Restaurants are like any other business venture; as they gain popularity, they tend to expand into new locations.
But restaurant expansion isn’t typically as straightforward as, say, opening new clothing store locations. Restaurants are essentially scaled-down manufacturing centres that produce precise, expeditious products. Opening a new location (let alone several locations) requires forethought, meticulousness, and a large serving of physical, mental and financial investment.
At least, those are the traditional requirements for restaurant expansion. As this article explores, contemporary restaurateurs and entrepreneurs have a choice: expand the traditional way, or embrace new concepts like delivery only restaurants. Here are the traditional and modern strategies for expanding restaurants.
Expanding a Restaurant the Conventional Way
Conventional wisdom states that you have to have a tested-and-true concept, a little luck, and a lot of investment to pull off a successful restaurant expansion.
To expand your restaurant business the traditional way, you will need to undergo, among other things:
- Profitability analysis to determine the viability of expanding
- Funding to secure enough capital for a lease/mortgage, equipment, renovations, etc. (These can be capital loans, merchant cash advances, lines of credit, etc.).
- Location scouting to find an available kitchen that fits your target demographic/psychographic
- Brand matching to ensure consistency and continuity across locations
- Menu alterations to optimize for your new kitchen space
- Hiring new staff and support
- And more
If you can stick the landing on each of these processes without overextending, you have a decent shot of expanding successfully. Unfortunately, the traditional expansion route can be risky, costly and effortful.
A Modern Strategy: Delivery Only Restaurants
During the pandemic, several restaurateurs struggled to expand the conventional way. The prospect of opening new dine-in locations amid shifting lockdown measures proved risky and expensive. And as more diners familiarized themselves with online ordering, many restaurateurs turned to a modern expansion strategy.
Recently, there’s been a lot of press surrounding ghost kitchens – kitchens that only prepare delivery meals. Some restaurateurs find success expanding with ghost kitchens, but there’s a catch: You still have to shoulder the burden of staffing and inventory, usually on top of rent and monthly fees.
There is a better way to expand your concept with delivery only restaurants. You can launch delivery only restaurants through an international network of delivery kitchens like REEF. REEF operates on a licensing model rather than exacting steep monthly fees (like ghost kitchens) or requiring massive upfront investment (like conventional restaurant expansion).
When you expand through a delivery kitchen network, the network takes care of staffing and support, allowing you to focus on the creative side of the venture: menu planning, branding, marketing, etc. They also take the effort out of location scouting; together, you will determine locations appropriate for your concept using advanced analytics and geoscoring.
We may find that this unconventional way of restaurant expansion will become the more orthodox route. In this current age, this is the more natural way for expanding your business. Restaurant digital signage was once considered an unconventional tactic but in practice, they are more efficient and overall engage more with customers than the paper-based alternative.
While some restaurateurs still prefer expanding the traditional way, the modern strategy for expansion through a delivery kitchen network is safer, less strenuous and requires minimal upfront investment. It’s ideal for entrepreneurs who believe in their food concept, and want to see their products launched in new locations without the risk.
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