{"id":19009,"date":"2023-01-25T07:00:50","date_gmt":"2023-01-25T13:00:50","guid":{"rendered":"https:\/\/www.escoffier.edu\/?p=19009"},"modified":"2025-10-22T06:31:56","modified_gmt":"2025-10-22T11:31:56","slug":"how-much-does-it-cost-to-start-a-restaurant","status":"publish","type":"post","link":"https:\/\/www.escoffier.edu\/blog\/food-entrepreneurship\/how-much-does-it-cost-to-start-a-restaurant\/","title":{"rendered":"How Much Can It Cost to Start a Restaurant?"},"content":{"rendered":"

Estimating costs for a new restaurant is a lot like looking at housing prices\u2014the price you can expect to pay depends on location, the size of the restaurant, and the quality of your equipment and design.<\/p>\n

One survey of restaurant owners across the country showed that the median cost to open a new restaurant<\/a> was $375,000, or $113 per square foot. However, the lower quartile of respondents reported their restaurants cost an average of $175,500 ($59 per square foot) to start while the upper quartile reported average opening costs of $750,500 ($177 per square foot).<\/p>\n

How much does it cost to start a restaurant? Well, these reported costs indicate just how variability there is. That said, as you create your business plan<\/a> and start to explore funding options, considering the following restaurant startup costs can help you get an estimate of what you may<\/em> pay.**<\/p>\n

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Estimated Restaurant Startup Costs**<\/h3>\n

Leased restaurant space:<\/strong> $3,000\u2013$8,750 per month<\/a><\/p>\n

Permitting, licensing, and legal fees:<\/strong> a few hundred to a thousands of dollars, varies depends on permits required as well as local costs<\/p>\n

Remodeling and renovations:<\/strong> $24\u2013$143\/sq ft<\/a> or $70,000\u2013$472,500<\/a><\/p>\n

Restaurant equipment and cooking tools:<\/strong> $40,000\u2014$196,000<\/a><\/p>\n

Restaurant furniture and supplies:<\/strong> varies depending on the size of the restaurant and quality of furnishings\u2014chairs alone can range from $26\u2013$300+<\/a><\/p>\n

Pre-opening food, beverage, and labor costs:<\/strong> varied<\/p>\n

Marketing costs:<\/strong> approximately 3-6% of monthly sales<\/a><\/p>\n<\/div>\n<\/div>\n

Buying Versus Leasing Your Restaurant Space<\/h2>\n

Your upfront costs will likely be much higher if you buy a restaurant space versus if you rent one. And of course, the cost of that space may vary dramatically based on the square footage and market. Here are some cost details for both leasing and buying.<\/p>\n

Leasing Your Restaurant Space<\/h3>\n

Rents for commercial spaces are often calculated on a dollar-per-square-foot basis. Therefore, the size of the restaurant can have a big impact on the cost of the lease, as can the area where the restaurant is located. When you take these two factors into account, you\u2019ll find that restaurant leases can widely vary in cost.<\/p>\n

A recent survey of restaurant owners found that most leases cost between $3,000\u2013$8,750 per month<\/a>. For your first payment, you\u2019ll typically be responsible for at least the first month\u2019s rent and a refundable security deposit (often equivalent to the first month\u2019s rent) upon signing.<\/p>\n

\"Interior

Both the size and quality of restaurant space can impact the lease cost.<\/p><\/div>\n

Buying Your Restaurant Space<\/h3>\n

If you plan to buy your restaurant space, expect to pay much more up front!<\/p>\n

The cost to buy a restaurant can vary wildly by size and market, but the median cost to buy a restaurant in 2020 was $200,000 while the average sale price was $410,000<\/a>. To get a better sense of what restaurants cost in your area, you can connect with a local real estate agent. The down payment can vary depending on the financing you use for the purchase. Many commercial loans and Small Business Administration (SBA) loans require a down payment of 10% to 35%<\/a> of the overall loan amount.<\/p>\n

Permitting, Licensing, and Legal Fees<\/h2>\n

To cover your legal bases, you\u2019ll need to comply with certain permitting and licensing rules. And some of these come with a cost.<\/p>\n

To start, you may need a business license. The fees for these vary by state and can range from $50 to several hundred dollars. Check with your Secretary of State to learn about your local business license requirements.<\/p>\n

You may need a Certificate of Occupancy from your local building inspector when any construction is complete. The costs vary depending on location, but you can expect to pay around $250<\/a>. You\u2019ll also need some licensing in order to serve food, usually from your local health department. And if you plan to serve beer, wine, or spirits, you\u2019ll need some kind of liquor license. Food manager permits can cost a few hundred dollars, and liquor licenses range from $100 (in Idaho) to nearly $14,000 (in California)<\/a>.<\/p>\n

You may also need to pay for fees and permits to hang signs. These costs vary depending on location as well as the size of the sign. In Chicago, the fees to install an on-premise sign can range between $250\u2013$1200<\/a> depending on the size of the sign, and in Austin sign review fees and annual license cost between $124 and $187<\/a> depending on the type of sign. Check with your city to determine what you can expect to pay for sign fees and permits.<\/p>\n

You may also have to pay entertainment fees if you plan to play music or sports broadcasts, or install gaming equipment like pool tables or gambling machines.<\/p>\n

And finally, hiring a lawyer to help you navigate all of these legalities is a good way to avoid missteps. Business lawyers charge $150\u2013$325 per hour<\/a>, but they can save you major headaches down the line.<\/p>\n

\"Businessman

Spending time going over your numbers and permits can save you money in the long run.<\/p><\/div>\n

Remodeling and Renovations<\/h2>\n

Once you\u2019ve secured your space, you\u2019ll probably want to do some renovations to make it your own.<\/p>\n

These costs will vary widely based on the market, the size of the property, and the standard of your renovations. For example, a fast-casual restaurant will probably use less expensive finishes than a fine dining restaurant.<\/p>\n

One estimate<\/a> says that the national average cost for \u201cmid-level\u201d finishes is about $160\/sq ft for a 2,000 sq ft property. You can use this construction estimate calculator<\/a> to get an idea of the cost for your market and finish standard.<\/p>\n

Kitchen Equipment and Cooking Tools<\/h2>\n

Kitchen Equipment<\/h3>\n

This has the potential to be the largest line item in your cost planning. Reliable kitchen equipment is vital to anyone who plans to serve food, and spending money on new or high-quality equipment now can limit costs down the line! Depending on the type of restaurant, you may need ovens, flat tops, and fryers for cooking, a hood vent for ventilation, a commercial dishwasher, refrigerators and freezers, and more.<\/p>\n

The Webstaurant Store, which is in the business of outfitting restaurants with equipment, estimates costs of $75,000 to $115,000<\/a> for the average restaurant to get their equipment. You may be able to save by buying second-hand equipment or leasing some larger items, like your commercial dishwasher or walk-in cooler.<\/p>\n

\"Large

Purchasing the right equipment is essential, but it can also be expensive.<\/p><\/div>\n

Cooking Utensils<\/h3>\n

In addition to your equipment, you\u2019ll need to supply your kitchen with smallwares and utensils. Pots and pans, spatulas and spoons, sheet pans, mixing bowls, knives, scales, and more must be purchased in advance, so your cooks have the right tools<\/a>.<\/p>\n

Point of Sale (POS) System<\/h3>\n

Your POS system is how the servers and bartenders communicate with the kitchen. It also ensures that customers get checks with the right totals, and it may also help you run financial reports at the end of the day, week, and month.<\/p>\n

This cost will depend on how many terminals and how much sophistication you need. A small counter deli may just need one basic terminal, while a larger restaurant may have half a dozen terminals, plus handheld ordering tablets for the servers. Expect to pay $500 to $10,000<\/a> for your POS hardware plus additional monthly fees.<\/p>\n

Restaurant Furniture and Supplies<\/h2>\n

This is another area where your restaurant style and size will likely have a major impact on your costs. You\u2019ll need to outfit your dining room with tables and chairs<\/a>, barstools, server stations, and a host stand. You\u2019ll also need plates, silverware, glassware, and possibly linens. A chic fine-dining restaurant will want to spend big on these customer-facing items to create the right ambiance<\/a>. But a casual soup-and-sandwich lunch spot can have much more simple and affordable furniture and supplies.<\/p>\n

\"Outdoor

Chairs and tables can range from a few hundred to a few thousand dollars depending on style and quality.<\/p><\/div>\n

If you want to get an idea of the range of costs, just consider plates! You can get plates for just a few dollars each, or you can get them for more than $35 each if you want to splurge.<\/p>\n

As for size, a small lunch cafe could only seat 30, so it may not need a high volume of supplies. A huge pizza restaurant, on the other hand, can seat hundreds and will need a much larger volume of tables, chairs, and smallwares.<\/p>\n

Pre-Opening Expenses<\/h2>\n

Costs like food, beverages, and labor will be recurring monthly expenses. But you\u2019ll also have to invest in these costs before you open your doors.<\/p>\n

Food must be purchased before you open, so you\u2019ll have something to serve. But you may need to buy ingredients even further in advance if your chef has to work on recipe development, and so they can train the rest of the kitchen team.<\/p>\n

You\u2019ll also need to stock your bar\u2014whether you serve alcohol or not. Even if you only serve water and soda, you may need to contract with a soda provider to get a soda machine, CO2 dispenser, and syrups.<\/p>\n

And you\u2019ll have labor costs, too. As you hire your new staff, you\u2019ll have payroll costs while they complete their training in preparation for the grand opening.<\/p>\n

\"Restaurant

Remember that you will need to pay staff for costs associated with training.<\/p><\/div>\n

Marketing Expenses<\/h2>\n

It\u2019s easy to let marketing costs spiral out of control if you\u2019re not careful. But this is also where you can DIY some of the work as you get on your feet.<\/p>\n

At a minimum, you may need a website and social media presence<\/a>, to help spread the word about your new restaurant. You can use a website builder like WordPress or Squarespace to design your own site without paying for a web designer. And for social media, you can take photos yourself and post inexpensive ads on Facebook or Instagram that target people in your area.<\/p>\n

\"Taking

Marketing via DIY social media can help limit costs.<\/p><\/div>\n

You can also reach out to media like the local news, food influencers and bloggers<\/a>, and food magazines to let them know that you\u2019ll be opening soon. They may be willing to feature you at no cost.<\/p>\n

While you can handle marketing internally, you might find it worthwhile to hire experts for these tasks. You can also start with a DIY approach and then hire pros as your sales start to grow. A good benchmark is to spend between 3% and 6%<\/a> of monthly sales on continued marketing.<\/p>\n

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Finding Funding for Your Restaurant<\/h3>\n

These resources can help you to fund your restaurant<\/a>.<\/p>\n