At one time there was a book with detailed info on setting up groups, every so often Quilter's Newsletter will run an article. The first group I started, met in each others homes weekly, until we were able to get a meeting room at the library. Maybe a quilt shop in the area would be interested in having you meet there. The only limits are the number of people and the collective imagination of the group. Let us know how it all turns out.
Experience is everything.
Can you also give some insight into problems that might crop up or things that should be avoided. They will reserve meeting rooms for groups on a regular basis, usually with no fee. Many churches will often do the same for a moderate fee as long as one of the group is a member. Melodye's thought about meeting in a private home until another space becomes available makes a lot of sense. My sense is that this would be a major mistake.