Restaurant Feasibility Study in the Memphis, TN-MS-AR Metro Area

Restaurants first in a three-state metro

Memphis touches Tennessee, Mississippi and Arkansas, and dining leads the local list: full-service restaurants hold the top slot, 1 of 39. Counted nationally the metro is 81 of 821, and a location quotient of 1.17x tilts slightly toward restaurants. Memphis approvals total 66 loans, worth $37.4 million, for FY2017 through FY2026. The median loan, $350,000, is 1.27x the class median nationwide, and the book's middle half runs $142,200 to $630,750. The Memphis median is therefore somewhat above the class median nationwide.

Franchise flags cover 25.8% of loans, which leaves independents as the majority. The program split is withheld because the cohort is too thin. White-tablecloth rooms and casual bars fall under one full-service code, so a study has to define the concept it tests.

Holders and counties

Among 7(a) holders, 9 loans and $3.2 million belong to The Huntington National Bank, while Pinnacle Bank (TN) has 8 loans but $7.4 million, a much heavier average. Both come from the SBA holder field and imply nothing for the banks. The Huntington National Bank's 9 loans total $3.2 million, while Pinnacle Bank (TN)'s 8 loans total $7.4 million, so loan count and dollars rank the two differently. Shelby County, TN accounts for 52 loans, so the Mississippi and Arkansas edges of the metro are thin parts of the record, and Shelby County alone makes up most of the 66 loans.

Cohorts this small leave Memphis with no printed cancellation or charge-off rate; an empty cell there means unpublished, not none. Approvals by year: FY2018 10 loans and $8.7 million, FY2019 7 and $3.5 million, FY2021 6 and $3.7 million, FY2023 9 and $3.1 million, FY2024 5 and $5.0 million, FY2025 9 and $1.2 million, FY2026 11 and $7.0 million. FY2017 and FY2022 are withheld for thin counts; FY2020 printed a zero in the file, a year with no approvals recorded. Whether a loan counts toward Memphis depends on its project county falling inside the 2023 delineation.

Memphis dining: points a study has to prove

Traffic, daypart sales and rival rooms near the actual address, in Shelby County or beyond, need measuring; kitchen and dining room costs are held against the $350,000 median, and sales less prime cost must cover debt service. The appraisal reaches the business and the building. Nothing here assures approval.