Restaurant Expansion Strategy: How to Grow Your Restaurant Business Into a Successful Foodservice Empire

So you’ve got a couple of successful locations under your belt, and now you’re thinking about growing your restaurant business?

Kudos to you — great things happen to those who act. And nothing says you’re taking action as much as taking steps to accomplish your growth goals.

That said…

Managing a dozen or more locations is not the same ballgame as managing a couple of them.

In fact, it’s not even a ball sport — it’s a bloody, bloody contact sport where you’re always a quick jab away from losing a tooth.

You already know this, right?

With two locations, you’re always there. On the ground. You’re keeping an eye on everything from your processes to your people, and you’re close at hand when a problem needs fixing.

When you’re running double-digit locations… well, you aren’t doing that.

You can’t because there aren’t enough hours in a day.

Once you get to this point, you should have meticulous, data-driven plans and forecasts. AND error-proof (and human-proof) processes and systems. Most importantly, your team has to be able to be in control and manage restaurant expansion in a single dashboard.

In short, if you want to scale your restaurant business beyond a couple of locations, your restaurant growth strategy should include:

• a solid foundation
  (before going all-in on scaling your restaurant business);
• a mix of corporate and franchise expansion
  (it’s definitely worth an exploratory poke);
• and the right tech stack
  (it’s second only to the right location when it comes to success).

Luckily, that’s exactly what you’ll learn in this post.

Got your knife and fork? Great, let’s dig in.

Grow Your Restaurant: Set Up an Ironclad Foundation First

Hone your concept, processes and finances. If you don’t, you’ll only multiply the ways in which you are losing money.

There’s no point in scaling an unhealthy, messy business.

Do that, and you’ll simply multiply all the ways in which you’re losing money… and you’ll be crushed under them.

So… avoid that by focusing on your foundations.

Everything from managing your inventory to staff training and purchasing protocols needs to be inspected, standardised, perfected, and documented.

Here’s a small list of things that you need to nail (in no particular order) before you start growing your restaurant business:

• Know your concept — figure out what makes your business distinctive — what makes it tick — and lean into those advantages when scaling. Is it a signature dish? Make sure you bring it to every single new location. Is it your lightning-fast delivery? Open only those locations that allow you to replicate that. Is it your super-friendly and witty FoH crew? Make staffing and training a priority.
• Work on your finances — when you think you can support growth with your balance sheet capital — give it a bit more time. You want to be waaaay there in the green before scaling your business. Why? Well, because if anything’s true, it’s that scaling ends up costing double the amount you originally budget for it. And takes double the time sometimes, too. If you’re bankrolling it personally (or with a loan), make sure you can stay afloat if things go south.
• Hone your processes — I mean, really hone ’em. Everything from managing your inventory and waste to staff
  training and product development needs to be inspected, standardised, perfected (and then some), polished, and written down. The goal of it all is to get a blueprint that allows you to a) keep your food costs low, and b) find profit leaks and plug them. Once you have that blueprint, you can lift it wholesale and deploy it at every new location. Then, it’s just a matter of fine-tuning it to specific needs.
• Have an A-list bench — it takes a freaking village to grow a restaurant business. Even if you end up selling franchises (more on that below), you still need to commit a good chunk of time getting that place set up properly. This goes a lot faster (and requires less of your time) if you have an experienced team on board.
• Aim for consistency — scratch that… don’t aim for it — get it nailed down 100%. Flavours, experiences, service — they all need to be in sync across your operation before you add any more moving parts to the whole thing.

Recommended reading: Guide to F&B Inventory Management for Multi-Unit Restaurants

Think About (& TEST!) Your Locations Before Going All-In

What criteria should you take into account when scouting locations?

Location, location, location.

This real estate trope holds so true for the restaurant industry. Every single business owner I’ve talked to about restaurant scaling immediately went to ‘location’ the moment I asked the question.

Every. Single. One.

And highly successful, world-renowned operators harp about it on international TV:

You can luck out on your first two or three location choices. Heck, you can even luck out on your first dozen. But getting one of them wrong can put you in a financial hole so deep that it sets your restaurant expansion goals back a good year, if not more.

Why?

Because rent costs serious money. It’s your biggest fixed expense, and it can easily be anywhere between 5 and 10 per cent of your sales. That’s no peanuts… it’s the difference between running a profitable gig and boarding up your windows.

When choosing a new restaurant location, here are five things to keep in mind:

1. Your concept fits the location — don’t open a burger joint on a high street where your rent is € 10,000 per month. With a 10-euro average check amount, you need to sell 1,000 burgers just to cover your rent. And then 2,000 more to break even.
2. You’re ready to go the first minute — these days, you don’t have the luxury of a slow month where you settle in, train your new crew, and iron stuff out. The minute you open, things need to be up to scratch — interiors, design, equipment, staff, training, restaurant inventory management software… the whole shebang. If you did your marketing right, your customers will come. And if your new location is not rearing to go, your Yelp rating will reflect that.
3. There are restaurants there already — and, yes — you want them to be there. If they’re not, that means that they were at some point, but they went under. This is a red flag — you should open here only if you’re 100% sure that there’s plenty of your ideal audience in and around this place. Don’t be afraid of some light competition — if your concept is unique enough, it will carry you through.
4. Delivery is not (too) complicated — sometimes, a location can look great, but the logistics just don’t work out. You have to think about procurement and delivery — if you can’t get the inventory that you need consistently, you start accruing small slip-ups that eventually damage your overall brand reputation.
5. You’ve done a low-cost test of your menu — there are zero excuses for not testing your menu in this day and age. Go to the country/city/neighbourhood where you want to open a new location. Rent out a cloud kitchen (or set up a small pop-up location). Put your meals up on Wolt, Deliveroo, or Postmates. Now you just need to give yourself some time to test the waters. After a month or so, you should have a pretty clear idea of whether your items will swim or sink at that location.

Recommended reading: 8 Cloud Kitchen Best Practices (& 3 Pitfalls You Need to Avoid)

Consider a Healthy Mix of Corporate & Franchise Expansion

Preparation is everything when franchising your restaurant concept.

Don’t get stuck thinking that you need to own every single aspect of your growing restaurant business.

You don’t.

You can just as easily grow your restaurant business and launch your winning concept into the world (particularly internationally) through franchising. Actually, it’s easier to expand through franchising because you won’t have a new ongoing commitment with every location.

However, don’t make the mistake of thinking that selling a franchise is easy. Or that it doesn’t require any work on your part besides signing a contract. As a franchisor, you get a bit of cash upfront for your brand and business model. But, you make the real money by taking a cut of profits (anywhere between 4 and 12 per cent) from the franchisee every month.

That’s why you want every new franchise location to be a smashing hit.

Here’s how you get there:

• Choose your franchise partners wisely — fresh-off-the boat entrepreneurs, people looking for a career change, and retirees are not good franchise partners. They often lack drive, experience, and passion for foodservice, all of which are required to make this work. Choose people who have at least some experience working in the restaurant industry. Also, focus on franchisees who want to operate multiple locations instead of one-offs — they’ll become more independent with every new opening.
• Write down your SOPs, processes, and everything in between — give the franchisee all the tools they need to be successful. This means writing down and codifying everything that works in your current locations, from back-of-house operating procedures to your allergen management strategy. This is extra upfront work for you, but it makes success more likely for your franchisees.
• Invest time & money in guidance and training — your franchisee will need a lot of hand-holding and support, especially in the beginning. Be there for things like location selection, choosing real estate partners, and staffing. Explain what makes your concept work, and train them on how to replicate your results for themselves.

And one last thing — don’t rush into franchising.

Your goal is to open successful and profitable locations. Since you’ll be investing a lot of time in the early stages of each franchise, you don’t want to spread yourself too thin. If you do that, you risk botched launches, slow early months, and locations closing. And every time a location closes, your reputation takes a hit.

Avoid that by growing your restaurant brand slowly but steadily.

Choose a Tech Stack That Supports Restaurant Growth

Apicbase is the single of source of truth for f&b in multi-outlet operations.

All those things I talk about at the beginning — pitch-perfect processes, centralised management, bulletproof business insights — all of this is easier to reach with technology.

How much easier — 2x or 10x as easy — comes down to your tech stack.

If you want your software solutions to facilitate and speed up your restaurant scaling, your tech ecosystem has to be:

• Cloud-based — having up-to-date data is crucial to running a successful operation. But, when you’re growing your restaurant business, it’s even more crucial that you have immediate access to every bit of data from everywhere. And that it’s comparable. And that every stakeholder (from your dev chef to your F&B manager) has access to it.
• Platform-based — a good restaurant management platform has all the rudimentary tools that you need to run an insights-informed business (from kitchen management to personnel management). But, one of its biggest advantages is that it can be built on. If you need a more robust staffing and training software, you can integrate it so that it communicates with your central platform. This helps you standardise everything so that you get valuable information that’s applicable across your operations.
• Grows with you — while it’s true that robust, all-in-one restaurant management solutions don’t come cheap, what’s even more expensive is completely overhauling your entire BoH management system. Especially in the middle of a big scaling push. This is where modular solutions come in. The idea is that you use the essentials while you’re still building out your business (modules such as product management, inventory, and analytics), and expand on them when it makes operational sense (for example, smart ordering, HACCP tasks, or staff training modules).

Apicbase Ticks All Boxes

Apicbase is the most complete F&B Management Platform for multi-unit restaurants, hotels, ghost kitchens and large scale catering, giving you:

• A single source of truth for all things back of house
• No more data silos — no matter if you run 3 or 30 locations
• No more time-consuming spreadsheets
• A heavily reduced food cost & waste
• Controle over your menus, inventories and supply chain.

Scale Your Operations Faster With the Right BoH Solution

Grow your restaurant biz with Apicbase like a pro. Keep your costs under control, eliminate waste to grow your revenue by & have a system in place that’s scale-ready at the drop of a hat.

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