Picture this: Your restaurant is thriving. Your staff is happy, your customers are coming back, and your wallet is bursting. Things are going SO well that it might have you thinking if it’s time to open another location.
Is your dream is to grow the community and ethos behind your restaurant to other cities? It might be time to consider opening an additional restaurant location. The decision to open a second, third, or twentieth restaurant isn’t an easy one. It takes a lot of thought and planning to ensure a painless execution.
Over the past five years, the multi-location restaurants in the United States have grown by 3.5 percent to reach a predicted revenue of $144 billion in 2019. In the same timeframe, the number of multi-location businesses has grown by 2.7 percent and the number of employees has grown by 3.5 percent.
If you want to grow and expand your business, but don’t know where to start, have no fear. From the first thought about opening a new restaurant to opening day and beyond, we’ve compiled everything you need to know to successfully operate a multi-location restaurant.
How to Know You’re Ready for Business Expansion
There’s no simple, straightforward way to know if you’re ready to open an additional restaurant location. Here are some important questions to ask yourself before you start planning.
- Are you so busy you can’t handle the crowds?
- Do your customers travel from distant cities to visit your restaurant?
- Do you have funding?
- Will opening another restaurant increase your capital?
- Are you willing to put in the hours?
If you answered yes to all of these questions, congratulations! You’re ready to open an additional restaurant.
Why a Solid Support System is Key to a Successful Expansion
For some restaurant owners, checking the boxes above isn’t enough to take the leap into opening a new restaurant. Having a reliable team behind you is necessary to give the push you need.
Nick Varano, the owner of The Varano Group in Boston, MA, and an Upserve customer knows that the people he surrounded himself with early in his career propelled him into business expansion.
“I was fortunate enough to surround myself with an amazing staff that really cared,” he says. “I think the moment that I realized that we can grow and open up more locations is when I saw who I had behind me. I know it sounds cliché, but when you have good people behind you that believe in you and want you to do more, even though it means maybe working a little bit harder, that gives me the strength to say, let me go out there and try it.”
With nine restaurants and cafes now operating throughout Boston, he credits a staff that goes above and beyond the call of action.
“I think that was the moment when I realized, when I started my first restaurant, that I was fortunate enough to have a good group of guys behind me that will get up every morning and go get the best produce, get the best product, and make everybody feel good when they come in here,” he says. “That’s a winning formula. That’s a recipe for success, so why not duplicate it? Then it’s almost like a snowball effect.”
“I know it sounds cliché, but when you have good people behind you that believe in you and want you to do more, even though it means maybe working a little bit harder, that gives me the strength to say, let me go out there and try it.” – Nick Varano, owner of The Varano Group
How to Prepare for Your New Restaurant Opening
Do you think you’re ready to grow your restaurant family? Whether your current business just opened and you’re thinking into the future, or you’ve had a few successful years under your belt, starting your new adventure with a well-thought-out plan is key to flawless execution.
The Ultimate Restaurant Expansion Checklist
Before you dive into multi-location restaurant ownership, there are a few to-dos to consider. We compiled a list to help you check every box and successfully expand your business.
1. Finalize Funding
You can’t open a new business without capital. Will you be funding the new business yourself, or will you rely on business loans to get started? Before you dive into your options, you should first and foremost make sure that the restaurant(s) that are currently in operation are in good standing. Once you’re comfortable with your finances in your current business, you can start exploring the best way to fund your new experience.
You may find yourself seeking help for your new endeavor in the form of business loans. Taking out a loan to help cover the cost of the purchase, as well as for working capital, renovations, or expansion is a common maneuver—but it does require thoughtful planning and consideration. If you are comfortable with paying back thousands of dollars in interest in order to get started sooner, business loans could be the right option for you.
The best thing about opening a second or twenty-second location is that you already know how much money it takes to successfully open and operate a new business. Use this knowledge as guidance through your decision-making process. Whether you’re using the glorious profits from your first business or seeking a loan to make your new dream come true, it will be helpful to take a look at how much money you put into your first restaurant that helped make it what it is today.
TIP: Be wary of utilizing funds from your current restaurant to break ground on a new one. You could risk your current profits and negatively impact your first restaurant.
2. Find the Right Location
You know the saying: location, location, location. Chances are you’ve already nailed it with your first location if you’re considering opening a new restaurant. The pressure of finding the perfect spot to break ground and build your new business is high, but with careful consideration, you can find the perfect location.
Here are a few things to consider when choosing the new location for your restaurant:
- Choose a location far enough away from your current restaurant in order to reduce the risk of cannibalizing your current clientele.
- Check out what types of restaurants are in the surrounding area and make sure your concept has a chance at succeeding in this new location.
- Dive into demographics and spend some time in a potential new area to learn about the people in the community.
David Knighton is the VP of Operations and a Franchise Owner at Rodizio Grill, a 23-location Brazilian Steakhouse with locations spanning from Nevada to New Jersey (and an Upserve customer). He warns against getting too attached to a new location to quickly.
“Getting excited about a new unit in a particular market is an emotional response, but working through the particulars of what will make the new unit successful is the most important analytical response,” he says. “New franchise systems love to grow, but that excitement should be tempered with analytical research and probing questions to make the unit as successful as possible.”
“Working through the particulars of what will make the new unit successful is the most important analytical response.” – David Knighton, VP of Operations and a Franchise Owner at Rodizio Grill
3. Build a New Business Plan
Unless you started your restaurant with the goal to expand in the future, you’ll need to work on a new restaurant business plan for your family of restaurants. If you’re keeping the same concept as your original location, you’ll be able to simply repeat the process and scale your business plan to include an additional location. Since your first business was so successful, duplicating systems is the best way to ensure success in the future.
Oak & Embers in Cleveland, OH is a two-location BBQ restaurant that offers authentic smokehouse recipes served alongside quality bourbon and craft beer. When owner and Upserve Customer Gretchen Garofoli decided to open a third restaurant, she strayed from the concept at Oak & Embers to do something completely different.
“We’re going to do craft, classic cocktails, and classic dishes like the stuff my dad served when he was a bartender. We want to ‘revive’ socializing around good food and drinks.” – Gretchen Garofoli, owner of Oak & Embers
“We’re opening a new restaurant concept a mile from our Hudson Oak & Embers called ‘Revival Social Club—we want to ‘revive’ what it means to share a meal,” she says. “We’re going to do small, shareable plates. Put your cell phone away, sample a bunch of different plates, and talk about it. We’re going to do craft, classic cocktails, and classic dishes like the stuff my dad served when he was a bartender. We want to ‘revive’ socializing around good food and drinks.”
Even if your concept isn’t a duplication, like Garofoli’s new venture, you’ll want to make sure that you structure your operations to match your original location. Providing a change in vibe or food doesn’t mean that the overall experience in hospitality and commitment to customers has to change. Crafting a solid business plan that can be altered for future expansion is the best way to scale your operations and continue growing.
4. Write a New Marketing Plan
Effectively marketing one business is hard enough, but what about multiple locations?
The most important thing to consider when developing a new marketing plan for your new restaurant is the target audience. When you were doing demographics research while searching for the right location, you probably learned a lot about how to market to that community. Using this information is crucial to getting your message across in the most effective way.
Start thinking about your new restaurant’s marketing strategy with help from our Restaurant Marketing Guide.
Take some time to think about how you will position your new location on social media, what types of information you will share to generate excitement, and what you will do long-term to retain customers.
5. Scale Your Staff & Operations
You’ve already assembled a badass team that helped your business thrive. Now it’s time to figure out a strategy to ensure your new staff is just as awesome. Take a look at your current staff and assess who is ready to step up. Promoting from within is key to helping your staff members grow, and to bring in new employees that will learn from the best.
Leveraging your current staff’s expertise to train your new staff is a great way to ensure that your guest experience will be consistent from location to location. If you haven’t already developed a training guide or an employee handbook for your first business, now is the time to put those together. This will help set the standard for how employees should behave at work, and hold them accountable for their actions while they’re on the clock.
“One great management team doesn’t always equate to 3, 5 or 10 great management teams.” – David Knighton, VP of Operations and a Franchise Owner at Rodizio Grill
With nearly two dozen locations in different markets across the United States, Knighton cites the ability to duplicate the integrity of operations as key to business expansion.
“The operational procedures have to be nailed down, with written details for others to easily execute—plus structures in place to ensure the best quality in expanded units,” he says.
The success of your new location is reliant on the passion of the people and the clarity of the procedures that you put in place.
“First, clearly know and document your processes, procedures, rules, and structures that make your brand successful. Make those documents so clear that someone new to the organization can follow them,” says Knighton. “Second, get great people. Although we say we are in the food industry, we are clearly in the people business. It makes all the difference.”
Expanding your business will be a stressful time. Reduce the risk of burnout by relying on your staff to support you during the madness. Delegating responsibilities will be your saving grace while you’re opening up a new location.
6. Purchase equipment, supplies, and inventory
Take an inventory of the equipment and supplies that you and your team use every day to execute a flawless experience for guests.
- Measure your space to ensure your appliances fit
- Measure your space when deciding on tables and chairs
- Use the same food suppliers
- Make sure your new restaurant meets all codes and zoning regulations and has the proper licensing
TIP: Keeping consistency with the type of equipment you use in your new restaurant will help current employees to train your new staff with ease.
7. Find the Right Restaurant Tech
The systems you implement in your restaurant serve as the backbone of your business. Finding the right tools to help you grow smarter will be key to the success of your new restaurant.
“If you had a great, flexible POS system that allows you to marry the technologies, and if you do it right, then the insights that you can gain from all these data points are immense.” – Malcolm Wooff, CFO at the Varano Group
Restaurant management platforms that are scalable from your first location to the 50th will be your best friend through the expansion process. Starting with an intuitive, easy-to-use system will make managing multiple locations and new employee training painless.
As Chief Financial Officer of the Varano Group in Boston, Malcolm Wooff believes that technology is the backbone of any great restaurant operation.
“I think the key to it, for me, is you need a central point that you can actually start to adopt different technologies from. And for us, it’s the POS,” he says. “If you had a great, flexible POS system that allows you to marry the technologies, and if you do it right, then the insights that you can gain from all these data points are immense.”
Want more on successful business expansion? Check out the infographic we created with our friends at CoverWallet: