The diner is a time-honored American institution and cultural icon. Its roots date back to the late 1800s when Providence, Rhode Island newspaperman and entrepreneur Walter Scott repurposed a horse-pulled wagon into a car that served late-night sandwiches and coffee.
Of course, the diner has evolved and changed quite a bit since then. Diners expanded even further after World War II, and experienced a heyday in the 1950s, when the location, concept, and look of these establishments changed and began sporting stainless exteriors and large windows designed to attract passing motorists.
No matter how the look or definition of diners change, they remain a popular — and lucrative — business opportunity for business owners today. In fact, diners claim a big slice of the pie in terms of the overall restaurant business in the U.S., which is on pace to exceed $860 million in sales this year.
So if you’re thinking of opening or buying an American diner of your own, let’s take a look at the current landscape, and what you can expect from this popular business opportunity.
The current landscape
The burgeoning popularity of the weekend brunch coupled with the ever-present demand for late-night eating options point to a sustainable business model for diners for years to come. In short, as long as people eat food, there will be a demand for diners. That doesn’t mean they’re a foolproof business though.
For starters, in this business, there will always be plenty of competition — there are currently more than one million restaurants in the U.S. Not all of these are diners, of course, but when it comes to eating out, patrons have no shortage of options. That means your customer service, selection, and environment must stand out from other eateries in the area.
Before you buy or build, it’s important to research the competition in your area, including how they’re performing, what type of customers frequent these places, and the type of food they serve.
Location is always a key consideration when buying or starting any business that relies on customer patronage. Diners were created on the premise of feeding people on the road and on the go, however, so you don’t necessarily have to be in a trendy or popular dining area to succeed. Highway diners can be extremely successful so long as the route they’re on is well-trafficked and the service is worth stopping for.
Whether you’re looking to open a new location in a well-trafficked area or to buy an existing diner for sale in the U.S., it’s important to note that retail rents are at a premium in the most desirable areas. That means you’ll need to come to the table with a business plan to ensure the revenue you generate is more than adequate to offset any leasing costs.
Of course, no matter where you set up shop, the key to success is in offering excellent food and service to generate positive word of mouth and attract loyal, repeat customers.
Be prepared for the challenges
As with any business, owning and operating a diner comes with its challenges. Staffing your diner with friendly and reliable servers and cooks often tops this list of challenges. This is a key area of focus because your success ultimately depends on the employees that are interacting with your customers.
Besides offering quality food at a reasonable price, a friendly server can be the difference between a good or bad dining experience. Overall, it’s your serving staff that will determine if a person becomes a repeat customer or simply a one-time transaction.
Developing a solid business plan can help you avoid some of the staffing and other pitfalls diner owners often face. Your business plan should outline at least a basic executive summary outlining what the business entails, an analysis of the market research you’ve completed, what the management structure will be, a basic marketing and sales strategy, and details of how you will allocate financial resources.
Benefits of owning a diner
Once that business plan is in motion, you can rest assured that you will be in a good position to reap the benefits of this rewarding business sector.
At its best, running a diner allows you to interact with people, and to become an established and well-loved institution in the community in which you operate. Once you begin to generate positive word of mouth and repeat customers, profits will follow.
What the future holds
As mentioned above, the American diner isn’t likely going away anytime soon. There isn’t a one-size-fits-all model for succeeding in this business, but instead, there are several different types of opportunities for running your business.
Diners today come in all shapes and sizes. From those entrenched in nostalgia — with oversized leather booths, checkered floors, and jukeboxes and slinging burgers and corned beef and hash — to the more trendy types that focus on specialized farm-to-table menu offerings, Americans will continue to frequent all of the above.
Overall, there’s never been a better time to get into the diner business. So long as you’re willing to put in the work and focus on atmosphere, quality food, and stellar customer service, you will find yourself in an industry that’s got a long and bright future.
For more information on becoming a diner owner, check out our tips on how to buy a diner. And if you’re considering capitalizing on the market demand to sell your diner, you can learn how to get started here.