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How to get the right location for a pizzeria

Updated on August 4, 2015

finding the right store

Introduction

One of the big decisions involved in opening a successful pizzeria is planning the right location for the pizzeria. The first idea to consider is the major age group in the area where you want to locate. The most frequent customers to most pizzerias are between 25 and 35 years old and you would want to locate close to this group.

This demographic group also tends to rent apartments rather than own homes, so the idea of locating your pizzeria around large groups of apartments, is a good idea. Also smaller children between 3 and 11 years old are the biggest pizza fans, so to locate in an area that has these age groups is a good idea.

The trading radius for most pizzerias is within a three mile radius of the store, so we are looking to find a store to use in which we have the right age groups within a three mile radius. Also to establish the right amount of business, you will need to do some business during the day. That means dealing with employees while they are at work.

The commercial locations that are most likely to pay off for you are those that find it hard to go out to lunch. This would include Hospitals, doctors offices, and retailers like hair dressers, auto parts shops, and auto dealers and repair shops.

These are all businesses that you would deliver to, and another source of daytime business are grade schools that order large amounts of pizza for pizza parties about three times a year. If you can locate a store in an area like that, you have a good chance of success. In the next section we will look at how to find the right demographic groups.


The right zip code

Locating your pizzeria in the right zip code

The first thing to do is to find the right zip code, where you would want to locate your store. Then you go to Google search and type in demographic data and the zip code, and you go down to city data. Com. You can usually find all the demographic data you need on this site.

You will be looking for a zip code where the largest segment of adults are between 25 and 35, and also where the largest segment of children are under the age of 12. The third segment that we need to look for is the population under the age of 35. All of these statistics are available over the internet and they are available at no cost.

You should also get a statistic on the amount of renters, and in this case the higher the percentage of renters the better. You then need to put together a spreadsheet with all the required data for the zip code, and if possible find data for two to three zip codes, so you can compare them, and pick the best zip code. Next we will look at finding a store location.

Finding the right store location

Once you have found the right zip code, it is time to locate the right store. The ideal store would be around 1,000 sq ft, and about 20 feet wide by 50 feet long. You should be looking for a five year lease at a lease rate of about $1.25 per sq ft per month. This five year lease period gives you a reasonable amount of time to succeed. Most business failures are within the first five years.

The store should be located in a smaller strip style shopping center with plenty of parking for customers and delivery people. It should be a location that customers feel safe in, and is well lighted with other shops that are open at night. It is a very lonely feeling to be the only business open late.

The next thing is to check the utilities at the store you have chosen. You want at least a 3/4” natural gas line for the oven, and at least a 250 amp service for the electric to the building. The next thing to check is the condition of the floor, and the ceiling in the building.

If the floor is in decent condition, and it can be cleaned and waxed, this could save you a couple thousand dollars. Look for water stains on the ceiling which would indicate a possible leaking roof. Once most of these things are to your satisfaction, you are ready to start negotiating the terms of the lease.


getting the best deal

Negotiating the best deal on the store

This section is concerned with getting the best possible deal on the store once you have made a final choice. You need to make up a list of the stores shortcomings that you can take with you to a meeting with the realtor. The standard lease agreement the realtor will look for is two months deposit on the store, you take the store as is, and you start paying rent as soon as possible.

Your counter offer is that you will pay one months rent for deposit, they will guarantee in writing that the roof and all mechanical's are in good condition, and you get two months build out time, to do the remodeling, before paying rent. You also want to get the rental as close to $1.25 per sq ft per month as possible. If the tile floor is bad you want to try and get some monetary consideration for that as well. You also need to try and get any bad ceiling tiles replaced as well. This is generally what you need to look for when making a deal on a store.

Summary

These are just some of the things that I have learned over the last forty years when helping friends and myself negotiate deals on new space to start pizzerias. If you get a good deal on a store you have more to spend on remodeling and equipping the store. If you have unlimited funds then what you spend doesn't matter, otherwise you had better be careful with every penny you spend. That is the only way you will become a success in the pizza business.

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