How to Write a Food Hall Business Plan
The Food Hall industry is a growing trend for several reasons. First, based on research from our business plan writer, the food hall industry has become popular because customers increasingly want a wide selection of dining opportunities in a specific location.
In other words, customers often really don’t know what they want to eat. So, by having several dining options in a confined area, customers can select whatever best appeals to them at that specific point in time.
A second reason that food halls have become popular is that different people in a group may want different items. One person might be craving Chinese food, whereas a second person would like a quick-service Italian item. A food hall is an excellent opportunity to meet these needs for the customer.
A final reason that food halls have become popular is that customers can have dinner and drinks at the same location. To illustrate, a couple may enjoy a fine dining experience at one location within the food hall and then casually meander over to a separate bar entity or even dessert location.
Because of the enormous popularity of food halls, our business plan writer has created tips and tricks for writing a food hall business plan.
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Executive Summary for a Food Hall Business Plan.
In the executive summary section of the food hall business plan, make sure to first discuss what type of business your organization will be. Some food halls may look to offer differentiated dining opportunities. For example, the food hall may seek to offer to lease to a Gyro establishment, pizza parlor, and ice cream shop. By doing this, the fast-food theme is embraced, while a wide selection of dining opportunities is still offered. Another common strategy is to offer casual dining opportunities. In following this structure, the food hall owner may then seek out a barbecue establishment, steakhouse, or casual dining Italian restaurant themed companies.
Once this strategy is outlined, then the executive summary should briefly explain other aspects of the business like it’s competitive advantages and financial highlights.
Company Information for a Food Hall Business Plan.
The company information section of a food hall business plan should start with explaining the problem that the company will solve for the client. There are numerous problems that a food hall organization solves. Probably the most important problem would be that customers demand a wide selection of dining choices in a confined area. The food hall solves this by leasing only to restaurants and ensuring a wide selection of locations. Our business plan writer has found that discussing and examining the main problem that the food hall organization will solve helps focus a company’s resources on best mitigating this issue.
Product Description for a Food Hall Business Plan.
Food hall businesses generate revenues from leases for the most part. A food hall may contain five or more dining opportunities, based on research from our business plan writer. Each one of these facilities would pay lease payments to the food hall owner. Another revenue-generating opportunity for the food hall owner would be to utilize one of the spaces for their own restaurant concepts. A food homeowner would not only be able to choose a choice dining opportunity but they may also utilize additional space to exploit gaps in services. An example of this will be to start a coffee shop in one of the locations if other tenants focus on fast food items.
Competitive Advantages for a Food Hall Business Plan.
The food hall industry has been growing substantially over the last several years, thanks to customers growing and changing needs. As our society continually seeks out more and more convenience items, food halls will become more popular. From this, competitive advantages for food hall may include diverse menu offerings, community life events, and lower advertising needs for leasees due to the food hall word-of-mouth popularity.
Location Description for a Food Hall Business Plan
The location for a new food hall facility is critical for the success of the business. For the interior of the business, food halls should have space for at least five outlets. In most cases, food halls should have leasing opportunities for 10 or more restaurants. By doing this, our business plan writer has found that diversity helps to generate word-of-mouth buzz. Further, a food hall location should have a common area that is serviced by the owner. In this common area, live bands may play, communal dining opportunities may be found, and Internet access should be provided.
As for the general location of the food hall facility, our business plan writer has found that these types of businesses do well in locations near downtown gatherings. Small towns have become increasingly popular due to booming downtown areas. In these downtown areas, businesses start bars, mom-and-pop restaurants, and antique shopping opportunities. These draws are excellent opportunities for a food hall to exploit. Not only can a food hall establishment offer dining opportunities to shoppers, but it may also bring in new investments to small-town areas.
Target Market for a Food Hall Business Plan.
A common misconception for a food hall target market is that the actual target market is the dining customer. This cannot be further from the truth. The actual target market for food hall owner is different potential restaurant owners. By catering to this market, the food hall owner can build and design their food hall to best accommodate the needs of restaurant owners. From this, the restaurant owners can then have their target market as the actual customers.
Industry research for a Food Hall Business Plan
Based on quick research from our business plan writer, the main industry in which food hall competitors to compete in the foodservice industry. The food service industry has generated over $900 billion in the last year alone. As for the food hall industry, in the next 12 months, over 200 new food halls are expected to open their doors. These food halls will be opening across the country in states like New York, California, Texas, and even Florida. Square footage for food halls range from 10,000 ft.² to over 30,000 ft.². Popular amenities for food halls are common areas for dining, live band opportunities, and spacious parking.
Owner and Management Section of a Food Hall Business Plan
Owning and managing a food hall business is quite different from other organizations. This is because owners not only need a background in restaurant management but also in property leasing management. The restaurant background is needed because food hall owners must build and design their facility to appeal to restaurant owners. To do this, having a well-grounded understanding of the restaurant industry is needed. As for property management, this experience is needed because food hall owners will be dealing with tenants. This means collecting rent, evictions, and keeping a property well maintained.
In addition, restaurant management experience comes in handy when a food hall business owner wishes to retain space for their own restaurant location. This practice is a bit tricky because not only are you a restaurant owner but you’re also a landlord to your competitors. Some potential tenants may find this practice a conflict of interest. To mitigate this problem, business owners should not only be transparent in their future activities but also conduct their restaurant operations in an ethical manner based on their unique position (10/21).
Funding Request for a Food Hall Business Plan
Starting in the food hall business is actually quite expensive. Business owners need to build and design the food hall to appeal to customers and business owners. Further, specific aspects, such as vent systems and grease traps, would be an excellent competitive advantage for a food hall business owner. From this, funding needed to start this type of business may range from $250,000 to over a million dollars. This leads to the need for a well defined and detailed funding request section in the business plan, based on research for business plan writer.
Financials for a Food Hall Business Plan.
Financial projections and financial models for a food hall business plan should first start with assumptions for the food hall. Assumptions should be based on the number of tenants that will occupy the food hall once the doors are opened, and the expected rent amounts for each tenant. Once your assumptions are set, then determine your cost for the food hall. Common cost may include property maintenance and electric and other utilities for common areas. Finally, always make sure to include payments for any loans that are taken for construction or operating capital.
Hopefully, these insightful tips and tricks for writing a business plan were helpful. As always, if you need help with a business plan or financial projections, just send us an email or give us a call.
Author: Paul Borosky, Doctoral Candidate, MBA., Author