The Food Hall Formula: Why the Math Fails Before the First Vendor Opens

Written by:

Rudi Davis

Date:

05 Apr 2026

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Over the past decade, food halls emerged as one of retail real estate’s most promising formats — a way to activate large spaces, attract foot traffic, and give independent food operators a lower-risk entry point. The format spread quickly, from major urban centers to secondary markets, and many have thrived.

But a significant number have also struggled or closed, leaving developers and landlords searching for explanations. Most failed food halls didn’t fail because the market wasn’t ready. They failed because someone built the wrong size for the market that they were in.

Jay Coldren has seen this pattern repeat across markets. As president and founder of Onset Hospitality, he spends as much time turning down food hall projects as he does building them. This is because the math that determines whether a food hall can survive is knowable before a single vendor signs a lease. But many developers just don’t run it.

The Numbers Behind the Formula

The most common mistake in food hall development isn’t location or concept. It’s square footage. “People make them too big,” Coldren says. Every vendor in a food hall depends on a minimum daily sales volume to stay solvent. When a hall is oversized for its market, too many vendors end up competing for the same limited pool of customers — and none of them generates enough volume to survive. “The place always looks half empty and never feels successful,” Coldren says.

The failure pattern is consistent. Spaces between 45,000 and 50,000 square feet without sufficient local density struggle from the start. Coldren recommends a different approach: fewer vendors in a smaller space. A hall with eight to ten busy kiosks outperforms a larger venue with fifteen underperforming ones. Coldren says that he would rather have an incredibly busy smaller hall than an larger hall that’s empty.

Why Secondary Markets Get It Wrong

The oversizing problem is most acute outside major cities. Developers frequently transplant food hall models that worked in dense urban markets into secondary and tertiary cities without adjusting for local conditions — smaller populations, lower foot traffic, fewer built-in demand drivers.

“If you don’t have that many people in your market, going smaller and having a tighter operation is smarter,” Coldren says. The math that works in a high-density urban neighborhood simply doesn’t transfer. A format sized for Manhattan or Chicago requires a customer base those markets can reliably deliver. Most secondary markets can’t.

The solution isn’t to avoid smaller markets entirely. It’s to right-size the concept for what the local market can actually support — fewer vendors, less square footage, tighter operations. A well-calibrated smaller hall can succeed where an oversized one would fail.

Know Before You Build

Coldren’s approach starts before a single lease is signed. Onset Hospitality analyzes traffic drivers — medical centers, hotels, residential density, entertainment venues — to determine whether a market can support a food hall and, if so, what size. From there, the firm calculates ideal kiosk count, seating, circulation, and back-of-house space. The analysis is deliberately conservative. Onset declines more projects than it accepts.

“We say no a lot more than we say yes, because there are a lot of places where food halls just don’t work,” Coldren says. “Sometimes a straightforward leased restaurant will work better than something as complex as a food hall.”

That willingness to walk away is itself a methodology. Developers who rely on optimistic traffic projections rather than verified demand are building toward failure from the start. The question isn’t whether a food hall would be an asset to a given market. It’s whether the market can generate the daily visitor volume that keeps every vendor in the hall solvent.

What the Formula Actually Tells Us

Food hall failures tend to get blamed on timing, concept, or market conditions. Coldren’s framework suggests the explanation is usually simpler and more preventable: someone built more space than the market could fill.

That’s a solvable problem — but only if developers treat food halls as an engineering challenge before they treat them as a real estate opportunity. The visitor thresholds, kiosk counts, and space allocations that determine success are calculable. The markets that can support a food hall, and at what scale, are identifiable. The developers who do that work before breaking ground are the ones whose halls stay open.