United States: Is Your Restaurant Ready For A Second (Or Third) Location?

Are you thinking about expanding your restaurant? Is now the time to open a second location? Have you considered all of the benefits and pitfalls? Are you ready to do this?

Opening a second location for your restaurant is not a decision to be taken lightly. However, if you think back to the time before you opened your first restaurant, and consider the research and analysis you put into it, as well as the challenges you have faced and the success you have achieved, you are well ahead of where you were back then.

Location, Location, Location

Your first step in deciding to open a second restaurant is to choose a location. You need to determine how far apart the restaurants should be, who will be your competition and how successful they are.

The next step is the creation of a business plan. You know the restaurant business; you know your restaurant. Use that knowledge to determine the amount of capital you will need to open and operate at a new location, how many tables and seats you will have, the average check, patron turnover, staffing needs, operating costs, etc. Presumably, you can modify the plan you developed before you opened your first location. You also will need to consider how much of your time will be spent on the new operation prior to its opening.

Consistency

To insure consistency between the two restaurants — especially with the way the food is prepared — you will want to use kitchen equipment similar to the equipment your chefs are currently using. You will also want to use the same food suppliers. Duplicate your accounting and inventory systems and HR practices wherever you can. Consider whether there are members of your current staff who would be willing to work at your second location and help with the training of your new staff.

Because you will not be able to be on hand to manage both operations at once, you will want to leave your current restaurant manager in place at the first location so that you will have the time needed to concentrate on the second. To do this, you need to ask yourself whether he or she has the skills to manage the operation without you being there. Does he or she have the employee's trust and respect, and have the abilities to effectively handle patrons' questions or concerns?

Seek Professional Advice

Ask your accountant for advice. They work with restaurants and know the business. They have seen expansions that have been successful, and those that have failed. They know what to look for and what questions to ask before you commit to expansion.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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