What if a major mid-priced steak chain put a smaller version of their steakhouse in an area that was growing with hotels, condominiums and thousands of tourists annually all within a two mile range. The location was on a corner of a shopping strip at a traffic light with access from all directions and street parking as well as excess parking in a lot behind the restaurant. To make the package even more attractive was the fact that no other chains existed within at least four miles.

A “no-brainer” you say. That’s what Outback Steakhouse thought about one of its locations. After five years and many thousands of marketing dollars, they closed the restaurant.

In The Restaurant Ebook it was predicted as well as another similar anecdote about a famous chain and one of their corporate decisions.

Placement of a restaurant is critical. Demographics and clear understanding of your potential guests’ demand and habits have to be part of the decision making process.

In the case of Outback, the location was on an island beach resort. There was a mix of residences within their target market, but not enough to sustain the location year round. A large part of the equation was that the thousands of tourists who visited the area were incorrectly counted heavily as potential customers. Outback failed to understand that a large contingent of travelers don’t want to go to a carbon copy restaurant they can visit at home. They want local unique restaurants that provide the travel experience they are seeking.

Another blunder was the fact that a gulf front island means a demand for seafood, not beef. To survive, Outback would have to change their menu, name and probably act more like a quaint independent than a cookie cutter chain. Big companies don’t do this very well except when looking for acquisitions and new concepts that someone else has successfully developed.

It is not particularly pleasant to be right about the prediction of this closure. It is always sad to see people lose their jobs. However, maybe the lessons from Outback’s errors can give entrepreneurs cause for taking a better look at their location and escape a similar fate.

When doing research for opening, planning and operating your restaurant, consider The Restaurant Ebook your guide to increasing the odds of survival.

Larry Edger, Author

The Restaurant Ebook

On a recent trip to Naples, Florida, I was again reminded that location is everything - well almost everything. It is clear that great food can’t cover up a bad location, but why doesn’t good food make it in a great location?

One of my favorite restaurants and watering holes in Naples is the Riverwalk Restaurant. The location is next to the somewhat famous Tin City and along a busy waterfront. Immediately next to the Riverwalk was another restaurant called Pier 41. The Riverwalk was always extremely busy; Pier 41 struggled for many years. They were within 20 feet of each other. Pier 41 was clean, had a reasonable menu and even had better access than Riverwalk. They never could quite be as popular.

On this trip I was pleased to see that a new restaurant with a completely re-juvenated concept had replaced Pier 41. Not only had I noticed, but it was clear from the wait at the door and full tables, the population of Naples had embraced this new concept. It was also apparent that the restaurant didn’t go through any extensive changes to the facility. Why did this new seafood concept work and the old seafood menu fail? I was determined to find out.

Before visiting the new restaurant called Pinchers, I talked with some of the long-term staff at Riverwalk to get their opinions and then ventured a few feet out of the Riverwalk and entered Pinchers. After a few minutes the differences were clear.

• The new restaurant had a more casual feel with staff in polo shirts and shorts. No more white shirts.
• The menu was pricey, but not unlike similar Naples waterfront restaurants. What the menu did have was an abundance of seafood items that neither the Riverwalk or the old concept had. They found a niche of local fresh items that tourists and locals would enjoy.
• The staff was well chosen and more outgoing. The old restaurant had a feel of competence, but lacked that enthusiasm of the new one.
• It was clear that Pinchers understood the demographics of their customer base than the old concept. Many customers went back and forth between the Riverwalk and Pinchers just during my time at the locations. The customers were portable and interchangeable!

The new restaurant had to go no further that 20 or 30 feet to figure out how to become successful. Look at the strengths a long time community favorite, the Riverwalk, capitalized on and re-invent them at Pinchers while offering menu alternatives. The old concept had a slightly more upscale approach to both atmosphere and menu. Apparently, people wanted less formality in a waterfront location. It was clear that atmosphere, menu and customer service will combine to make this new venture a success.

Location is critical, but you can’t forget the customer’s expectations - you have to meet them or exceed them in a robust competitive location.

Larry Edger, Author

The Restaurant Ebook