Expansion Guide
How to Open Your Second Restaurant
Your first location is working. Now you're thinking bigger. Here's the checklist that separates successful expansions from expensive failures.
Expansion Consulting →
Expansion Guide
Your first location is working. Now you're thinking bigger. Here's the checklist that separates successful expansions from expensive failures.
Expansion Consulting →Readiness Assessment
Your restaurant is ready to expand when: first location is profitable for 12+ consecutive months, prime cost is consistently under 60%, you have documented systems that work without you, cash reserves cover 6-12 months of new location expenses, and you have management depth to run two locations.
If you can't check all these boxes, you're not ready. Expanding too early is the #1 killer of restaurant groups. Fix your first location first.
Budget Planning
Opening a second restaurant typically costs $175,000-$750,000 depending on concept, location, and buildout requirements. Budget for: buildout ($100-$300/sq ft), equipment ($50K-$200K), initial inventory ($15K-$40K), working capital (3-6 months expenses), and pre-opening costs ($20K-$50K).
The hidden cost: Your attention. While you're focused on opening #2, location #1 often slips. Budget for management support or accept that both locations will underperform during the transition.
The Process
Before anything else, confirm your numbers support expansion:
If it's not written down, it doesn't scale:
Line up funding before you need it. Options include:
Analyze every factor before signing a lease:
You cannot be in two places at once:
Avoid These
Your first location had one good year. That's not enough. Wait for consistent profitability across multiple years or seasons.
Every expansion costs more than projected. Budget 20-30% contingency and have backup funding available.
If your success depends on you being there, you can't replicate it. Systems must exist on paper, not in your head.
The cheapest rent is often the worst location. A better location at higher rent usually outperforms a bad location at low rent.
You'll burn out and both locations will suffer. Build management depth before you expand, not after.
While you're distracted with #2, #1 slips. The cash cow that funds expansion starts losing money. Plan for coverage.
Common Questions
Opening a second restaurant typically costs $175,000-$750,000 depending on concept, location, and buildout requirements. Budget for: buildout ($100-$300/sq ft), equipment ($50K-$200K), initial inventory ($15K-$40K), working capital (3-6 months expenses), and pre-opening costs ($20K-$50K).
Your restaurant is ready to expand when: first location is profitable for 12+ consecutive months, prime cost is consistently under 60%, you have documented systems that work without you, cash reserves cover 6-12 months of new location expenses, and you have management depth to run two locations.
The biggest expansion mistakes are: expanding before the first location is truly stable, underestimating capital requirements, lacking documented systems, choosing location based on rent alone, and trying to run both locations yourself without management support.
Open a second company-owned location if you want full control, higher per-unit profits, and can fund it yourself. Franchise if you want faster expansion, shared risk, and can handle the legal/regulatory complexity of becoming a franchisor.
We help restaurant owners avoid the expansion mistakes that sink profitable concepts. Let's talk about your readiness and options.