Milwaukee, Cincinnati and Minneapolis Are the Most Promising Places to Open a Restaurant
CHARLOTTE, N.C., Oct. 24, 2018 /PRNewswire/ -- LendingTree®, the nation's leading online loan marketplace, today released its study on the best cities to open a restaurant. The study found that while traditional foodie destinations like New York and San Francisco are saturated with restaurants, up-and-comers have room to grow. The restaurant population in cities like Milwaukee, Cincinnati and Minneapolis cities is less dense than in other areas, and labor costs are lower.
LendingTree analyzed the 50 largest U.S. cities to see which offer prospective restaurateurs the best shot at success. Many top spots are in once-overlooked Midwestern cities now experiencing urban renewal. The least promising cities have historically been the restaurant industry's most competitive.
To find out where prospective restaurant owners may have a better chance at succeeding, LendingTree looked at four factors within the 50 largest metros in America:
-- Average estimated annual revenue. Using the reported monthly deposits of
more than 5,400 restaurant owners who sought loans on the SnapCap by
LendingTree business loan platform, researchers estimated their annual
revenues and adjusted them based on prices in their particular city.
-- Estimated payroll costs per employee. To get a sense of where labor
costs may have a smaller impact on restaurants, the study looked at
total annual payroll and employees for restaurants in each metro, as
reported in the County Business Patterns survey from the U.S. Census
Bureau to calculate the average annual cost per employed person.
-- Number of restaurants per 100,000 households with incomes of $50,000 or
more. These households spend the most on eating out, according to the
Bureau of Labor Statistics, but some metros may be underserving these
households eager for new restaurant choices.
-- Number of restaurants per 100,000 residents aged 35-54. Gen Xers have a
greater appetite for restaurant spending than millennials or baby
boomers, according to the same BLS survey. This may present an
opportunity for cities dominated by this generation with relatively few
restaurants.
Opportunity is ripe in 'flyover country'
1. Milwaukee
Final score: 82.5
Milwaukee ranked highest in the study, earning a score of 82.5. There are 709 restaurants per 100,000 households with an income of $50,000 or more. Among residents between the ages of 35 and 54 - the age group that spends the most on dining out - there are 591 restaurants per 100,000 people.
2. Cincinnati
Final score: 78.4
While Cincinnati's restaurant scene is prosperous, the majority of eateries in the city are chain establishments. Residents tend to prefer independent restaurants, creating a prime opening for prospective local restaurateurs.
3. Minneapolis
Final score: 77.4
Ranking No. 3 in the study, Minneapolis has even fewer restaurants among the designated demographics. There are 629 establishments per 100,000 households with $50,000 or more in income, and 574 restaurants per 100,000 residents between the ages of 35 and 54 years old.
Entrepreneurs face challenges in culinary capitals
The lowest-ranking metros are cities with world-renowned restaurant scenes. The local restaurant industry is overcrowded in these places, making it difficult for new restaurant owners to be successful.
50. New York
Final score: 17.3
New York ranked last at No. 50, earning a score of 17.3. The adjusted median revenue is relatively low, $224,640, and payroll costs are high at an average annual payroll per employee of $22,581. There are 993 restaurants per 100,000 households with incomes of $50,000 and 791 establishments per 100,000 residents between the ages of 35 and 54.
49. San Francisco
Final score: 24.8
San Francisco, in the No. 49 spot, is about as equally dense but restaurants in the area rake in more money. The normalized median revenue for restaurants in the city is $361,440, but the average annual employee payroll is $23,325, which means even higher labor expenses than New York.
48. New Orleans
Final score: 32.3
The third least promising place to open a restaurant is New Orleans. Though far smaller by population compared with New York and San Francisco, the Southern city has more a competitive restaurant scene. There are 1,069 eateries per 100,000 households with $50,000 in income, and 759 restaurants per 100,000 residents between the ages of 35 and 54.
To view the full report, visit www.lendingtree.com/business/best-places-to-open-a-restaurant.
Rank
Metro Final Score Est. Median Revs, RPP Avg. Annual Payroll per Establishments per 100K Households w Establishments per 100K Residents Aged
Normalized Employee $50K+ Income 35-54
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1
Milwaukee 82.5 $350,784 $14,510 709 591
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2
Cincinnati 78.4 $370,944 $14,813 757 613
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3
Minneapolis 77.4 $293,100 $17,094 629 574
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4
Louisville, Ky. 76.3 $360,000 $14,979 794 600
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5
Raleigh, N.C. 75.3 $356,022 $15,396 786 600
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6
Riverside, Calif. 71.8 $377,808 $17,675 847 544
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7
Kansas City, Mo. 70.7 $255,120 $16,489 709 588
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8
Hartford, Conn. 70.2 $472,800 $18,119 748 685
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9
Richmond, Va. 69.1 $299,232 $15,221 781 634
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10
St. Louis 68.7 $275,184 $15,381 757 630
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11
Austin, Texas 68.3 $408,000 $18,281 785 627
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12
Memphis, Tenn. 67.8 $143,880 $14,696 790 540
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13
Houston 66 $283,392 $17,462 793 578
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14
Phoenix 65 $209,916 $17,014 759 568
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15
Charlotte, N.C. 63.7 $217,260 $15,237 844 591
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16
Baltimore 63.2 $222,720 $17,602 690 624
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17
Salt Lake City 62.7 $307,836 $15,946 827 661
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18
Columbus, Ohio 62 $166,920 $15,575 768 610
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19
Tampa, Fla. 61.9 $180,360 $16,785 783 573
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20
Pittsburgh 61.7 $228,312 $14,673 777 684
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21
Detroit 61.4 $124,920 $15,296 775 589
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22
Philadelphia 60.2 $237,132 $16,608 777 646
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23
Indianapolis 59.6 $205,824 $15,434 836 628
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24
Atlanta 58.7 $223,992 $16,183 866 609
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25
Denver 57.7 $327,120 $18,993 773 669
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26
San Antonio 57.1 $202,752 $16,472 859 606
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27
Birmingham, Ala. 56.2 $106,752 $15,771 815 593
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28
Chicago 55.5 $277,056 $18,497 813 645
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29
Jacksonville, Fla. 55.3 $225,072 $15,694 883 653
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30
Washington 55 $174,744 $19,517 678 626
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31
Sacramento, Calif. 54.5 $258,720 $17,475 824 668
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32
Nashville, Tenn. 52.7 $253,440 $17,215 873 662
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33
Cleveland 50.1 $118,584 $15,166 841 673
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34
San Jose, Calif. 49.9 $437,400 $21,724 842 711
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35
Dallas 49.8 $131,736 $17,399 835 619
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36
Virginia Beach, Va. 48.5 $245,040 $15,128 894 757
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37
Oklahoma City 47.6 $156,096 $14,743 900 706
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38
Las Vegas 46.7 $355,656 $20,250 963 653
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39
Orlando, Fla. 45.4 $244,800 $17,726 998 641
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40
San Diego 43.9 $366,606 $19,972 914 733
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41
Buffalo, N.Y. 42.1 $152,064 $16,309 869 735
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42
Miami 41.2 $194,040 $18,892 991 617
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43
Seattle 39.1 $343,680 $21,851 842 757
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44
Los Angeles 38.7 $355,536 $19,634 1036 717
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45
Portland, Ore. 38.4 $271,308 $19,125 916 748
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46
Boston 37 $288,036 $20,570 844 777
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47
Providence, R.I. 32.9 $252,756 $17,781 982 797
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48
New Orleans 32.3 $251,520 $17,426 1069 759
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49
San Francisco 24.8 $361,440 $23,325 938 823
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50
New York 17.3 $224,640 $22,581 993 791
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About LendingTree
LendingTree (NASDAQ: TREE) is the nation's leading online marketplace that connects consumers with the choices they need to be confident in their financial decisions. LendingTree empowers consumers to shop for financial services the same way they would shop for airline tickets or hotel stays, comparing multiple offers from a nationwide network of over 500 partners in one simple search, and can choose the option that best fits their financial needs. Services include mortgage loans, mortgage refinances, auto loans, personal loans, business loans, student refinances, credit cards and more. Through the My LendingTree platform, consumers receive free credit scores, credit monitoring and recommendations to improve credit health. My LendingTree proactively compares consumers' credit accounts against offers on our network, and notifies consumers when there is an opportunity to save money. In short, LendingTree's purpose is to help simplify financial decisions for life's meaningful moments through choice, education and support. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information, go to www.lendingtree.com, dial 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree.
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SOURCE LendingTree
