Your first restaurant is successful and now are you thinking about opening a second restaurant location? Your decision shouldn’t be rushed. Opening a new restaurant branch can be slightly difficult and you need to stay prepared with licenses, funds, marketing, and a restaurant POS system that is capable of handling 2 outlets. Read more to find out how you can open a second restaurant location successfully.
When Is the Right Time to Open a Second Restaurant Location?
The right time to expand depends on several factors. First, you need to check if your current restaurant is doing well. Is it making consistent profits? Do you have a loyal customer base? These are signs that you might be ready to open a second location.
In Malaysia, the restaurant industry is growing. The food service market here is expected to grow at a compound annual growth rate (CAGR) of 6.6% from 2023 to 2028. This presents a good opportunity for expansion (Statista). However, timing is everything. Expanding too soon could stretch your resources thin.
Another sign that you’re ready is when your customers start requesting more locations. If you find customers saying, “I wish you had a branch near my area,” it might be time to consider opening a second restaurant.
What Is the Best Location to Establish?
Location matters when you want to set up a new branch. You want to be found by your customers and there’s no point in setting up your restaurant in areas where it will never be discovered. In Malaysia, urban areas like Kuala Lumpur, Johor Bahru, and Penang are hot spots for food lovers. (Johor Bahru has more of a cafe vibe, if you want to open a cafe there then that would be just perfect). These areas have high foot traffic and a diverse customer base.
When choosing a location, look for:
- Higher Foot Traffic: Busy areas like shopping malls, business districts, or tourist hubs.
- Target Audience: For example, a cafe would be more appealing to youngsters and college students, and a fine dining restaurant would perform better in posh areas like Bangsar or Mont Kiara.
- Competition: Avoid locations that are saturated with similar restaurants. However, if you’re confident your brand stands out, competition might not be an issue.
What Certifications and Licenses Do You Need?
Opening a second restaurant in Malaysia involves getting several permits and licenses. Missing any step can delay your launch or even lead to legal problems.
Here’s what you’ll need:
- Business License: Every business in Malaysia gets registered either online or offline. You can easily make the payment online to get your business registered on the SSM website. The minimum duration is 1 year and the maximum is 5 years and this is the time when your license will be valid.
- Halal Certification (if applicable): If your restaurant caters to Muslim customers, this certification from Jakim is essential.
- Typhoid Vaccination: All the people in your restaurant who are handling food need to get this vaccine. It is important to assure your customers that your place is safe.
Make sure you allocate a portion of your budget to cover these expenses.
How Do You Secure Financing for Expansion?
Expanding a restaurant requires significant investment. From renovations to marketing, the costs can add up quickly. In Malaysia, small and medium enterprises (SMEs), including restaurants, have access to various financing options:
- Bank Loans: Malaysian banks often offer SME loans with competitive interest rates.
- Government Grants: Check for grants like the SME Digitalisation Initiative, which can help cover certain costs.
- Personal Savings: While risky, investing your savings shows confidence in your business.
- Investors: Partnering with investors can help share the financial burden.
For example, if your first restaurant costs RM200,000 to set up, expect to spend at least RM250,000 on your second location. Always have a financial cushion for unexpected expenses.
How to Maintain Quality and Consistency Across All Your Restaurant Locations?
When your customers were asking you to open a second restaurant location they were expecting you to give them the same taste and service across the second restaurant location as well. Now, I know that it’s difficult for you to get the same taste but what if I tell you that this is achievable? If you EasyEat POS system you will be able to standardize recipes in both restaurant locations. Whenever your chefs make a dish, for example, they are making an omelet, whenever they take eggs and spices from the inventory, they will be automatically deducted. They won’t be using different quantities of ingredients every time.
Another fun thing that you can do with EasyEat is you can give your customers coupons for dining that they will be able to redeem at any of your locations. Sounds cool right?
Lastly, you need to manage both your outlets simultaneously and for that purpose, you need to have EasyEat. It will let you get important insights like your sales data and the best-selling items from your menu. This will help you in changing the direction of your efforts.
How to Market Your New Restaurant Branch
So, your existing customers are covered, now it’s time to find new customers. Find some local influencers with whom you can collaborate and promote your restaurant. There will be some small and medium-scale influencers who will fit into your budget. If the excitement is still not sufficient then you can have some exciting events.
The next thing that I would suggest to you is that send them promotional SMSs. You can write something like ‘Now you can find us in..’, along with this send them coupons or discounts.
It’s exciting to open a second restaurant location. But, if you get the strategy right then nobody can stop your second restaurant from becoming a success. The basics remain the same for your second restaurant too. You need to secure financing, get all the necessary licenses, choose an apt location, market your restaurant the right way and get a restaurant management software that will help you in managing not only your first location but also your second restaurant location.
FAQs
- How do I open a second restaurant?
Start by evaluating your first restaurant’s performance. Conduct market research to identify the best location. Secure financing, obtain necessary licenses and hire a team. Use marketing to build awareness before your grand opening.
- Where is the best location to establish the restaurant?
The best location depends on your target audience. Urban areas like Kuala Lumpur, Penang, and Johor are ideal due to their high foot traffic and diverse customer base.
