Feasibility Studies
Restaurant Feasibility Study
A restaurant can be popular and still be economically weak. Before signing a lease, buying a franchise, expanding a concept or funding a new site, the investment case should show how the location, customer catchment, average check, covers, seat turnover, food cost, labour, rent and delivery mix work together at unit level.
A restaurant feasibility study tests that operating model before opening costs and lease commitments become difficult to reverse.
The decision the study should support
The central question is whether the proposed concept can generate enough contribution and store-level cash flow at realistic customer volumes and pricing to cover its fixed cost base and investment.
The decision may be to proceed with the proposed site, renegotiate rent, change the format, reduce capex, revise the menu and price architecture, resize the dining room, strengthen delivery economics, select another catchment or stop.
This analysis is useful for a first site, a multi-site rollout, a franchise evaluation, a weak existing unit, a food-hall or mall location, or an investor reviewing management's assumptions before committing capital.
Location, catchment and concept fit
Footfall is not demand. A feasibility study should identify who passes the site, who can realistically become a customer, why they would choose the concept, and at what frequency.
The catchment may include residents, office workers, tourists, hotel guests, destination diners, students or delivery customers. Each group has different dayparts, price sensitivity and repeat behaviour. The model should therefore connect the customer mix to breakfast, lunch, dinner, late-night and delivery demand rather than applying one average utilisation rate across the day.
Competition should be assessed by occasion and price point, not cuisine label alone. A casual restaurant can compete for the same lunch spend as a café, food-court operator or delivery-only brand. The study should compare menus, average spend, ratings and review themes where useful, opening hours, promotions, capacity and site characteristics.
Dubai's 2025 tourism data provide useful context for tourist-exposed concepts: DET reported 19.59 million international overnight visitors and hotel occupancy of 80.7% for the year. That does not validate a specific restaurant site; it is a reminder that tourism can be a material demand source in some catchments and should be separated from resident demand.
Average check, covers and seat turnover
Restaurant revenue can be decomposed into observable operating drivers. For dine-in, a basic model links seats, table mix, meal periods, utilisation, seat turnover and average check. For takeaway and delivery, it links order volumes, average basket, commissions, packaging and fulfilment costs.
Average check should be built from the proposed menu, product mix and expected attachment rates rather than a single optimistic number. The model should test the effect of discounting, promotions, VAT treatment where relevant, delivery pricing and menu engineering.
Seat turnover should reflect service style and actual time per dining occasion. A fast-casual concept and a destination dinner restaurant should not carry the same turnover assumptions. Peak-period capacity should also be constrained by kitchen throughput, not only table count.
Cost of goods, labour and rent-to-sales
Gross margin needs to be tested at recipe and category level where data are available. Food and beverage cost assumptions should reflect supplier quotations, waste, yield, complimentary items, staff meals, spoilage and the proposed mix of high- and low-margin products.
Labour should be built from the operating roster required to deliver the concept across opening hours. Management, kitchen, service, cleaning, delivery coordination and back-of-house functions should be included alongside recruitment, accommodation or transport costs where relevant to the operating model.
Occupancy cost should be assessed against sustainable sales, not only the landlord's asking rent. Base rent, turnover rent, service charges, utilities, fit-out contributions and lease incentives can materially change the breakeven point.
Delivery economics need their own model
Delivery can expand the addressable catchment but can also dilute margin. A feasibility study should separate dine-in, takeaway, own-channel delivery and aggregator orders.
Platform commission, promotional funding, packaging, refunds, prep time and delivery-specific menu pricing affect contribution. The kitchen must also have enough capacity to serve delivery demand without reducing dine-in service quality at peak periods.
Current UAE consumer-foodservice research published in March 2026 notes the continued importance of delivery and takeaway and a more value-conscious trading environment. Those market observations should be used to stress-test the concept, not as substitutes for site-level order data and competitor evidence.
Capex, working capital and breakeven
Restaurant capex should be tied to the proposed format and site condition. Fit-out, kitchen equipment, extraction, furniture, technology, smallwares, deposits, licences, professional fees and pre-opening costs need to be separated from recurring operating expenditure.
The model should include working capital for opening inventory, payroll, supplier terms, deposits and the ramp-up period. Breakeven should be expressed in both sales and operational terms: the covers, checks or orders required by daypart to cover fixed costs.
A downside case can test slower ramp-up, lower average check, higher food cost, weaker lunch trade, lower seat turnover or a less favourable delivery mix.
Speak with an adviser
Defined mandates on fixed fees, ongoing counsel on retainer, and customised scopes for complex requirements.
Methodology and evidence base
A restaurant feasibility study typically:
- defines the concept, format, site and investment decision;
- maps the catchment, customer segments and daypart demand;
- benchmarks competitors, pricing and proposition;
- builds dine-in, takeaway and delivery revenue drivers;
- models food cost, labour, occupancy and other operating expenses;
- establishes capex, pre-opening cost and working capital;
- calculates breakeven and store-level cash flow; and
- tests base, upside and downside scenarios.
Where an existing unit is available, actual sales mix, transaction data, labour schedules, food cost and delivery performance should take priority over generic industry benchmarks.
What the client receives
Depending on scope, outputs can include an executive decision memo, catchment and competitor assessment, site and concept assumptions, a unit-economics model, capex and working-capital schedule, breakeven analysis, scenarios and sensitivities, risk register and recommended next steps.
Go, revise or no-go
A go conclusion should identify the minimum customer volumes, average check, gross margin and occupancy-cost conditions required. A revise conclusion may change the site, seating, menu, price architecture, delivery strategy, capex or lease terms. A no-go conclusion should show which economics cannot be supported by the evidence.
The aim is to understand what the restaurant must achieve every day for the investment case to work.
Why EXMC
Evidence EXMC already publishes about its own work, used here only within its documented scope.
Representative examples published by EXMC. Client identities are generalised to maintain confidentiality. Published work does not by itself establish permission to perform activities that require specific regulatory authorisation.
Frequently asked questions
What does a restaurant feasibility study include?
It integrates site and catchment analysis, competition and concept positioning, pricing, average check, covers, seat turnover, delivery mix, food cost, labour, rent, capex, working capital, breakeven and downside scenarios.
How are location, catchment, competition and concept positioning assessed?
The analysis identifies the customer groups reachable from the site and the occasions for which the concept competes. It then benchmarks relevant alternatives by price, menu, format, trading hours, capacity and customer proposition rather than relying only on cuisine categories.
Which unit-economics assumptions should be tested before opening?
Average check, covers, seat turnover, food and beverage cost, labour, rent-to-sales, delivery commission, packaging, utilities, marketing, capex and ramp-up are usually material. Sensitivity testing should identify which variables can move the outlet below breakeven.
How are breakeven, average check and seat turnover modelled?
Average check is built from menu and transaction assumptions; seat turnover reflects seats, table mix, meal duration and utilisation by daypart. These drivers produce the covers and revenue needed to compare with variable contribution and fixed costs to calculate breakeven.
Discuss your project
If you are evaluating a new restaurant, location, franchise or expansion in the UAE, arrange a confidential discussion about the unit economics and decision the feasibility study needs to support.