Is opening a stall inside a food hall a good business decision?
You may have noticed food halls popping up around the country. Multiple food halls have opened in Chicago, Boston, Philadelphia, Tampa, Detroit in the last few years.
In 2019, Time Out Market alone opened in Miami, Chicago, Boston and New York. And other concepts continue to come online everywhere. So why do so many food halls keep opening?
Food halls exist in a different spectrum than food courts, in that these spaces have carefully curated selections of restaurants and chefs, which rarely (if never) include a chain restaurant or fast food location, and also can have a liquor license. Real-estate developers get an attractive option for new construction and mixed-use redevelopment projects, and vendors who want to open a first or new concept can enter with lower risk.
“In food halls, we’re talking about starting a business for between $25,000 to $35,000 in second-tier markets and $50,000 to $55,000 in costlier climates,” explains chef and restaurateur Akhtar Nawab, who, along with Michael Wetherbee, owns Hospitality HQ, a food hall management company. “That’s as reasonable as it gets to open a revenue generating business.”
Add in shorter-term license agreements and it becomes even more attractive. Many times, the management company may provide the operational infrastructure that allows a chef or restaurateur almost a plug-and-play situation.
“We’re talking about vendors no longer having to worry about securing trash and linen service, hood cleaning … any of the back-end administrative duties,” says Nawab, who operates the Inner Rail Food Hall, which opened in Omaha, Neb., in October 2019.
Food halls add a sense of community where hundreds or thousands of people can dine in a communal setting with a variety of culinary options. Those folks can experiment with cuisine they may not otherwise venture out for—food these vendors can introduce to a new market.
“[Food halls] allow new concepts to gain exposure and a customer base,” says Luck Sarabhayavanija, founding partner of Ani Ramen House, a group of craft ramen and Japanese izakaya restaurants in New Jersey, with a concept in the District Kitchen food hall in Jersey City. “For the individual vendor, your rent is lower and you can focus on your product, which allows you to pass the cost savings on to the customers.”
All in all, it seems like food halls are a great launching pad for new concepts and offer a community a new place to gather.