What You Need to Start a Second Restaurant Location
Do customers keep asking when your restaurant will come to their town? Have wait times for a table during the dinner rush started to turn customers away? Are you having trouble meeting overall demand with just one location?
If the answer is “yes,” it’s time to think about expanding your restaurant. Starting a second location can be exciting, but it also comes with its fair share of challenges. If you want to be successful, you need a solid foundation in place long before your new restaurant opens its doors.
Steps in Opening a New Business Location for Your Restaurant
Location is, of course, one of the most important factors to consider when expanding your business. Even if there’s a lot of customer demand for your restaurant to set up shop in a particular area, you don’t want to jump right in without doing some research comparing the regional demographic to your target audience. The availability of appropriate real estate can also make or break your decision, especially if you run a franchise with specific requirements for layout.
You’ll also need to review and update your business plan. The financial projections and operational logistics need to be adjusted to reflect the addition of a second restaurant, and your visions and goals have likely changed since you drafted the original plan. A new plan is also essential if you intend to seek financing to help establish and start running your second location.
After getting these basics in place, you’ll need to take care of more specific details, which differ depending on whether your restaurant is independent or part of a franchise.
Checklist for Opening a Second Restaurant Location
- Clarify the processes behind basic day-to-day operations, and make a plan to implement them at the new location.
- Invest in identical equipment to ensure these processes can be duplicated seamlessly.
- Determine if you want to recreate your current setup, or make adjustments based on regional characteristics or preferences.
- Use sales data and local demographics to make strategic changes to the menu.
- Identify employees with the skills and discipline necessary to run the second restaurant without constant supervision.
- Hire and train additional employees to provide support.
- Consider outsourcing your bookkeeping instead of trying to juggle the accounting for both locations.
- Upgrade your point-of-sale system to a platform suited for managing menu items, inventory, customer information and loyalty programs across multiple locations.
Franchise Expansion Strategies Checklist
- Review your contract to determine expansion requirements and regulations.
- Reacquaint yourself with the systems and standards for operation.
- Consult a franchise attorney for help with specifics.
- Renovate the new location to reflect the layout and branding specific to the franchise.
- Install the technology necessary for taking orders, tracking inventory and managing customer data.
- Prepare existing employees for the change.
- Train a manager for the new location.
- Hire additional employees, and train them in franchise processes and procedures.
- Implement a payroll system to manage time and wages at both restaurants.
As you proceed through these steps, your business insurance needs will change. Constructing or remodeling a building and bringing in more staff requires more coverage, and new equipment and technology should also be protected. Check the insurance and licensing laws for the city or town into which you’re expanding to ensure you’re in compliance before moving forward.
Marketing Tips for Announcing a Second Business Location
How do you get customers excited about your restaurant expansion?
It’s all in the marketing. If you want people lined up outside your door the day of your grand opening, you need to craft a strategic marketing plan to stir up interest in advance.
Reach more people with a mix of online and offline tactics, including:
- Direct mailings with promotional coupons
- Exclusive opening-day or opening-week discounts for email subscribers
- Targeted social media ads and posts
- Location-based pay-per-click campaigns
- Blog posts providing updates
- Video “sneak peeks” of the progress
- Giveaways or contests where customers can win free meals
- Visual marketing with banners and signs outside the new location
Your website also plays a key role in promotion and should be updated to include the address and contact information for your second restaurant. Make these changes on your social media profiles and in online business directories, as well, so that customers in the area can find you through search. Adding location-based keywords to site content can help you rank higher, especially for mobile queries.
Fund Your Restaurant Expansion Strategy with a Flexible Loan
From purchasing property to spreading the word about your grand opening, getting a second restaurant up and running requires a reliable source of funding. You don’t want to take the leap without enough money to cover setup and a buffer to get you through the first few months, but since even successful restaurants tend to operate on slim margins, it’s often necessary to seek help from outside investors or take out a business loan.
National Business Capital and Services offers commercial mortgage financing to provide the capital you need to purchase property for your next restaurant location and franchise financing options if you’re looking to bring a well-known brand into a new area. Whether you need $10,000 or $10 million to establish another location, an advisor from National can connect you with flexible options suited to your expansion plans.