How to Start Planning for Your First Restaurant Expansion

by:
on June 6, 2019

You’ve got a few years under your belt as the owner of a successful first restaurant. All signs indicate that you’re ready for an expansion, and you’ve addressed the critical questions involving your capital, business plan, location, and menu—so what’s next?

The very first restaurant expansion isn’t for the faint of heart.

Expansion can only go as far as your operations and management can support it. That’s why you’ll need a solid strategy to ensure flawless execution prior to opening. Without ensuring that all systems and management are in place for a multi-restaurant operation, you potentially risk the failure of not just your new restaurant, but your original one as well.

To help you prepare, we’ve put together a checklist of what to do first as you prepare for your restaurant expansion.

restaurant expansion checklist

1. Expand with (another) business and marketing plan

Key challenge: Until now, you’ve managed a single restaurant with operations under one roof. But now, everything will change upon expansion—from where management will be located to how many new employees you’ll hire. Your original business plan no longer fits the expanded location.

Recommendation: While some of the same information from your first business plan may apply, other sections will need to be tailored to your second location, such as: competitive analysis, target market, financial forecasting, location, and the management and staff structure at each location.

Crafting a business plan for your restaurant expansion keeps your eye on the ball, ensures that you meet your restaurant expansion goals, and puts you in a great position to continue scaling your operations down the road.

In addition, your second location will also require a new marketing plan. Think about who your new target audience is, how you’ll be presenting your new restaurant across social media platforms and what promotion and activities you’ll be doing to generate excitement ahead of the opening to attract new and existing customers.

2. Expand with a knowledgeable architect

Key challenge: Your restaurant is going to be a rental space in a building or a conversion of an existing space. You may envision big dreams for what your restaurant’s going to look like, but you don’t know how to execute that.

Recommendation: An experienced and knowledgeable architect will be able to take a look at your space and, even more importantly, root you in reality. They are also likely have recommendations for contractors that they’ve worked with.

According to Denis Turco of Denis Turco Architects who advises restaurant clients on the design and construction of their food service establishments, most typical revenue projections allow for $12-30,000 a seat.

“Be sure your plan allows you to sustain your business for an extended period at the lower end of the spectrum. It often takes a year or more for a new restaurant to take hold.” he says.

Having a trusty architect is just a start. You’ll also want to establish a sound supply chain of contractors, engineers, and other partners that you can rely on to ensure a smooth process prior to your restaurant opening.

3. Expand with people strength

Key challenge: Your responsibilities as a restaurant owner changes the moment you have multiple restaurants running. During the early days of a restaurant expansion, you’re likely to spend more time at the new location and be spread thin.

Recommendation: It’s important to have a strong managerial team that will free you from the responsibilities of the first location. Surround yourself with hardworking and smart people who are aligned to your vision and be invested in developing them. A good way to do that is to look at who in your existing team is able to step up and take on that challenge.

Promoting from within makes good business sense. It’s the most effective way of developing a positive culture while ensuring that new employees are learning from the best. Furthermore, tapping into the expertise of your current staff to train new employees will ensure that your guest experience is highly consistent throughout both locations.

4. Expand with operational strength

Key challenge: As your restaurant expands to a second location, ensuring consistency in your processes is key to maintaining your restaurant’s standards.

Recommendation: Applying scalable systems will ensure consistency and quality control for both restaurants. David Knighton, VP of Operations and a franchise owner at Rodizio Grill, says the ability to duplicate operations is key to a successful restaurant expansion.

The best way to make your restaurant expansion easier is to consistently document what you’re doing. Operational procedures must be detailed, with clear and precise written instructions for others to execute the job correctly and competently.

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.

Clear and well-defined standards are the backbone of your restaurant’s operations. Be sure to document recipes, policies, processes, and systems that are necessary to ensure your restaurant runs like a well-oiled machine. You can also assign a manager or executive chef to oversee new menu items and monitor operations at each location.

Detailed documentation and training materials will keep existing employees accountable in your existing restaurant and ensure you have what’s needed to train new ones at your new location.

5. Expand with restaurant technology

Key challenge: It’s one thing managing a single restaurant on a standard POS system. Managing multiple restaurants, however, requires a scalable restaurant management platform that lets you manage locations through one dashboard. Without this, you won’t have the ability to pull data points from various locations to gather customer insight.

Recommendation: A restaurant expansion gives you a prime opportunity to reassess your current restaurant POS setup. Some questions worth asking: Has it improved your operations and increased productivity and sales as a result? Will you be able to use it to manage multiple locations and various processes?

The system you choose to implement will be critical in your expansion from one restaurant to a second, or even a third. You’ll need a restaurant management platform that is intuitive, easy-to-use and, more importantly, scalable in how it integrates across multiple locations.

Scalable technology is always worth its weight in gold. Not only is it beneficial upon implementation, it pays for itself in the long term with its ability to automate and integrate processes, in turn ensuring your restaurant runs smoothly and effectively.

Next steps in your restaurant expansion

In summary, your initial steps in your restaurant expansion should be to: write a new business plan for your multiple locations, start working with a savvy architect, assign a strong management team, ensure processes can be duplicated for consistency and reevaluate your restaurant technology.

That last part about technology is particularly vital in improving your processes not just at one restaurant—but two—and providing you with all the data you need to make decisions that will ultimately drive sales.

Need help picking a scalable restaurant POS software? Refer to our Buyers Guide for restaurant POS software or speak to one of our expert advisors at (844) 687-6771 for product recommendations.

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Learn how to expand with restaurant POS software