For most of the QSR or cloud kitchen brands, operating in just one location has never been on their business plans. Taking cues from any known QSR or cloud kitchen chain, after their first outlet is operational, they quickly scout for different locations, in different cities. And many can be seen announcing a launch in multiple cities in the same time. 

Talking data, over the past five years, the multi-location brands in India have grown by 3.5 percent. In the same timeframe, the number of multi-location businesses has grown by 2.7 percent and the number of employees has grown by 3.5 percent. But, before one dive into multi-location ownership, there are a few to-dos to consider. And especially for QSRs and cloud kitchen formats, larger visibility leads to better business numbers.

Finalise funding

One can’t open a new business without capital. Will you be funding the new business yourself, or will you rely on business loans to get started? Before you dive into your options, you should first and foremost make sure that the outlets that are currently in operation are in good standing. Once you’re comfortable with your finances in your current business, you can start exploring the best way to fund your new experience.

You may find yourself seeking help for your new endeavor in the form of business loans. Taking out a loan to help cover the cost of the purchase, as well as for working capital, renovations, or expansion is a common maneuver but it does require thoughtful planning and consideration. If you are comfortable with paying back thousands in interest in order to get started sooner, business loans could be the right option for you.

The best thing about opening a second or twenty-second location is that you already know how much money it takes to successfully open and operate a new business. Use this knowledge as guidance through your decision-making process. Whether you’re using the glorious profits from your first business or seeking a loan to make your new dream come true, it will be helpful to take a look at how much money you put into your first restaurant that helped make it what it is today.

All about scalability

When looking at cloud kitchens, it's all about scaling the business. For financial viability it is extremely important that you have an optmised kitchen space usage. A single brand being operated often can be a death sentence for a cloud kitchen. More appropriate would be to have two, sometimes three or more brands operating out of the same kitchen space.

“It's a constant race against time. The key to a strong scaling process is to set your first brand, make it viable on the books and then replicate the same for the next set of brands. Furthermore, locations help a lot too. A single kitchen tends to cater to a 5 Km radius in an optimal manner. Both logiscally and quality wise. So to make the numbers work well for topline, adding multiple kitchens across the city is a key factor. It helps cater to a wider geography and a far wider demography,” Arush Malik, Co-founder of Narcos pizzeria commented. 

For an outlet to become a brand it is key to have a presence at multiple locations of the city. Taking it pan India is a whole other ball game altogether. Having centralised zone kitchens is one way to do it, as consistency is key for future growth. 

Consistency is the key

The food needs to have the same taste, doesn’t matter which city you have it in. The other way is to make city based centralised kitchens where from all your basic prep is carried out and sent to all locations in that city.  “It's not possible for the corporate chef to be at all locations at the same time, in a way to make it easier operations wise any one of these methods needs to be followed. It’s a proven way to scale up and cover multiple cities and locations,” Malik further added.

Adding to Malik, Abdullah Khan, founder and CEO of Fishlee said, "To be successful in the QSR space and have a pan-India presence, you must develop a unique concept and provide superior customer service in terms of food variety, quality, delivery time, and ambience.”

Few checklist that should not be ignored are, recruiting the necessary number of employees, purchasing the necessary kitchen equipment and raw materials, installing a point-of-sale (POS) or billing software etc.

“Products standardisation or rather taste standardisation, staff training and controlled recipe units, automation technology, marketing planning and strategy for SM and DM Platforms and profitable business model is the ultimate key,” Hanish Suri, COO of Wok On Fire added.

Better advantage for bigger brands

Zorawar Kalra, managing director of Massive Restaurants feels that for an established brand, it is much easier to plan expansion on go live in multiple locations. However, it takes a lot of planning, logistics and digital team marketing and high level of audits to track the operations. We open four to six stores together in each city to get the maximum impact,” he commented.

According to him, the unit economics of cloud business is easier to manage and are at par from high performing restaurants as the ROC is much higher for any cloud kitchen business. “Along with the strong audit system in place, there should be a strong project system because one can centralise the food but if there are no strong logistics the consistency issue will hamper the business,” he added.

Expect the unexpected

The new location might be more of a fixer-upper than one has expected, or the profits might not be meeting the initial projections. Having a game plan and learning from the mistakes one has made the first time around is critical, but need to be adaptable to change.

According to Suri, knowing the market share, there is a need for team, equipment, consistent product taste and great looking stores with outstanding ambience and consumer service experience. The business also need investments in regards to debt or equity and individual franchises owners considering his brand runs in FOCO model.

“We are growing profitable with good margins as compared to the markets and we have good business model that gives good opportunity to every stack holder to invest and grow,” he added. Additionally, effectively marketing one business is hard enough, but what about multiple locations?

The most important thing to consider when developing a new marketing plan for any QSR or cloud kitchen is the target audience. “When you were doing demographics research while searching for the right location, you probably learned a lot about how to market to that community. Using this information is crucial to getting your message across in the most effective way,” Kalra added.

Above all else, managing multiple locations requires a willingness and ability to delegate. Because micromanaging removes accountability, squashes creativity, and discourages future participation, one need to get comfortable trusting the business in the hands of people other than himself!