LFTL: How to Select the Right Site for Your Restaurant
When restaurant owners talk about growth, the conversation usually turns to menus, labor, and marketing. But one of the most permanent and expensive decisions you’ll ever make happens before any of that: choosing the right location.
Site selection impacts everything from buildout costs and operating leverage to staffing challenges, guest traffic, and long-term exit value. Yet many operators approach real estate decisions reactively - responding to what’s available rather than what actually fits their concept, financial model, and growth goals.
In today’s market, understanding the trade-offs between first-generation and second-generation spaces, structuring the right landlord relationship, and using a real estate broker strategically (not passively) can be the difference between a location that supports profitability and one that quietly kills it.
To help unpack this, we’re joined by Jason Kastner, the Managing Director of National Advisory of Dochter & Alexander, to walk through what restaurant owners should be thinking about before they sign a lease - and how to avoid the most common (and costly) real estate mistakes.
Harmony: “Location, location, location” gets repeated a lot but what does that actually mean for restaurants today?
Jason: With my restaurant clients, before we ever talk about location, we start with customer, customer, customer!
Understanding who your customer is (both current and aspirational) and what they value provides a roadmap for where the brand can succeed. Once that profile is defined, you can identify trade areas nationwide that best align with it and maximize expansion opportunities.
A great address without the right customer is still the wrong location.
Harmony: Are there specific factors operators should prioritize beyond foot traffic or visibility when evaluating a site?
Jason: Absolutely - to identify sites that meet the right characteristics to predict success, there are two buckets: quantitative factors and qualitative factors.
Quantitative factors include demographics such as population, income, and food spend.
Qualitative factors include visibility, signage, co-tenancy, access, parking, and transit.
But in my experience, the single most important qualitative factor is positioning. Great visibility or abundant parking rarely compensates for being on the inferior block or in the weaker center compared to your competition.
Harmony: How should owners think about the decision between a first-generation space versus a second-generation (pre-owned) restaurant location? Are there real cost, timing, and risk trade-offs between building from scratch versus inheriting existing infrastructure and how do you prioritize?
Jason: Yes, there are meaningful trade-offs in cost, timing, and risk.
Second-generation spaces can save time and money if the infrastructure truly aligns with your concept (e.g. hood, grease trap, power, layout, etc.). When it works, it can significantly accelerate an opening.
On the other hand, the danger is assuming compatibility. Many operators end up spending heavily to undo somebody else’s design, at which point the “deal” disappears.
First-generation space offers a clean slate and maximum brand control, but it requires more capital and longer lead times.
The right answer all depends on how closely the bones match your prototype.
Harmony: In what situations does a second-generation space not make sense, even if it looks cheaper upfront?
Jason: When a restaurateur utters the phrase: “We can make it work!”
Do major elements need relocation? If so, costs rise fast, and timelines slip.
Why did the prior tenant fail? Perhaps it reflects site or layout challenges that new operators underestimate.
A cheap rent or a lower buildout never fixes a flawed location.
Harmony: What does a “good” landlord relationship actually look like for restaurant tenants?
Jason: A strategic landlord understands that they are selecting and partnering with an operator, not just signing a lease.
A good relationship includes clear communication, speed, and acting like long-term partners. The best relationships (in business and life!) feel collaborative rather than adversarial.
Harmony: How can restaurant owners best leverage a real estate broker instead of just relying on listings they’re shown?
Jason: Oftentimes, the best opportunities are not marketed.
A strong, connected broker brings access to off-market availability, understands which landlords will transact, and can shape a negotiation strategy based on real intelligence.
Beyond sourcing sites, brokers coordinate tours, manage timelines, benchmark economics, and help operators avoid costly mistakes.
Harmony: What should owners look for when choosing the right real estate broker for a restaurant deal? Are there specific experience gaps, market knowledge, or incentives that operators should be cautious about?
Jason: Market knowledge is critical, but so is credibility with landlords.
Restaurants are complicated! Operators should look for a broker who understands the complexities, including permitting timelines, construction realities, kitchen infrastructure, how restaurants make money, etc.
In my experience, operations should also have clear, aligned incentives with their broker because alignment creates real momentum.
Harmony: And a final question - For those who have never worked with a commercial broker or are nervous to start the conversation, can you share what business owners can expect when it comes to the cost of working with a commercial real estate broker.
Jason: This year marks 20 years for me in the business, and one of the clearest lessons I have learned is that selecting an exclusive broker is always in a brand’s best interest. It creates clarity, consistency, and leverage in the market, avoids mixed messaging, prevents duplicate outreach, and ensures negotiations are strategic rather than reactive.
And the best part: in retail leases, the broker is paid by the landlord upon a successful transaction!
If you’re considering a new space or reviewing a lease, we encourage you to talk with your Harmony team early in the process. A lease decision can have long-term financial and operational implications, and having the right eyes on it before you sign can make a meaningful difference.