Strategy02/15/2026
Location Selection & Site Evaluation
Wrong location = failure from day one
3 Days × 3 Slots Foot Traffic Survey500m-2km Service Radius70% Failures Linked to LocationCheck Infrastructure Before Signing
Location is the single most important and hardest-to-change decision in F&B. You can fix a bad menu, retrain staff, redesign your brand — but you can't move your shop without starting over. Research consistently shows that roughly 70% of F&B failures are linked to poor location choices. Invest serious time upfront; it will save you hundreds of millions later.
Foot Traffic Counting Method
calendar
3 Different Days
Survey Duration
Count on 2 weekdays + 1 weekend day. Traffic patterns vary significantly — Friday evening ≠ Tuesday morning.
3 Per Day
Time Slots
Morning (7-9am), lunch (11am-1pm), evening (5-8pm). Each slot reveals different customer segments and volume.
3-8%
Expected Conversion Rate
Of total foot traffic passing your location, only 3-8% will enter. Higher for coffee (impulse), lower for restaurants (planned).
From Break-Even
Minimum Customers
Use your break-even calculation to determine the minimum daily customers needed. Does the foot traffic × conversion rate meet this number?
Site Evaluation Checklist
VisibilityCriticalCan pedestrians and drivers see your storefront from 20+ meters away? Corner lots and ground-floor units with wide frontage are ideal.
Accessibility & ParkingCriticalEasy motorbike parking for 10-15 bikes minimum. Car parking nearby is a bonus. One-way streets or median barriers can cut traffic by 50%.
Electrical Capacity15-20 kWAC, kitchen equipment, lighting all add up fast. Check the meter capacity BEFORE signing. Upgrading electrical costs VND 20-50M+ and takes weeks.
Water & DrainageMust VerifyAdequate water pressure for kitchen operations. Grease trap installation possible. Check for drainage issues during rainy season.
Competition DensitySurvey 500m RadiusSome competition is good (proves demand). Too much = price wars. Ideal: 2-3 similar concepts nearby, not 10.
Zoning & Legal StatusMust VerifyConfirm the property is zoned for food service. Check for pending demolition orders, road-widening plans, or construction projects that could disrupt business.
6 Golden Rules for Location Selection
- >Road type matters: Main roads bring visibility but higher rent. Alley locations (hem) cost 50-70% less but depend entirely on local foot traffic and delivery. Match your concept to your road.
- >Visibility is non-negotiable: If people can't see you, they can't find you. Avoid basement units, upper floors (unless destination dining), or locations hidden behind trees and signs.
- >Accessibility decides impulse traffic: How easy is it to pull over, park, and walk in? A great location on a road with a median barrier loses 40-50% of potential customers who can't make a U-turn.
- >Population centers within 500m-2km: Map out nearby offices, schools, residential buildings, and markets. Your core customers live or work within a 10-minute walk or 5-minute drive.
- >Future development is your friend (or enemy): A new apartment complex nearby = more customers in 12 months. A highway construction project = 6 months of dust and blocked access. Check with local authorities.
- >Rent must stay under 15% of projected revenue: This is the hard ceiling. If rent is VND 30M/month, you need VND 200M+/month in revenue to be healthy. If the math doesn't work, the location doesn't work — no matter how "perfect" it seems.
Location Deal-Breakers
Property zoned for demolition or road widening
Check with the local ward office (UBND phuong) for planning documents. Signing a 3-year lease on a property scheduled for demolition in 18 months = total loss.
Insufficient electrical or water infrastructure
A location that can only support 5kW when you need 15kW means no AC, no commercial kitchen equipment. Upgrading is expensive, slow, and sometimes impossible in older buildings.
Flooding history
Ask neighbors about flooding during rainy season. One flood can destroy VND 100M+ in equipment and inventory, plus weeks of lost revenue. Check drainage and elevation.
Excessive deposit demands
Standard is 2-3 months deposit. If the landlord demands 6-12 months upfront, it ties up capital you need for operations. Also a red flag about the landlord's financial situation.
High tenant turnover
If the previous 3 tenants all failed within a year, the location has a structural problem — not bad luck. Talk to former tenants if possible. Their experience is invaluable.
Invest 2-4 weeks in thorough site evaluation before signing any lease. Visit at different times of day, talk to neighboring businesses, count foot traffic, verify infrastructure, and check legal status. This small investment of time can prevent the single most expensive mistake in F&B — choosing the wrong location.
More in Strategy
Found this useful? Share with friends!
Help more F&B owners discover this free tool.