First, a stitching group is great. You can meet in a variety of places. My suggestion is to first decide where you would like your group to meet. I was setting up a group to meet at Borders and then found out that they were closing. Due to an injury, I am kindof on hold this winter, but I have found that there are several local restaurants that have places set aside for birthday parties and the like that make ideal meeting places. Coffee shops are not so good because the lighting is too poor for stitching. Consider calling some churches for space as well. Look at your times as well - maybe meeting for breakfast on a Saturday is what works for your group.
It's hard to set up a group that meets at each other's homes, but that certainly can be done and is great for a small group. Some folks may be uncomfortable having a meeting at their home, have a small apartment or live quite a distance from all other members, so have a backup place for those situations. I am a member of a book club that has met in each other's homes for two decades now.