Create a realistic timeline
Opening a new restaurant location is not an overnight endeavour. While 98% of surveyed executives felt prepared for their last expansion, the process typically takes time. Seven in 10 executives (71%) said it took up to a year to open their most recent location, with 55% completing the process within six to 11 months. Only 16% managed to launch in under six months.
Several factors influence the timeline, from real estate acquisition to navigating regulatory hurdles. Understanding these steps ensures that restaurant owners can anticipate delays and plan accordingly.
1. Select and acquire real estate. Selecting and acquiring real estate is a crucial step in restaurant expansion, with 25% of surveyed restaurant leaders identifying it as the most time-consuming part of the process. The top factors influencing their decisions were neighbourhood choice (73%) and premises availability (73%).To prevent costly delays, start scouting locations early, factoring in contract negotiations, permits and potential timelines associated with your construction and interior design plans. Investing time in this stage can lead to a smoother launch and long-term success. Remember: Carefully assess foot traffic, local demographics and competition to ensure your new site aligns with your target market – we’ll talk about this more later.
2. Understand restrictions and red tape. Understanding restrictions and red tape is essential for a smooth restaurant expansion. More than 74% of executives cited zoning restrictions as a major hurdle, with many underestimating the complexity of permits and licensing processes. Delays often stem from bureaucratic inefficiencies, unclear regulations and lengthy approval processes.
To stay ahead, research local laws early, consult experts and establish a clear understanding of compliance requirements. One executive shared their frustration: “The toughest challenge was the bureaucracy – so many forms, departments and regulations. It felt like an endless loop of red tape.”
By anticipating these challenges and preparing accordingly, restaurant owners can navigate the process more efficiently and reduce the risk of significant delays.
3. Raise capital. With 76% of executives saying raising enough money to open was a challenge they faced in a recent expansion, it’s good to know your options. You could self-fund through existing restaurant proceeds, work with private equity investors or take out a loan. Learn more about different funding options to make the best choice for your team.
4. Look into new equipment and technology. Investing in the right technology is crucial for improving operational efficiency, employee retention and customer experience. And as restaurants scale, their technology must evolve to keep up with increased demand. Over half (55%) of surveyed executives retained their existing POS system, while many also kept invoicing (51%), loyalty programmes (49%) and mobile POS solutions (49%).
However, expansion often requires additional tools. To meet the demands of a larger operational footprint, the most commonly added systems included online ordering and delivery platforms (48%), kitchen display systems (46%), marketing software (46%), mobile POS solutions (45%) and invoicing technology (43%).
Carefully assessing your technology needs early can prevent disruptions and set your business up for long-term success.
5. Build and train your team. Expanding to a new location requires strategic staffing adjustments, from hiring leadership roles to onboarding frontline employees. Clearly defined job descriptions, structured training programmes and user-friendly technology can streamline the process.
Investing in staff training ensures employees are well-prepared to deliver exceptional service, which is essential for creating a positive first impression and fostering customer loyalty in your new location.
