Use these tips for a smoother chain expansion
Opening a second location is one of the most difficult decisions any restaurateur will ever face. After all, you’ve already bucked the odds by opening one successful restaurant; do you really want to push your luck, doubling your stress, workload and financial investment, in the hopes of growing your overall business?
If the prospects of opening another location seem outweigh those challenges, here are six things we learned that might help you through the process of opening another location:
1. What are Some of the Surprising Benefits of Opening a Second Location?
When you open a second location, you have a much better understanding of how to create a realistic timeframe and all the planning it takes to get a location built and fully staffed.
Opening a second location also gives your existing team the opportunity to grow. Our menu is pretty unique and there’s a lot of learning involved, like learning about all the different types of Korean chili pastes, so we found that training a new staff actually helped keep our existing staff motivated and hungry to learn and wanting to be a part of a growing restaurant group.
2. How Do You Find the Best Place for a Second Location?
You need to determine things like whether you want to be close enough to your existing customer base that there might be some familiarity with the brand or if that simply poach from your existing costumer base. You’ll also have to weigh the risks of taking on a higher rent in a popular (and potentially crowded) neighborhood versus rolling the dice on a lower rent in a less established area. We started searching a full 10 to 12 months out from the opening, and we ended up needing every single day to get our second location perfected by opening day.
Take advantage of the fact that you already own an existing restaurant to conduct a little free market research by casually asking guests where they live, how they heard about you, and so on. This helped us settled on a more affordable rent in a smaller, more distant community versus the higher rent space in a more central location. Every location has its positives and negatives, so you need to determine what’s most critical to ensure your success.
We could have held out for a space even closer to downtown, but we learned from experience (and speaking to our customers) that it’s more important to have a space that works for exactly what we need versus the perfect location and a poor fitting space.
But another aspect every restaurateur needs to think about is what kind of face you are presenting to potential customers. Street visibility is great, especially if it’s a high-traffic area, but not if you have to sacrifice having an open and welcoming layout. We strategically chose a spot with large window walls, which allows people walking by to see into the restaurant, and that really lessens the intimidation factor.
3. How is Opening a Second Location Harder or Easier Than the First?
No matter your financing plans, you already have one huge positive in your back pocket. You are an established brand. You have successfully opened and continue running a restaurant, so there’s definitely a benefit to being an established business because investors are traditionally wary of the restaurant business.
It’s also easier to open the same concept you’ve already built once before. We were able to use a lot of the same people from our interior designer to our stainless steel fabricator. Not having to start from scratch saves a lot of time and money.
That said, there will be unexpected challenges, and things will not go exactly like they did at location one. Going to a new town or area, it’s more about adapting versus changing, listening to guests, and catering to their needs while still staying true to who you are. It’s like going from high school to college—you already know how to study, but you have to adapt to new teachers, new roommates, and so on.
4. How Do You Split Time Between Two Restaurants Located Across Town?
You have to know before opening a second location that your standards are set in stone. Day in and day out, there has to be consistency in great food and service. If you can’t be there, you need to know that staff is still folding napkins and pulling chairs out for guests.
The key is setting standards that people are held accountable for and to be a leader, not a boss. That means being there and touching each restaurant every single day.
But it’s also about training your staff to succeed even when you are not onsite, and not just going in and doing your side work and setting up. It’s paying attention to the bones and structure. Check if the water filter needs replacement or that the air conditioner is set to the right temperature.
It’s not enough as a restaurant operator to just know your area of expertise or responsibilities; you need to know enough about each aspect from front of house to back of house to know when a section that’s not your own is not being handled properly. My chef and co-owner knows what side work the service staff should be completing; I know how chef’s ramen broth is supposed to taste. We’re all on same wavelength and being consistent.
5. What Else Should Owners and Operators Know Before Expanding?
Don’t assume that your new location will operate just like your original. For example, our new location is also in a much more family-oriented neighborhood, so we’re adjusting by expanding our weekend hours and also taking the extra time at the table to explain what we do, sharing our passion and knowledge so even the youngest guests can really enjoy the experience. Be ready to adjust on the fly without altering the DNA of your brand.
And no matter what you’ve achieved in the past, realize you need to accept and embrace being the new kid in town. Meet your fellow restaurateurs, join the local chamber of commerce, and get involved in local events. It can be frustrating starting all over from scratch and reintroducing yourself to a whole new community, but that untapped potential is why you’re here in the first place.