The honest answer is its where you can capture the highest amount of people as customers. If you open in a small town with 5000 people and hypothetically capture 100% market share you have a maximum customer base of 5,000. If you open in a city with 1,000,000 people and can capture 10% market share you have a customer base of 100,000. In this hypothetical you would be better off in the bigger market as long as you can capture over 5,000 people (This is completely ignoring additional costs associated with rents and other various costs associated with bigger vs smaller markets). Its really something that you have to try and analyze on a per market basis, perhaps you can capture more customers in a 25,000 person market than the 1,000,000 person market you just have to look at each scenario individually. To make things ever more complex there’s things to consider such as order frequency and average ticket sales.