When Should You Open Another Restaurant Location? (Flowchart)

If you’ve built up a successful restaurant, then you definitely have reason to celebrate. It’s impressive to be among the 50 percent of small businesses that make it past year five. 

Maybe your customers are complaining about waiting too long or having to travel long distances. You’re probably also seeing strong profits and consistent cash flows. But how do you know when it’s time to take a leap and open another location? 

Sure, your restaurant could benefit from another location. You could attract new customers, increase your brand recognition and popularity (though this shouldn’t be your primary reason for expanding!), and even negotiate some good discounts from your suppliers if you significantly increase your product orders. 

However, your restaurant could also suffer. Accounting becomes more challenging with two locations. If you’re not careful, you could cannibalize your original location. To prevent this, many small business experts recommend treating another restaurant location as a separate business and seeking outside sources of funding. Whatever you do, don’t take too much cash out of your original location!

And of course, you’re valuable as a restaurant owner! Is there someone you trust to take over the day-to-day operations for a couple of months while you open a new location, or will your original location suffer? 

Fundera created a flowchart with helpful questions to decide if opening a new restaurant location is right for you.