Your Restaurant Group Needs a Real HR Leader Before It Needs Another Location
My husband said something to me once, back when we had four restaurants running at the same time. "I'll never make as much money as I did when we just had one restaurant." He was right. We had several different concepts going, none of them running perfectly. We grew even when we weren’t ready, and what came with that was a constant stream of putting out fires.
Opening location number three is an easy thing to want. A new lease, a new concept, a new number to put on the website. It's a much harder thing to actually be ready for, and most owners don't find that out until they're already signed on for it.
Growing too fast doesn't feel like a mistake while it's happening. It feels like proof that the concept works and that the demand is there, so why wouldn't you take it. The cost of skipping the groundwork doesn't appear on opening day. It appears months later, once you're already running more than one location and trying to fix the same problems in two or three places instead of one.
You Shouldn't Grow That Quickly
I don't think you should ever consider scaling or opening a second location until the one you already have is working the way it's supposed to. Not almost. All the way. You need every system and every process in your restaurant streamlined and actually working before you're ready to scale.
That's not just about the concept and the guests. It's about how the entire business operates, so a guest feels like it's easy, fun, and affordable to come back. The same every time. Consistent every time. That consistency is the whole point of being a group instead of a single restaurant. Nobody opens a second location because they want two different experiences under one name. They open it because they want to multiply something that already works.
That's exactly why timing is everything here. If you don't have that consistency yet at one location, adding a second one won't create it for you. It will just multiply whatever you're missing. Two restaurants with the same weak spots in how they're run aren't twice as strong. They're twice as exposed, and now you're managing those same issues in two places at once instead of one.
I grew a group before I fully understood that. It's a lot easier to see it looking back than it is to feel it while you're in the middle of deciding whether to open the next one.
What I'm Doing Differently This Time
I'm about to open a new restaurant. It'll be our only one for now, at least to start. We've normally run three or four at a time, so I know exactly what it takes to keep that many plates spinning, and I know firsthand what it costs when the systems underneath them aren't ready for it. This time, we’re working with an HR consultant to handle the foundational things and make sure everything is actually structured before we open.
I get it. Most independent restaurateurs don't want to spend money on that line item. Especially now, when you can download something from ChatGPT and hope it works. I understand the instinct. An HR consultant can feel like the easiest thing to push until later. But you also have to consider the cost of (and access to) benefits, and that's not something a downloaded template handles for you. A generated handbook can tell you what a policy should say. It can't tell you whether your business is actually set up to deliver on it.
Why So Many Groups Skip It
A lot of small restaurant groups don't bring HR in-house because it's an expensive line item. Every piece of it, from the SOPs to compliance to the benefits, takes significant time and expertise to get right, and most independent operators are already stretched thin just running service. So it gets pushed down the list until a group is trying to build it retroactively across five or six locations instead of one, which is a much harder and much more expensive problem to solve.
That's part of why The Madison Collective is now offering PEO services to our boutique operators. Healthcare costs for staff, especially in a state like California, are already high, and we want smaller restaurant groups to get access to the same options and rates that bigger groups get, along with dedicated HR support and streamlined services most of them can't build on their own. The goal is to take that line item that feels impossible for a smaller group to justify and make it something they can actually afford to do right, instead of something they keep deferring until it becomes a bigger problem than the one they were trying to avoid.
Some parts of running a business get stronger when you pool them across a group instead of every location trying to build its own version from scratch. HR and benefits are exactly that kind of thing.
Fix What You Have First
You shouldn't grow that quickly. You need to have everything working perfectly before you're ready to do the next one. That's not a slower way to build a restaurant group. It's the only way to build one that's actually still standing by the time you get to location four.
The next location will always feel like the exciting part. The HR consultant, the SOPs, the employee files, none of that is particularly exciting. It's paperwork, it's process, it's the unglamorous back half of the business that nobody puts in the announcement post. But it's the difference between a group that scales and a group that's just adding more places for the same fires to start.
I'm not saying this as someone looking in from the outside. I'm saying it as someone doing it right now, at my own restaurant, because I've already experienced what happens when you skip it. My husband's line about only making money with one restaurant has stayed with me for a reason. It was true then, and it's the reason I'm doing things differently this time around.
If you're an owner weighing whether it's time for the next location, ask yourself honestly whether the one you have now is running the way it's supposed to, every day, without you holding it together. If the answer is no, that's the project. Not the new lease. Not yet.
The guest who comes back a second time isn't coming back for a new location. They're coming back because the one you already have served the exact same experience time and time again. That consistency is the thing actually worth protecting before you open anything else.
About The Author:
Martha Madison is the Founder of The Madison Collective, a hospitality-focused executive recruiting firm where every recruiter has been a senior-level restaurant operator. She spent 20+ years inside the industry before she spent a day recruiting for it, starting behind the bar in NYC during the early days of the modern cocktail movement before rising to GM at a well-known restaurant in Hollywood. She and her husband went on to own and operate five restaurants together, hiring roughly a thousand people along the way. Today the Madison Collective places GMs, Sous Chefs, F&B leaders, and hotel executives at growth-stage restaurant groups, PE-backed hospitality companies, and luxury hotel brands.
Still running on systems you built for one location?
I've been there. More locations don't fix what isn't working yet. It just gives the same problems more places to show up. We help boutique operators get the HR foundation right before the next lease gets signed.
