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Restaurant’s Expanding in 2021: The Foundation for Success

As we journey back from the disruption brought on by the pandemic, there is one word that defines the restaurant industry better than most: Resilience. According to Oxford Languages, resilience means “The capacity to recover quickly from difficult conditions; toughness.” Of course, this past year was one of our toughest ever, but many of the restaurants that made it to the other side are now experiencing great demand.

In June 2021, restaurant sales reached $70.6 billion, an all-time high for the fourth month in a row, with average check values up by 20% compared to pre-COVID-19 averages. In this current environment of growth and demand, restaurant operators are taking the opportunity to expand, with almost 6,600 new restaurants and food businesses opening in May 2021.

As owners consider expanding their restaurant empire, there’s a few universal truths to keep in mind, ones that lead to success for any growing business enterprise: A clear vision, compelling culture, data-driven expansion, and knowing your market.

A Clear Vision

While some restauranteurs create a new brand for each new location, most build their brand across multiple units. If this is true for your expansion plans, your customers will be expecting the same value, quality, and service across all locations. To accomplish this, you’ll need to develop a clear vision of who you are and what you stand for.

There’s a reason why guests spent about $6 billion at Chipotle in 2020, despite a raging pandemic. When you walk into this popular Mexican grill, you know what your menu options are, that they have developed solid supply chain traceability and that they’re committed to fresh food, responsibly raised meat, and local and organically grown produce when available.

Compelling Culture

One of the most significant challenges expanding brands currently face is attracting employees. Restaurants that have built a brand’s reputation as a great place to work, one that cares for their employees, and offers advancement opportunities find a greater labor pool to choose from.

Glassdoor’s analysis of the 10 best places to work in the U.S. in 2021 listed one restaurant, In-N-Out Burger. A few of the employee accolades included feeling cared for, great leadership, and pride in the company’s food.

InHerSight’s list of the top 20 restaurants for women employees, Tupelo Honey Café, Bad Daddy’s Burger Bar, Tijuana Flats, and Brinker International—the parent company of Chili’s Grill & Bar and Maggiano’s Little Italy—made the top eight. Some of the positive reviews for these restaurants included providing equal opportunities, a respectful culture, flexible hours, and growth within the company.

Data-Driven Expansion

A restaurant’s success is based on growth and demands regular assessments and a secure financial footing. While you can see growing demand and know customers are returning, you also know that supply chain disruptions and labor shortages have increased costs. Did you raise your menu prices or change recipes and items as costs escalated?

The only way to manage a restaurant’s financial health is through data. A few of the vital performance metrics every operator should view include the break-even point, Cost of Goods Sold, prime cost, food cost, and gross profit. Compare your data with restaurant benchmarks the industry standards. For instance, the benchmark for food costs is about 28.3% for full-service restaurants. How does your restaurant compare?

Know Your Target Market

For some restaurants, it’s relatively easy to determine their target markets. For example, a restaurant catering to college students knows they must be within so many miles of higher education institutions.

In essence, restaurant operators need to know who their VIP and core customers are. Then, when they’re expanding, they can analyze potential neighborhoods and their demographics to help them identify the best markets and sites. According to Acutely, VIP customers spend between 5-10 times more each year than infrequent guests.

This data-driven restaurant solutions company helps restaurants determine their VIP, Core, and Infrequent customers and uses demographics to help restaurants achieve greater return on investments and grow their brand in a manner that ensures success.

Are you ready to take the next step and add additional units, or do you need a stronger foundation before breaking into more markets? As Louis Pasteur said, “Chance favors the prepared mind.”

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