November 28, 2023



reading time

4 mins

Enhancing Restaurant Profit Margins through Collaborative Partnerships

If there is no heating in winter, why not huddle together for warmth? In the fiercely competitive restaurant industry, the strategy of individual struggle is far less effective than cooperation. Collaborating with peers for mutual advantage is a more successful approach.

Restaurant operations face numerous challenges: intense industry competition and high operating costs. Homogenization is also becoming more prominent, making differentiation a key factor in escaping this predicament.

As a result, various innovative restaurant business models have emerged, such as combining fried chicken with bubble tea or unique storefront designs, aiming to stand out from the crowd.

However, for restaurants lacking sufficient financial resources, achieving internal reforms may not be easy. In contrast, adopting another approach, collaborating with other industry players to achieve a win-win situation, may be more feasible.

The 'Grouping' Growth in the Restaurant Industry

  • Restaurant + Stall – Let the stall owners be your greeters

In popular restaurant areas on commercial streets, you'll find many stalls outside restaurants, such as beverage stalls outside hot pot restaurants or taiyaki stalls outside Korean tofu hot pot restaurants. They share customer traffic and depend on each other.


Customers waiting for a table can buy snacks from the stall, alleviating the pressure on restaurant waiting areas to some extent. This is a win-win situation for both the restaurant and the stall, without requiring extensive effort to serve waiting customers, as seen in restaurants like Haidilao.

  • Restaurant + Specialty Dishes – Suitable for standardized fast-food chains

Examples include Indian naan, jianbing (Chinese savory crepes), specialty barbecue, and a bar for alcoholic beverages. This is a business model that operates within other restaurants, selling unique products.


Customers can enjoy a full meal at the restaurant while also trying these specialty foods. This collaboration brings novelty and attractiveness to the restaurant, while providing a broader sales platform for the stall. Both entities share seating and decoration, saving on marketing costs.

  • Simultaneous Focus on Three Meals – Suitable for street-side stores

For instance, a restaurant that originally focused on providing lunch and dinner may now collaborate with a breakfast provider at its entrance. During the night, it may partner with a business specializing in late-night snacks.


Operating in different time periods fully utilizes the store space, saving costs.

  • Restaurant + Retail – You provide the stage, they perform

With the continuous development of the restaurant industry, some restaurants are expanding their businesses by designating areas outside their establishments for retail. While most restaurant retail areas primarily sell the restaurant's own specialty products, some choose different business models.

Many flower-themed restaurants, for example, rent their storefront space to professional flower retailers. These flowers not only serve as decoration for the restaurant, attracting customers' attention, but also form a cooperative business model with the flower retailer.


Sharing storefronts reduces rental pressure and increases efficiency; flowers act as soft furnishings, enhancing the restaurant's uniqueness and attracting consumers; flower sales don't affect the company's cash flow or require additional personnel, relieving financial pressure.

How to Choose Partners

  • What kind of partners should larger operators introduce?

Consider positioning:

If a brand wants to expand this collaborative model based on its existing foundation, it must first consider its brand positioning. For example, if your first hot pot restaurant collaborates with an Indian naan business, naan becomes an indispensable element of the brand in the future.

Consider product lines:

Product lines should differ from the main products and can include complementary or low-cost items that don't affect the average customer spending. For example, if a restaurant primarily offers heavy-flavored dishes, it can consider introducing beverages or desserts.

Additionally, product quality must be carefully considered. If the stability of the product cannot be guaranteed, it may lead to negative customer reviews, damaging the brand image.

  • What kind of restaurants should smaller operators enter?

Consider brand strength:

The choice of both cooperating parties is mutual. While dependence on each other is the goal, choose a partner that can lead your brand. Regardless of brand size, at least understand daily customer traffic and turnover to avoid falling into a financial pit.

Consider target customer base:

Regardless of the collaboration model chosen, examine the target customer base. Ensure that the restaurant's target customers align with your own; only with a consistent customer base can the collaboration be mutually beneficial.

Precise location selection, mutual cooperation:

Speaking of mutual cooperation, it's connected to the restaurant's location. For example, in a shopping mall, opening a spicy hot pot restaurant next to a skewer restaurant will only increase competition. Opening a beverage store next to a skewer restaurant, on the other hand, can form a complementary relationship, creating a positive interaction and mutual benefit.

In the fiercely competitive restaurant market, the pace of development for those who explore alone is relatively slow. Instead of taking many detours, it's better to change your mindset and adopt a new approach.

Cooperating with fellow restaurant professionals with common needs, achieving mutual benefits, and forming a 'grouping' model in competition is one effective way for restaurants to improve efficiency and reduce costs.