Gina Von Ah (front and center), owner of La Estrellita Mexican Restaurant in Brighton, Colorado, is joined by managers Crystal Martinez, Manuel Venzor and Andrea Munoz.
By Ed Avis
Rumba Cubana Restaurant & Bar in New Jersey opened its fourth location in Clifton about a year ago, and a location in Jersey City will open in August. A sixth location, in Rochelle Park, is in planning stages. The restaurant, which focuses on quality Cuban food and top notch service, is clearly on a growth trajectory.
“It’s been in the game plan to expand for a while,” says Leo Castro, the general manager. “Allen [Lopez, the owner] looked at these markets and realized there were no other Latin restaurants with our ambiance, quality of food, and highly trained staff.”
Finding the right spot for a new restaurant location, as Lopez and Castro have done, is one key step in the decision to expand. But it’s not the only one: Restaurant owners who are experienced in launching new locations say that other keys to expansion success include having well-tested and documented procedures and systems; well trained staff; and a concept that is ready to expand.
Learning the Hard Way
Gina Von Ah owns La Estrellita Mexican Restaurant in Brighton, Colorado, which her father opened in 1986. The restaurant opened three new locations in the subsequent eight years.
“We expanded because we had the sales, money was coming in, and things were great,” Von Ah says.
However, after a while it became difficult to maintain consistent operational systems in all four locations, Von Ah remembers. For example, the recipes started to vary from the originals, making it hard to deliver a consistent product. They closed one of the new locations after just two years, and by 2011 they had closed the other two new locations, pushed along by the recession.
Today the original location is going strong, and Von Ah is in charge and considering expanding again. But this time she will apply the lessons learned from the previous expansion.
“Once the other restaurants failed, we decided all our systems needed to be defined and in writing,” Von Ah says, adding that they’ve added an element of accountability to the systems. “You can have all the systems in the world, but if you don’t have accountability with them, the system is not worth anything.”
Among the written documents that Von Ah now uses are training manuals that ensure staff are knowledgeable about the restaurant’s processes, and checklists that people are required to use. Another written document is the recipe book – cooks are required to use the recipe book even if they’ve prepared a certain dish repeatedly, Von Ah says.
“We also have a cleaning checklist, an opening manager checklist, and opening server checklist, and others,” she says. “Everyone has to do them and sign them. If you don’t use checklists, people are going to miss things. They’re all human.”
Castro is also a fan of documenting procedures. Before expanding to Jersey City, he developed a new employee handbook to ensure that all employees at Rumba Cubana’s locations were equally smart looking and informed about standards.
“The handbook covers the expectations of attire, how important it is not to wear cologne, the cleanliness of your nails, the importance of being well groomed, etc.,” Castro says. “It also includes alcohol awareness. We want our servers to know that Rumba Cubana is a place where grandmas and grandpas and families can come enjoy themselves; they need to be aware that we’re not focusing on buddies coming in to do shots and get drunk.”
Another type of documentation at Rumba Cubana is a maintenance and facilities checklist. This includes monthly inspections of every table and chair in the restaurants, the air conditioning and refrigeration units, the doors, the lightbulbs, the landscaping, and other elements of the facilities. A report is due at the first of the month, and if needed, handymen and landscapers are called in to fix any deficiencies.
The Right Location
Every real estate professional has the same mantra when it comes to opening a new business: Location, location, location. Carlos Rodriguez, owner of La Cazuela Restaurants in the Atlanta, Georgia area, knows the truth about that first hand.
“You might think you have a great concept and it’s going to go well no matter where you open a new location, but really that’s not true,” says Rodriguez, who owns three La Cazuela locations, down from 10 a decade ago. “You have to be very careful about where you go.”
La Cazuela grew quickly in the 1980s as Mexican cuisine took off in Atlanta, and Rodriguez was regularly approached by developers who wanted him to open a location in their shopping malls. And when the market became saturated and the recession slowed the flow of customers, shopping mall owners began offering him locations that previously held other Mexican restaurants that had failed. On paper the deals often looked good – sometimes even six months free rent -- but in reality not every location is right.
“If the new location comes too easily to you, especially if it’s the location of a failed restaurant, watch out,” Rodriguez advises. “I’ve seen locations that had five failed Mexican restaurants in a row.”
In Rodriquez’s case, having 10 locations eventually proved too many, especially with a growing family that required his attention. He has pared down to the best-performing locations.
One piece of advice he offers on finding a new location is to consider meal times. Some locations may be great for lunch only, and others for all-day service. If you figure that out in advance – for example, a location surrounded by offices will be good for lunch but not dinner – you can set up your new location to meet the needs of those customers.
The overall economic strength of the neighborhood you’re looking in is also important.
“If your neighborhood is continuing to develop, with decreasing vacancy rates in local housing and the introduction of new businesses, you might consider expanding,” says Parris Sanz, CEO of CAN Capital, which provides funding for expanding restaurants. “On the other hand, if your market is saturated with restaurants and not a day goes by without an ‘Out of Business’ sign popping up in one of your competitor’s windows, it’s likely time to hold off on growth.”
Prepare Your Staff
Having well-documented procedures and a great new location are important, but another important step is preparing your staff for the expansion. This should include training enough managers, servers, and cooks in your current locations who can move to the new locations.
And make sure that you personally will not have to carry the burden of managing both locations yourself, Von Ah stresses.
“You need to make sure your first location is able to survive without you, because the new location will take up most of your time,” she says. “You should have some people you can pull away from the first location to help you open the second.”
A Concept that Can Travel
Finally, before taking any steps towards expansion, make sure you have maximized the efficiency and systems of your first location so that your concept is ready to grow.
For example, Rumba Cubana tweaked many characteristics of their concept – everything from their logo to the employee uniforms to the size of the ice cubes in the mojitos – before expanding into Jersey City.
“We also fine-tuned the sound, so that people can hear the music in the background but still have a nice conversation with each other,” Castro says.
And don’t overlook profitability.
“You have to make sure you’re maximizing the profitability of your first restaurant before opening the second,” Von Ah says. “We have quadrupled our sales since I took over the Brighton location in 2011, but I feel we can still do more tweaking before we open the second location. But I do have realtors looking for a new location!”
Ed Avis is the publisher of el Restaurante. Contact him at edavis@restmex.com