As the restaurant industry rebuilds from the challenges of the pandemic, restaurateurs have pivoted immensely, creating new ways to sustain and expand their presence through virtual brands, new brick-and-mortar locations, meal kits, and more. Restaurant operators are continuing to engage and expand their customer base in new spaces, but how can they discover and capitalize on these opportunities to ensure their longevity and profitability?
At the recent DoorDash Main Street Summit in Los Angeles, Pinky Cole of Slutty Vegan, Sara Kramer of Kismet and Kismet Rotisserie, and Aaron Noveshen of Starbird Chicken discussed how to leverage technology like virtual brands and data analytics, as well as DoorDash solutions to expand operations.
Watch the full session on YouTube and read below to learn how these three restaurateurs grew their business and expanded into new locations.
Restaurant expansion strategy: Key factors to consider
Where should your next location be? How will you maintain the quality of your menu? How can you ensure a consistent experience across locations?
For Sara Kramer, chef and co-owner of Kismet and Kismet Rotisserie in Los Angeles, the question of maintaining quality while continuing to expand is at the forefront. "A big part of it for us is going to be figuring out what we want to outsource versus what we want to bring in-house," she says. "And as we scale, what we can do ourselves versus what we can have other people do for us."
Determining what you want to take on in-house after an expansion will impact the training required for your employees. Providing proper training will help operators maintain quality as the business expands, while creating professional development opportunities for team members who want to try something new.
"I can’t underestimate training for employees in terms of quality and having a very strong training program because quality is about the people making the things," says Sara. "A huge point of focus for us is working with our teams and giving them the resources that they need to succeed."
Determining a location for restaurant expansion
Pinky Cole is the owner of Slutty Vegan, a vegan burger chain with seven locations throughout Georgia, Alabama, and New York City. As her business expands, she uses a few criteria to determine the next Slutty Vegan locations.
"I'm very intentional about how I open Slutty Vegan. They have to be in a vegan food desert or a regular food desert," she says. "They have to be less attractive to big-time developers — people who don't want to come into this neighborhood because they don't feel like it would make money or be right in the heart of gentrification. If it checks at least one of those boxes, then Slutty Vegan can go into that community."
While Pinky has her criteria for picking out new locations, she also trusts her intuition and intimate knowledge of her customer base. "I'm an energy person; I have to be in the space, smell it, feel it. I have to envision customers walking through the door because it really has to feel like what Slutty Vegan feels like," she says. "I know the customer, how they walk, how they talk, how they look, and what they think about based on our data and analytics, so I know what would be a great location for Slutty Vegan."
Pinky also understands the ripple effect her business has on a community, which makes her even more measured when it comes to her restaurant location strategy. "When Slutty Vegan comes into a neighborhood, it raises the value of the community, because more people want to live in that kind of area where there's a booming business down the block," she says. "So the other businesses nearby also win, as it raises the ecosystem for everybody."
The experience means everything to me. I don't care about money. I know I'm gonna make that. I care about how the consumer feels when they walk through the door because it's not the person that comes in for the first time. It's the person that comes in the second, the third, and the fourth time.
Expanding your brand virtually
While operators may traditionally think of expansion as a new brick-and-mortar location, there are new ways to expand your footprint digitally as well. That's what Starbird Chicken founder and CEO Aaron Noveshen discovered as the operator of more than ten locations throughout California — as well as a number of virtual brands and ghost kitchens.
Today, Starbird's virtual brands include Starbird Wings, Starbird Salads, Gardenbird (a plant-based concept), and Starbird Bowls. "During the pandemic, there weren't a lot of people going out to restaurants. They were all ordering food digitally," he says. "We wanted to expand into this new 'digital real estate,' and also be able to reach people where they wanted to be reached."
While launching a virtual restaurant brand has become popular over the past few years, Aaron says that the ease and relatively low cost of launching one doesn’t automatically lead to success.
"It's a competitive space, and the low barrier to entry is a challenge," he says. "In my experience, low investment and cost savings is not the way to long-term success. Generating sales is the greatest way to survive. Sales cure all ills."
For Aaron, tuning into his customers’ preferences and implementing an omnichannel approach have been key to the Starbird virtual brand promotion strategy.
"The way we think about omnichannel is to reach consumers where they want to be met and through multiple channels. What we've learned at Starbird is that not everybody wants to interface with us the same way," he says. "Some people want to walk in the door and talk to a human being and order something and connect. But other people don't want to talk to anybody — and we need to reach those people too. That's why we have an app and third-party delivery to allow people to navigate the Starbird experience digitally."
Overcoming expansion challenges
Industry challenges — from labor shortages to inflation to supply chain interruptions — threaten to set back progress and profitability of restaurant expansions.
For Pinky, some of those challenges have included losing relationships with longstanding employees and even being sued. In the four years that Slutty Vegan has been in business, she’s learned lessons firsthand on what it takes to expand the business while being true to the brand.
"I've had bad contractors, I've had people walk out at the last minute so I had to be in the kitchen myself," says Pinky. "But I needed those things to happen so that I could be more strategic in my approach to growing Slutty Vegan."
Hiring the right people is a major challenge for any business — and Aaron underlined the importance of letting go of employees who are not the right fit for your restaurant culture.
Take the time to find the right people, but when it's wrong, don't rationalize it. Fail fast and don't breathe your own exhaust along the way. Leading is ultimately bringing the people up around you. Always judge your success by the success of those around you.
Menu pricing is always a complicated challenge for restaurants, especially as inflation continues to rise. For Aaron, trying to combat the rising cost of chicken while running a chicken restaurant has led to new promotion strategies. "You can't raise your prices by 50% overnight, so it's been very challenging," he says. "A lot of it has been creatively selling things that have the least amount of chicken, like promoting salads because there are only two tenders instead of tender boxes."
Kismet raised their prices incrementally to minimize some of the trickle-down effects of inflation. "We have a very diverse menu which has really helped us," Sara says. "When we want to adjust prices, we can look at the whole mix rather than increasing all chicken dishes by 25%. We can do a little jump — like five or ten percent — in a lot of places, and have the product mix sort of balance out at the end."
Sara also stressed the importance of having positive relationships with suppliers. "Chicken prices were skyrocketing everywhere, but because of our relationship with our local purveyor and how much business we're giving them, they didn't touch our chicken price."
Don't underestimate the power of your local relationships. We were extremely lucky because we'd had a relationship with our chicken purveyor for many years. Our business was valuable to them so they took the hit for us, which was huge. You see that over and over again when you develop personal relationships.
Growing your restaurant business — and your community
Whatever your restaurant expansion strategy, building a community around each location and your brand overall will pay dividends in the future. "What I realized is the more good you do in the community, the more it comes back to you in the form of support for your business," Pinky says. "It makes it a lot easier to scale because people know Slutty Vegan is going to help make the community better."
For more advice from local restaurateurs, watch all Main Street Summit: LA sessions on YouTube and check out other session recaps like How to Build an Authentic Restaurant Brand on Social Media.
