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If that’s an option, yes. But for many it isn’t. The building isn’t owned by them. Or there’s no available space next door to expand into. Or the capital cost o
by orev 2y ago
If that’s an option, yes. But for many it isn’t. The building isn’t owned by them. Or there’s no available space next door to expand into. Or the capital cost of remodeling that new section is too high. Or the profit margins are so small they can’t justify the cost. Or they’re already maxed out on loans and can’t afford more.
- pc86 2y agoAnd a second restaurant is still a second restaurant. There's still a very high (>50% for sure) chance it fails. The second location isn't quite as good. The manager you hire starts to slack off a bit. Food critic gets sick during opening week. A close family member dies and you ignore the restaurant(s) for just a little too long. The list of things that could happen that boil down to "bad luck" is endless.
- golergka 2y ago> Or the profit margins are so small they can’t justify the cost. You mean the cost increase? I'm afraid I don't understand. Who would you need to justify the cost to, the clients? They don't know anything about your profit margins, and they don't really need any justification.
- orev 2y agoOperating the restaurant at the current size might not provide enough revenue to pay for the expansion costs (more rent, renovation of the space, etc.).