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After Mr. Krabs founded Krusty Krab 2, he planned for Squidward to be the manager, but at the end of the movie, SpongeBob became the manager, leaving Squidward with the job of cashier.
In the episode "As Seen on TV," Squidward constructed a second Krusty Krab for a commercial, as the first Krusty Krab's understudy. It's possible that this Krusty Krab would later be reused as the Krusty Krab 2.
Even though this takes place 27 years after 2004 (release year), all characters appear to be the same age. This may be because of a floating timeline.
It is unknown what has happened to the Krusty Krab 2 after The SpongeBob SquarePants Movie.