Thinking of Restaurant Expansion?


Opening multiple locations can be an intoxicating prospect, but are you ready?

I recently met with a new restaurateur coming up on his first anniversary. He told me things had gone well, but I got the impression that they hadn’t gone as well as he had hoped. 

We ran the gamut, talking everything from marketing to menu pricing. I shifted gears and asked about his family. New to this country, he spoke in glowing terms about his wife and children, and the opportunities Canada has afforded him. After all, he is the proud owner of a restaurant.

Then I saw his shoulders droop and his eyes drift to the floor. He mentions his only regret is that he never gets the chance to be with them.

This man has had only four days away from work in his first year. He is convinced, however, that things will get better and he will see more of his family.

Then he utters the most startling thing I have heard.

He can’t wait to open a second location and already has real estate people scouting sites!

I honestly gasped at the idea and decided it was time for a heart-to-heart. Not only with him, but with all of you considering expanding.

I realize the allure of multiple locations—if you made a certain amount of money with one spot, then you can double or triple it with one or two more locations, right? Not so fast.

While it is possible to run more than one successful restaurant, if you want to maintain any sort of work-life balance (and trust me, you do) you need three key things in place before seriously considering the idea.

1. Find the right partner

Because you can’t be everywhere at once, you shouldn’t branch out until you can find someone to help shoulder the day-to-day. Whether they’re a partner in the true business sense, a general manager or a different role is up to you. Whoever it is, they need to have the same level of passion and commitment to your business that you have. After all, those qualities can’t be taught and such responsibility shouldn’t be given to a person who is not fully vested in your business. 

Some operators look to a family member or friend to take on the position, but be aware that nothing can ruin a relationship faster than business.

When you find the right person, gradually let go of the reins and allow them to make mistakes and learn, just as you did. Focus on achieving positive results rather than the steps they take to get said results. While your way may work for you, remember that it likely isn’t the only way.

2. Set policies and procedures

Look at any good chain restaurant and you will find that this is an area they excel at. 

Do you have an employee manual that clearly outlines the vision of your company?
It should contain policies and procedures outlining standards of consistency that are rigorously maintained. This will help uphold service and food quality when you can’t be there, overseeing things.

Everything, including dress code, staff training, inventory, recipes, employee conduct, job descriptions, closing duties and even how you deal with social media should be in writing. Without having it all down on paper, you have no way of enforcing accountability. 

3. Evaluate financial strength and profit potential

Your current operation must be in such a strong financial state that it can withstand the dip in numbers likely to occur while you’re getting your new restaurant up and running. Most operators hope this doesn’t happen, but it is my experience, and that of my peers, that financial performance almost always declines. If you are the driving force behind your restaurant’s success, it stands to reason that there may be a slight softening of sales when your energy shifts to your new venture. Fortunately, things tend to get back on track quickly if handled properly. 

Also, there is no point in putting you and your family through the work, risk and stress of opening multiple locations if you’re not going to see a more comfortable lifestyle on the horizon. So fully vet the profit potential of an additional location before jumping into execution.

Obviously, there is a lot more to consider when expanding, but after laying out these critical steps, the fellow I met with had some second thoughts and is slowing things down, even taking time to reacquaint himself with his family.

And when he’s ready, he’ll be in a much better position to open a second location.

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