How to Run Multiple Restaurants: 5 Challenges and Solutions
Running a restaurant business is a labor of love. It involves long hours and dealing with a lot of uncertainty about whether or not your business will withstand the long haul.
If you’re one of the lucky operators who has achieved success with your first restaurant, you’re probably thinking about expanding and looking into how to run multiple restaurants.
Fortunately, you’ve come to the right place. Keep reading to learn the benefits and challenges of running multiple restaurants, and how to overcome them. We’ve included expert insights from veteran restaurateur and chef Matt McMillin of Cooper’s Hawk Winery & Restaurants.
Benefits of Opening Multiple Restaurant Locations
Growing your restaurant by opening more locations of a proven concept or branching out to new concepts can be the logical next step if your business is doing well. Let’s explore some of the benefits.
Opening a new restaurant location extends your brand. By duplicating your existing concept yourself or by franchising, you’ll reinforce your brand through the consistency of your dishes, service and space. If you’re opening a new concept, you’ll be able to extend your brand while maintaining its hallmarks, such as values, quality and service.
Take inspiration from Ox and Finch and Ka Pao, two restaurants run by the same team in Scotland’s largest city, Glasgow.
Ox and Finch, which appears on Michelin’s Bib Gourmand list, came first and serves Mediterranean-style tapas with a modern twist. Five years later, the team opened Ka Pao, which serves Southeast Asian small plates.
While the restaurants serve completely different cuisines, and Ox and Finch looks like a rustic farmhouse while Ka Pao has tropical decor, the two concepts have several things in common that strengthen the brand: consistently delicious food, impeccable service and a commitment to innovation.
More locations bring more opportunities to generate revenue. With each additional seat comes the chance to boost sales through table optimization and upselling.
With multiple restaurants, you can also serve customers in ways you may not have been able to before. For example, you might have the space and manpower to begin selling food products, such as jarred sauces, which customers can take home or send as gifts.
Opportunity to Try a New Concept
If you want to build a hospitality group, it’s tempting to replicate your original concept. However, learning how to run multiple restaurants is an opportunity to try something new. Rather than trying to carbon copy your restaurant, why not launch a new concept?
You already know the work that goes into running one restaurant. While expansion is an exciting prospect, it’s also a risky and expensive move. Do you have what it takes to build a restaurant empire? Below is a list of solutions to common struggles operators face when they’re learning how to run multiple restaurants.
More Demanding Marketing
“Build it and they will come” isn’t a marketing plan. You need to create a marketing strategy to spread the word about any new restaurants you open.
Restaurateur and chef Matt McMillin of Cooper’s Hawk Winery & Restaurants says “social media [was] huge” while expanding his brands.
“Every day we’re out there posting about what’s going on with our company, aligning it with what’s trending: Pinot Day, National Hamburger Day, Favorite Wine, etc. We saw an uptick in our special sales when we started doing food photography and published videos of us preparing the specials every month.”
When you run one restaurant, managing your own social media and marketing is doable. With a multi-unit restaurant, however, you should hire an in-house marketer or outsource to a freelancer.
Automate as much as you can. SevenRooms’ marketing automation solution makes it easy to set up regular communication with your guests. You can automatically send out emails such as post-visit thank you messages and reminders to those who haven’t dined in a while to come back in.
Another strategy for spreading the word is cross-marketing your different locations through your reservations platform. If guests can’t get a table at your original restaurant, recommend other restaurants in your portfolio that are available.
On its reservations page, Washington, DC’s The Duck and the Peach cleverly cross-markets its neighboring sister establishment, The Wells, by inviting guests to make a reservation for pre- or post-dinner drinks.
One of the most important things you’ll discover while learning how to run multiple restaurants is that you can no longer wear every hat and do everything yourself. Losing control is scary, but it’s a skill you need to develop to run a successful restaurant group.
Delegate to people you trust. Hire strategically by finding people whose values match yours. If needed, hire a CEO so you can focus on your primary strength, whether that’s cooking, design or operations.
McMillin advises that even when you grow your team, it’s important to stay in the loop.
“We visit each restaurant and talk frankly about what’s going great, and what’s maybe not going so well. If there’s a problem, the staff will know about it before we do,” he explains.
Another challenge restaurateurs face during restaurant expansion is maintaining consistency in food and service quality between locations. You overcome this struggle by creating processes.
Writing down your recipes, rather than making dishes from a gut feeling, is one way to systemize your restaurant as it grows. Chef McMillin credits technology for helping his kitchens maintain consistency.
“In the back of the house, we have a system that houses all our recipes. Every restaurant around the country has the same information. We train shoulder-to-shoulder, but this system allows us to push out our specials, our chef recommendations and any new menu items for the wine club dinners we do every month. This way, they’re readily available usually about six weeks before our staff even has to run them. The team can print them, download them, look at them and practice if they need to. I could be on a mountain in Thailand and make a change to the menu that pushes out to every restaurant at the same time. That’s pretty cool,” he says.
A thorough training program and employee handbook can also ensure that every team member, at any location, gets the same level of training and can provide guests with the quality of service you expect.
Looser Relationship With Customers
When you have one restaurant, it’s easy to maintain close relationships with customers. You see your regulars often and know their orders and table preferences. However, when you open another location, you can’t be in two places at once, so it’s harder to develop and maintain relationships with guests in the same way.
Fortunately, an enterprise CRM like SevenRooms can help you create relationships with guests, no matter where in your portfolio they dine. All guest information, such as order history from your POS system and reservations history, gets pulled into that guest’s profile within your CRM. Team members at any location can access your customer database, so anyone on the team can recognize a regular, even if it’s their first time at your new location.
Staff turnover is notoriously high in the restaurant industry. According to a study by 7shifts, on average, employees leave every 110 days. Turnover is costly from a productivity perspective, and this loss hits even harder when you have multiple locations and more employees. A lack of recognition or opportunities for advancement are some of the main reasons why restaurant employees leave.
Fortunately, when you have multiple restaurants, you can create new positions and promote internally to retain staff and your management team. For example, you could open up a new role like a Director of Vendor Management to ensure inventory arrives on time and negotiate vendor contracts.
As for the restaurant management recognition problem, McMillin has a solution.
“As a values-driven organization, we care about our people first and foremost. We recently launched a program where we go to every restaurant and hand out bottles of wine etched with the employee’s name on their ten-year anniversary. Once a year, we bring our general managers, area culinary managers and leadership team together for a retreat,” he says.
Something as small as a personalized bottle of wine can make staff feel valued and want to stay with you as you open more restaurants.
Expand Your Restaurant Empire
Technology can help you ensure lightning strikes twice as you learn how to run multiple restaurants. From guiding you through processes and automating marketing, to helping you keep tabs on guests and staff, tech makes it easier for busy restaurateurs to do more with less.
Book a demo to learn how SevenRooms can help you acquire, engage and retain guests as you grow your restaurant empire.
FAQs About How to Run Multiple Restaurants
1. How Much Money Do You Need to Open a New Restaurant?
The average cost to open a new restaurant is $375,000, according to Restaurant Owner. Opening costs range from $175,000 to $750,500.
2. How Many Restaurants Do You Need to Own to Be Considered a Chain?
The key to becoming a chain is creating a consistent restaurant concept among multiple locations, so you can have a chain with as few as two restaurants.