Co-Written by: Matthew Giguere, Eric Barth
The food hall revolution has captured the attention of both restaurant consumers and developers. Consumers are drawn to food halls due to the abundance of menu choices they offer, while developers see them as a way to mitigate investment volatility by licensing space to multiple food service entities under one roof.
The food courts and hall industry in the United States alone is valued at $4 billion. Over the past five years, the number of food halls has increased drastically, with nearly 400 currently in operation. According to real estate services firm Cushman & Wakefield, another 145 food halls are currently under development. Due to their unique business structure, it is essential for developers and operators to carefully assess the benefits, risks, and legal considerations associated with food halls prior to embarking on development ventures.
What is a Food Hall?
Food halls are venues composed of multiple local food and beverage vendors that mainly serve food by counter service for customers to consume in common seating areas. In contrast to food courts, which contain national chain restaurants or contract food services, most food halls feature locally owned entrepreneurial vendors who offer food that is crafted within the facility or in a commissary kitchen and is often sourced locally. Food halls are most frequently located in large, shared spaces, such as redeveloped warehouses or manufacturing facilities. They may also contain non-food retail shops or be located adjacent to popular shopping centers or retail districts.
What are the Benefits of a Food Hall?
Food halls offer numerous benefits for consumers, developers, and food vendors. They provide a wide variety of menu choices, making it easy for consumers to try new things and cater to diverse preferences. Developers can diversify their investments by licensing space to multiple vendors, reducing the risk associated with relying on a single large restaurant. For food vendors, food halls offer low barriers to entry, including low start-up and labor costs. The shared infrastructure and shorter operating hours provide vendors with a better work-life balance.
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