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Overview
Knowing the first restaurant has had a super performance, the desire of increasing income and the needs of sufficient money for children's university education within 7 years, it is time for finding an optimum ways for expansion. Potential expansion will have impact on the allocation of managerial effort, human resource and financial resource on the first restaurant which may have positive or negative influence on its return. Any risks and benefits that related to the expansion are sharing between the owners. Therefore there should be a relatively same degree of risk preference level and willingness of expansion between you two owners.
Having had the second location for expansion in mind, demographic and economic statistics will help to determine the restaurant sales potential of the market area you plan to serve. Raising finance for a second restaurant is usually easier than for the first. However there are not enough funds from internally generated cash-flow, bank loan will be an alternative. In order to get the bank loan, there are certain covenants have to be met. These will not make the second business operation easier than the first one.
Second location assessment
Choosing a location is an important aspect of starting a restaurant. The characteristics of a good location are:
Traffic: Drivers passing your restaurant will become familiar with it and might stop there to eat. You can get traffic counts from a real estate firm, demographic firm, planning commission, or highway department. You will want to pick a location that has high traffic counts at the peak times you serve your food.
Visibility: If potential customers can't see you, they may not stop. A corner location is ...