Restaurant Concept Development: 7 Questions Before You Sign a Lease

Restaurant concept development is the work of deciding who your restaurant is for, what occasion it serves and whether the whole thing can pay for itself. It happens before the lease because after the lease every mistake has a monthly price. A concept is cheap to change on paper, affordable to change in a pop-up and expensive to change in a built room.

Here are seven questions, in the order that tends to expose weak ideas fastest. Answer each in writing. If you cannot answer one in two sentences, that is where to work next.

1. Who exactly is the guest?

The guest is a specific person in a specific situation, which rules out a demographic label or "everyone who likes good food". The US Small Business Administration puts it plainly: be specific when you name your target market, because your business will not serve everyone.

Write a short portrait. How old is this person, where do they live and work, how often do they eat out, and what do they spend? Then add the part most plans skip: what else could they do with the same evening and money?

A useful test: can you picture three real people you know who fit? If you cannot, the guest is an abstraction.

2. Which occasion are you serving?

An occasion is the reason a guest walks in: a quick lunch, a first date, a family celebration, a drink after work, a Sunday that goes on for hours. The same person wants different things on different occasions.

Pick one main occasion and one supporting one. A restaurant that tries to serve a fast lunch, a business dinner and a late-night crowd with one menu and one room usually does none of them well. The occasion decides the hours, the seating, the speed of service, the music and the price.

Occasions also decide the hours when you earn. If your main occasion falls on two evenings a week, the rent still arrives for seven days.

3. What is the one thing you do better, and what will you not do?

Your difference should be a single idea the guest can repeat to a friend, plus a short list of things you refuse to do. The refusals matter as much as the claim.

SBA recommends mapping competitors by product, segment and strengths and weaknesses, including indirect ones. Do that, then look for the gap that a real group of guests would cross town for. It might be an ingredient, a region, a way of serving or a level of warmth. Aim for clear, not dramatic.

Then write the "not" list: no delivery, no tasting menu, no brunch, no large parties. Each refusal makes the concept easier to cook, staff and explain.

4. Do the economics fit the concept?

Test the numbers at concept stage by working out the sales your format can realistically produce and comparing them with the costs it carries. Do this with a short calculation, not a spreadsheet.

1. Seats multiplied by realistic turns per service.
2. Multiplied by average spend per guest.
3. Multiplied by the services and days you will trade.
4. Compare the result with rent, labour and the cost of food and drink.

Use cautious occupancy, not your best night. If the concept only works at full rooms, it is a fragile concept. Either raise the average spend, cut the fixed costs, add a second occasion or choose a different site. The reasoning behind each line is covered in restaurant business plan.

A concept is a promise made to the guest, to the kitchen and to the landlord, and all three have to be kept on the same night.

5. Can the kitchen deliver it at peak?

A menu is a production plan. Work out whether the kitchen you can afford can produce it during the busiest hour without losing quality.

For each dish, note the station, the equipment and the time it takes. Then add them up for a full dining room ordering within twenty minutes. Where the plan jams, simplify the menu or change the kitchen. A short menu with dishes that share ingredients is easier to buy, cook, train and cost.

Check that the room matches the kitchen. A 60-seat room needs a pass and a team that can feed 60 at once.

6. Can you hire and keep the team it needs?

A concept that depends on rare skills needs a plan for finding and keeping them. Decide what the team must be able to do, and test that your location, pay and schedule can attract them.

The National Restaurant Association reports that about 9 in 10 US restaurants have fewer than 50 employees and about 7 in 10 are single-unit operations. Small teams mean each person carries more of the concept. Ask yourself who your head chef and your front-of-house lead would be, what they would earn and how they would grow. If the concept needs a chef you cannot afford, that is a concept problem, so fix it in the concept.

7. What would make you walk away?

Write down in advance the conditions under which you will not sign. This is the most useful question and the least often asked.

Examples worth writing down:

• Permitted use is not confirmed in writing for your service style.
• Works cost more than a stated limit after a contractor's quote.
• Pop-up results show guests will not pay the price you need.
• The cash reserve falls below the number you set.

Walk-away conditions turn a hopeful plan into a decision. They also protect you from the sunk-cost feeling that grows with every meeting and drawing.

What does a failed answer look like, and how do you test it?

A failed answer is one you cannot say aloud without hedging. Suppose a founder says the guest is "young professionals and families and tourists". That is three guests, three occasions and three price expectations. The room cannot be quiet and lively at once, and the menu cannot be fast and slow.

The fix is to choose. Pick the guest who will come most often, serve their main occasion well, and let the others come when they fit. Many successful rooms are quietly popular with groups they never planned for, but they were designed for one.

Do the same with price. If the concept needs a high average spend, ask who spends that much, how often, and what they get elsewhere for it. Price is part of the concept, not a number added afterwards.

How do you test the concept cheaply?

Test it by selling it. A pop-up, supper club or residency in an existing kitchen lets you charge strangers, cook the real menu and time the real service without a lease. Record what sold, what came back, how long dishes took and who asked to return.

Compare the results with your answers above. Where they disagree, trust the results.

If the concept passes, the next step is the plan. If it fails, you have spent a few evenings and not a deposit, which is a good trade. The reasons concepts fail after opening are covered in why restaurants fail.

Key takeaways

• Define the guest as a specific person and the occasion as a specific reason to visit.
• Pick one difference the guest can repeat, and write a list of things you will not do.
• Check the economics at cautious occupancy before you fall for a room.
• Design the menu around what the kitchen can produce at peak.
• Make sure the team the concept needs is findable and affordable.
• Write walk-away conditions before you start negotiating, and test the concept with paying strangers.