Location Selection for Pizzerias | Replicating a Unicorn

The nitty gritty of location selection for an existing pizzeria

Your first restaurant is a success. Products are high quality and consistent. Numbers are profitable and rising. Operations and systems are dialed in. Your team is on point and requires less direct oversight. It’s the unicorn that every first-time restaurant owner dreams of.

But now it is time to multiply that unicorn – not an easy task. Operators often say opening the second and third locations are more challenging than store seven or store 20.

Sure, we can provide you with a checklist (see sidebar below) to help with the basics of restaurant location selection. But finding locations to grow your existing business is much more nuanced. Getting perspective from owners who have been deep in the trenches of growing their concepts to multiple locations reveals there is more than common factors at play to successful expansion.

Growing Virginia-based Benny’s Pizza to 33 locations

Co-owners Zach Toth and Chris Brown never envisioned operating multiple locations when they opened their first Benny’s Pizza in Blacksburg, Virginia, in 2011. Today, Benny’s has expanded to 33 locations in North Carolina, South Carolina, Pennsylvania, Virginia and West Virginia. With three more locations in the works, they are not stopping. Benny’s was founded on securing one specific downtown location the pair had their eyes on. “The entire business plan is set on that building,” says Toth, explaining that they were persistent in negotiating with the landlord on the building, which wasn’t even available at the time.

Los Angeles-based Prime Pizza expands to seven locations with second-generation spaces

Like Benny’s Pizza, Los Angeles-based Prime Pizza also began in a lively urban spot, settling into the Fairfax District in 2014. The location was bustling, in its 850-square-foot, second-generation space. Prime Pizza now has seven locations sprinkled around Los Angeles, with growth plans into neighboring Orange County.

“In the beginning, you have no idea what the growth is going to be,” co-owner Zak Fishman says of Prime Pizza. “You can’t conceive of how busy you are going to one day get. … And with success comes growth, and with growth comes a need for more space.”   

Benny’s Pizza & Prime Pizza | Different Approaches to Location Selection

Benny’s Pizza and Prime Pizza grew from one independent pizzeria with different approaches to selecting locations.

Before you start looking for spaces, you need to know exactly what your concept is, your primary market(s), key team members for growth, critical assessment of strengths and weaknesses of your current location, the makeup of an ideal location and new location financial analysis.

Toth and Brown focused on opening Benny’s stores within a three-hour drive radius to ensure personal oversight. They emphasized the importance of downtown locations with high foot traffic.

Fishman, too, looks for high-traffic areas concentrated in the greater Los Angeles area. He prioritizes locations with good visibility, exposure and parking availability.

Other Factors at Play in Location Selection for Pizzerias

Every pizza company has specifics that require forethought when opening a new location. For Fishman, that means at least 400 amps of electrical capacity to handle the pizzeria’s electric ovens. It’s a costly upgrade that can increase buildout costs.

Instincts are often a factor. Getting a feel for a neighborhood can be as important as pulling demographic data. Fishman cited Prime Pizza’s Altadena as a great example. “You would never guess that Altadena would be a strong store if you looked at the demographics on paper,” Fishman says. “It’s a really small town. It’s somewhat isolated. It’s not super close to the freeway. It’s surrounded by residential. There’s almost no business corridor right there at all. But Altadena is our No. 2 store.” When Fishman doesn’t have first-hand knowledge of an area, he leans on people who do know the neighborhood.

Brown agrees. “You can look at metrics on Google or Wikipedia for population and (the Virginia Department of Transportation) traffic data,” he says. “That always helps, too. But you never really know until you spend some time there.”

Since Benny’s has spread far geographically, relationships with food providers, banks and landlords that can support growth have become even more vital. Multiple food distributors or new reps might be needed.

First-generation vs. second-generation Spaces to Grow a Pizza Business

The type of building they sought separates the two companies’ growth plans. In the highly competitive LA real estate market, Fishman says Prime Pizza has focused on transforming second-generation spaces. It’s a cheaper and quicker option, he says, noting that all seven locations are second-generation restaurants. Leasing existing restaurants, especially pizzerias, is a great move for small companies. He adds, “That’s how we were able to grow independently with cash from the business without taking significant investment.”

Toth and Brown have found that even their second-gen spaces turned into first-generation shops with amount of work required to realize their concept in a new location. Benny’s also is a mix of leased and purchased units. They are more focused on the desired building than its acquisition type.

Pizza Business  Growth Bigger Picture Mindset

For independents, taking a broader look at the business helps you hone growing locations. “Take your time and grow slowly, and make sure that you focus on the store-level economics. … You’re going to need capital, eventually, right? And in order to get capital, the most important thing that they’re going to look at is store level economics.

“Things can happen if you grow too quickly,” Fishman continues. “So go slowly. Make sure every store is a winner. Make sure that the unit economics are great, and you will have success down the line.”

Location Selection Factors Checklist

• Demographics: Ensure the area has a high concentration of your target customer base.
• Traffic patterns: Choose a location with heavy pedestrian and/or vehicular traffic.
• Visibility: Opt for spaces with good signage opportunities and street visibility.
• Accessibility: Confirm the site has easy access for both customers and delivery drivers.
• Competition: Evaluate the proximity of other pizza establishments in the area.
• Parking: Ensure there is ample parking for dine-in and takeout customers.
• Size and layout: Verify the space can accommodate dining, kitchen and storage needs.
• Cost: Analyze the rent, utilities and potential buildout costs to fit your budget.
• Zoning regulations: Check that the location is zoned for a restaurant.
• Market trends: Consider current and projected growth in the area for long-term potential.

Denise Greer is Executive Editor at Pizza Today.