Restaurant Groups Seek New Growth Locations in Secondary Cities

The traditional trajectory of restaurant growth in the U.S. is beginning to change.

Successful hospitality groups that originated in New York or Los Angeles have long sought new locations primarily in their own cities, Miami, or major markets like Austin, Dallas, and Houston. However, new investments examined by Nation’s Restaurant News in August 2026 reveal a different picture: Detroit, Nashville, and Kansas City are now more visible on the growth lists of some established restaurant companies.

It is not accurate to interpret this change solely as an "escape from big cities."

The main issue is that restaurant groups are now evaluating neighborhood development, demographics, real estate economics, investment flows, and competition intensity together, rather than focusing solely on city size.

Danny Meyer’s group enters Detroit with Pine Hall

One of the most notable examples is Union Square Hospitality Group.

Founded by Danny Meyer in New York, the group opened its first establishment, Pine Hall, on the 12th floor of the Hudson’s Detroit project. The restaurant features approximately 300 seats and a 3,300 square foot outdoor terrace.

Pine Hall’s official website also confirms that it is USHG’s first location in Detroit. The venue operates within the new project developed on the site of the former Hudson’s Department Store and highlights Michigan beverages and tavern-style cuisine.

The significant aspect of this investment is not just the opening of a restaurant in a new city.

USHG chose to be part of a large-scale downtown redevelopment project rather than an independent street location.

This model may allow the restaurant group to connect to an ecosystem created by office, residential, visitor, and new public space investments, rather than creating customer traffic from scratch.

Detroit’s story is not just about low costs

Detroit has long been associated with population loss. However, current Census data indicates a different era.

According to the U.S. Census Bureau, the city’s estimated population reached 649,095 in 2025. This represents an increase of approximately 1.5% compared to the 2020 baseline.

This rate alone is not sufficient justification for restaurant investment. However, when considered alongside private investments in the downtown area, new housing, offices, and redevelopment projects, it makes the location decision more meaningful.

USHG CEO Chip Wade also tells NRN that he believes it is important for public and private sector investments to move in the same direction when looking at Detroit.

The lesson that can be drawn from this is that looking at market size is not enough; the neighborhood where the investment is concentrated may be more important.

Two Hands connects to a neighborhood transformation in Kansas City

A similar approach is seen in Kansas City.

Founded in New York in 2014, Two Hands plans to open a new restaurant in the historic West Bottoms area of Kansas City in the first half of 2027.

According to the Kansas City Star, the establishment is one of the first announced new F&B tenants in the West Bottoms redevelopment project, which is projected to involve over $500 million in investment. The restaurant will be located on the ground floor of the converted historic Moline Plow building.

This detail is significant.

Two Hands is not merely entering Kansas City by following existing restaurant traffic; it is investing in the future demand of a neighborhood that is still undergoing transformation.

This kind of decision may carry higher risks, but if made at the right time, it can provide the brand with a more visible location and early entry advantage.

Kansas City’s population is also growing

The population estimate for Kansas City’s Missouri side in 2025 is 521,220.

According to the Census Bureau, this represents a 2.6% increase compared to the 2020 baseline.

Henry Roberts, founder of Two Hands, tells NRN that they consider demographics, market trends, real estate economics, competition, and neighborhood characteristics together when evaluating new markets.

This approach creates a significant distinction in restaurant growth.

If entering a new city is not a "flag planting" operation, it is essential to understand whether the brand’s existing customer profile is genuinely present in that area.

Having a location’s rent lower than Manhattan does not automatically mean it is a good investment.

Nashville is no longer just "secondary"

The third main example from NRN is Nashville.

Los Angeles-based Ten Five Hospitality will manage the F&B program for Pendry Nashville. The planned structure includes a signature restaurant, an all-day café, a lobby bar, and a rooftop restaurant near the pool.

Pendry’s current official website states that the hotel will open in 2028. The facility is planned to have 180 rooms, private residences, an all-day restaurant, a rooftop pool/bar, and event spaces.

Here, the restaurant company is not renting a branch on its own but is becoming part of the entire F&B infrastructure of a large hotel-real estate project.

This also shows another way of national growth: exporting operational competence to a new market instead of replicating the brand.

Nashville stands out in population growth among the three cities

The estimated population of the Nashville-Davidson area in 2025 is 721,074.

According to Census Bureau data, this represents a 4.6% increase from 2020 to 2025.

This growth does not guarantee restaurant demand; however, it is an important signal indicating that housing, workforce, and consumer bases are expanding.

Moreover, Nashville is no longer just a city dependent on music tourism. New hotels, residences, and corporate investments can create a more balanced customer base for restaurant groups.

The equation of "smaller market = cheaper market" is dangerous

The easiest misinterpretation of this trend is cost.

Rent and some labor costs may be lower in a city outside of New York or Los Angeles. However, restaurant groups' real investment calculations involve more than just rent.

A new market requires:

• local management staff,

• new supplier relationships,

• training and cultural transfer,

• pre-opening marketing,

• management travel,

• new permit and licensing processes,

• brand awareness investment.

Therefore, low rent does not necessarily mean low opening costs.

Buxton’s 2026 U.S. Retail and Restaurant Real Estate Outlook report also states that restaurant growth should focus not only on the speed of expansion but also on verifying local demand and trade areas. The report suggests that businesses should adopt a "precision over pace" approach in new locations where supply is limited in quality retail spaces.

The advantage of secondary markets is not lack of competition, but finding gaps

Detroit, Nashville, and Kansas City are not empty cities in terms of restaurants.

On the contrary, all three have strong local food cultures and independent restaurant scenes.

The advantage for an incoming brand is not that "there is no competition here."

The advantage lies in the fact that there is not yet excessive saturation in certain customer segments or that suitable vacancies can be found in new real estate projects for the brand.

Therefore, it is particularly important for the group entering a new market to avoid the dismissive language of "we are bringing the New York concept here" regarding local restaurants.

Two Hands’ emphasis on community alignment in its market selection is noteworthy for this reason.

How can a new location scorecard be established for restaurant groups?

When evaluating entry into a secondary market, looking only at city population is not sufficient.

A more useful model may involve evaluating the following variables together:

Demographics: population, income, age profile, and household growth.

Demand: current restaurant spending, tourism, and office/residential traffic.

Real Estate: rent, tenant improvement contributions, visibility, and delivery conditions.

Competition: the number of restaurants competing at the same price and usage time.

Workforce: availability of management and kitchen staff.

Supply: whether the existing distribution network can serve the new city.

Brand Fit: whether the concept offers a genuinely meaningful difference to local customers.

This framework can help prevent the reflex of "the city is growing rapidly, let’s enter" from taking over.

Where are similar opportunities in Turkey?

In Turkey, restaurant growth has long been centered around Istanbul.

Successful brands may prefer to open their second location in Istanbul again or move directly to Bodrum, Izmir, and tourist centers.

However, Ankara, Bursa, Antalya, Eskişehir, Gaziantep, Mersin, and various developing district centers cannot be evaluated with the same standard recipe.

The approach that can be drawn from U.S. examples is not to create a "second city" list.

The more accurate question is:

Which city or neighborhood is simultaneously generating new restaurant demand through population, housing, office, tourism, and real estate investment?

Especially early-stage correct location selection in mixed-use projects, new business districts, and transforming neighborhoods may be more meaningful than entering a saturated area in a large metropolis.

Stafflink’s View

In our view, the main advantage of targeting secondary markets is not cheap rent; it is the ability to grow in the right city in a more visible and strategic manner compared to large metropolises.

Pine Hall in Detroit, Two Hands in Kansas City, and Ten Five Hospitality in Nashville showcase three different models: one enters a downtown redevelopment project, one takes an early position in a transforming neighborhood, and the other becomes part of the entire F&B infrastructure of a new hotel.

The common point is the reversal of the logic of "city first, then location."

A healthier approach for restaurant groups may be first demand, project, and economic equation; then city name.

To succeed in a new market, it requires each location to be a sustainable operation on its own rather than merely having more points on the map.