Location Thoughts

[jlat]

Hey folks,

Long time lurker, first time poster...

..been moving towards opening my shop. Wanted to throw out my latest (one of many) location finds to see if there is anything I am missing. I really like this spot as it is in a very fast growing residential area. (top 10 in the country). This is a brand new strip, that is coming online later in the year. It will have a Bank (BofA), Wallgreens and MickyD''s in the parking lot. It will be anchored by a large grocery chain. Other tenents include Quiznos, a Pizza spot, a take out Chinese spot, A large medical clinic, hair salon, nails salon and a gym. Also it will have a Just Fresh restaraunt. This area does not currently have that many eating places about, so this really does increase the numbers. The strip is located on a intersection, with good ingress and egress, and is on the \"going to work\" side of the road. The traffic numbers are excellent and will continue to grow. The supporting neighborhoods run in the $200k-$1mil range. There''s another coffee shop across the street, but quite frankly the coffee there is bad and the staff poorly trained so I don''t know how much longer they will be around. No chain shops as of yet. To me the big concerns are the McD''s and the Just Fresh. We would be right next to the Just Fresh, however they are not open until lunchtime and carry only a small coffee & baked good menu. My concept includes free Wifi and night time activities like live music and such.

Any glaring issues that I might have overlooked? Is there too much other stuff in this strip to be able to stand out? Any one currently doing business right next to a restaurant?

Any advice would be greatly appreciated.

John

 

[Jackson]

The first three questions would be; what is the size of the available space, how much is the rent, and what is the traffic count? Walgreen's is a fairly nice anchor store and being close to an affluent neighborhood really helps. Sometimes landlords will over inflate the value of their property based on future growth. That future growth may be helpful in a few years but the high rent may suffocate you in the meantime.

 

[jlat]

Thanks Jackson,

The site size is 1500 sq ft @ $25 psf + CAM. (Its pricey, but in line with other spots in the general vicintiy.) The numbers work in my model using .090% on the traffic count. Also, it is an end unit with a patio for outdoor seating (brand new yet to be built so I can get the raw shell). Traffic is 16k avg per day through the intersection (per DOT), and is going up as more residential development comes in. There will be some offices coming up shortly as well. Wallgreens is a good draw as are the other tenants like the hair and nail, the gym, the dry cleaners and the medical clinic. The concern is McD's and Just Fresh. McD's will be the only one's open in the AM the same as our sweet spot.

John

 

[cherylann324]

Hi jlat!

I don't think McD's is a problem for you!! I pass McD's all over the place to get to a good cup of coffee!! Sometimes I get a McMuffin and then go get my coffee at the coffee shop on the way.

Will you have a drive-thru?

Numbers so far are looking good for you.

Cheryl Ann

 

[jlat]

Unfortunately no drive thru. The property owner is only allowing 3 (McD's BofA and Wallgreens). I think it is a still a good location. Being right next to a restaraunt that also has various coffees on their menu, is a little bit of a concern. Going head to head with McD's is as well since people will have to get out of the car and come in. Once they do that though, they will be really glad they did. A report just came out yesterday that put us in the 15 fastest growing counties in the country, and this location is in the epicenter of that growth. I think that there is enough business to go around. (At least that's my hope) :wink:

John

 

[Jackson]

Without seeing the site, $3125 per month seems a bit high for only 16k of traffic passing by each day. $25 per square foot rent for the relatively low traffic count is a bit high for a coffee house. If the space was only 1000 square feet, it would be more feasible.
The next question you need to ask yourself is, how many times per day can you fill each chair or table with customers?

 

[jlat]

I agree it is pricey, but it is a great area and the upside is the growth isn't going to slow down any time soon. We have a very pro-developer government in the county (bought and paid for by the devleoper community). Lots of ugly green farm space that will be soon churned into beautiful 1/4 track houses. A 1000sqft makes for an awfully small space and we want to be more of a community gathering spot, vs a grab-a-joe to-go type place.

Other points that contribute is that it is only 10 minutes from my house and is in my kids school district. Makes things nice when you want to contribute to the community.

We ate at a Just Fresh tonight to check it out. There "coffees" are dispensed either from airpots or from a self serve machine. They do offer free Wifi and have a breakfast menu. These are our biggest concerns at this point. We weren't expecting them to have a breakfast menu or online. The food is just okay at best, and the atmosphere is more like a McD's than anything really unique, but since there isn't a big variety in the area yet, there will be a good crowd at this new store. I think we can draw off that crowd.

 

[Coffee Guy]

Hey jlat:

It's good that you checked out "Just Fresh" (the competition). That is one of the first things one must do in the beginning phases. Now you know a little about what you are up against. Don't be too concerned with Mc D's, their market it totally different than the one you are catering to. And I agree, that rent sounds pretty steep for what you are hoping to achieve. Since the land lord has three large tennants already, maybe they will cut you a better deal. Even if you have unlimited funds to ride things out, I would try to negotiate a little bit. If the land lord is stuck on those numbers, then maybe this spot may not be for you. It does sound like a nice location especially being located near your home & schools.

Since this is such a new development, have there been any discussions about larger coffee chains maybe wanting to come in like Starbucks, etc.?

 

[jlat]

Thanks CoffeeGuy,
I will definitely try for lower rent. They actually have quite a few large ticket tenants so maybe they will cut me some slack. If not, I haven't signed up for anything. I think after they see what I want for exclusions, they may also balk. With the exception of the Chinese spot and the Dry Cleaners, (and they very will could be multiple shops for both owners) everything else is basically some type of chain. I don't know how many landlords will take a chance on an independent opening a brand new store. So my application may get rejected anyway.

We'll see a SBUX some where, I am sure. There's another center going up on the opposite corner from this one. It will have a Target and a lot of those have lease SBUX. I hope that they do that, as those are typically very badly run shops, since the employees are not true SBUX associates.
A brand new SBUX with a drivethru under construction, stopped me from going for another spot in a strip adjacent to a high school.

Thanks for all the tips, please keep em coming as it gives me more and more to think about.