering creates a competitive equilibrium that can benefit all parties involved, despite increasing competition. For example, two QSR brands located near each other might share foot traffic, effectively boosting customer options and drawing a larger crowd. For QSR brands, clustering remains a powerful strategy when choosing a site, as long as the benefits outweigh the risks.
Nearby Residential
The proximity to residential areas is critical for many QSR brands, especially those targeting families and young professionals. Sites close to high-density residential neighborhoods increase the chances of repeat customers, especially for breakfast, lunch, and dinner rushes. Understanding the demographics of these nearby areas, including age, income level, and household size, can help brands tailor their offerings to better meet the needs of local residents.
How To Find CRE Opportunities Near Densely Populated Areas
Use Residential Data and Demographics to Inform QSR Site Selection
For QSR brands aiming to tap into high-density residential areas, leveraging residential data and demographic mapping tools is essential. These tools provide insights into population density, income levels, and spending habits in specific areas, enabling brands to make data-driven site selection decisions. Platforms like Hubexo can offer valuable demographic data layers, helping brands identify profitable markets with high concentrations of target demographics.
Example of Demographic Data by Hubexo
Search Existing and Planned QSR Projects by Your Competition
Keeping an eye on competitors’ site selection can reveal locations for new QSR openings. By monitoring both existing and planned projects, QSR brands can see competitor strategies and assess which areas are becoming saturated or overlooked. Analyzing competitors’ performance in certain locations can also provide insights into consumer behavior and preferences in those markets, helping brands make more informed decisions. By analyzing competitors’ performance in certain locations, QSR brands can identify the best restaurant site for their new openings.
Scope out your competitors by chain using Hubexo– we track most!
Track Quick Service Restaurant Building Permit Data
Building permit data is a valuable resource for QSR brands looking for growth opportunities in rapidly developing areas. This data highlights where new residential, commercial, or mixed-use developments are planned, enabling QSR brands to enter emerging markets before they become overcrowded. For example, Construction Monitor provides permit tracking tools that allow brands to stay updated on new projects, helping them identify and act on high-potential locations as soon as development begins.
Explore how Construction Monitor’s data can help you enhance QSR site selection and optimize growth.
What Goes Into A QSR Backfill?
When a QSR site becomes vacant, brands have the option to backfill the location, reusing the space for a new restaurant or adapting it to fit their brand’s requirements. Here’s what goes into a successful QSR backfill.
Site-Specific Needs
Backfilling a QSR location involves adapting the existing space to meet the operational and customer experience needs of the new brand. Key considerations include:
Kitchen Equipment: Ensuring the kitchen layout and equipment are suitable for the new brand’s menu and service model. This may involve installing new appliances or reconfiguring the kitchen layout.
Furniture, Fixtures, and Equipment (FF&E): Customizing seating, counters, and other furniture to match the brand’s aesthetic and functional needs.
Accessibility Features: Adhering to ADA standards and ensuring accessibility for all customers, including ramps, accessible bathrooms, and other features.
Parking and Drive-Thru: Assessing parking capacity and the functionality of the drive thru lane. A well-placed drive-thru can significantly increase customer throughput, so brands may need to make adjustments to improve traffic flow.
Security: Installing appropriate security measures, such as surveillance cameras and proper lighting, to protect customers and employees.
Builders and Subcontractors
Backfilling often requires collaboration with builders and subcontractors who specialize in restaurant fit-outs. These professionals can handle tasks such as kitchen equipment installation, structural modifications, and the installation of signage and branding elements. Typical work involved in a QSR backfill might include:
Plumbing and Electrical Work: Adjusting kitchen plumbing and electrical systems to fit new appliances or layouts.
Interior Modifications: Updating walls, flooring, lighting, and other interior features to create a cohesive brand image.
Drive-Thru and Parking Lot Adjustments: Making changes to the drive thru lane or re-striping parking lots to improve vehicle flow and increase safety.
Exterior Signage and Branding: Installing new signage and exterior branding elements that align with the QSR’s brand identity.
Implementing a Successful Site Selection Strategy
Implementing a successful site selection strategy requires careful planning and execution. By following these steps, QSRs can increase their chances of success:
Conduct thorough market research and analysis
Identify the target market and their needs
Evaluate potential locations based on factors competition, and accessibility
Analyze data and make informed decisions
Choose a location that meets the needs of the target market
Develop a comprehensive business plan that includes marketing, operations, and financial projections
Secure funding and obtain necessary permits and licenses
Launch the QSR and continuously monitor and evaluate its performance
By following these steps, QSRs can implement a successful site selection strategy that drives success and growth.
Ready to take your QSR site selection to the next level?
Optimizing site selection is an important part of success for QSR brands. By focusing on high-impact factors like location, foot traffic, and facility amenities, brands can ensure they’re choosing locations with the best potential for high sales volume. Leveraging tools like demographic mapping, building permit tracking, and competitive analysis can further enhance decision-making. Lastly, for brands considering backfilling, understanding the specific needs of the site and working with skilled builders can turn a vacant spot into a thriving QSR location.
Locations near a university campus can significantly boost foot traffic, making them ideal for QSR success. With the right strategies, QSR brands can navigate today’s competitive CRE landscape and position themselves for long-term growth and profitability. Ready to take your QSR site selection to the next level? Book a demo with Hubexo today.