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How Much Does It Cost To Start A Restaurant?

how does a lease purchase work

This is the number one question I get asked. Unfortunately, there is no easy answer.

It’s just like asking a car dealer, “How much does it cost to buy a car?” The answer is…it depends…

There are many different types of restaurants; quick casual, full service, fine dining, take-out only, you get the picture. Are you going to lease or purchase? Are you building from the ground up? Is the space you are considering “restaurant ready” (that is, was it previously a restaurant?) Is the landlord offering a TI allowance?

The major expenses in any tenant improvement on a leased space includes, HVAC, exhaust hood, electrical, plumbing, and grease interceptor/trap.

Next you need to consider the interior finishes that are available. This includes counter tops, flooring, wall coverings, furniture, ceiling treatments, etc. All of these can increase the cost of construction considerably. Another major cost to consider is furniture.

What about equipment? Are you purchasing or leasing? Are you purchasing new or used?

What about the POS system? Are you going to purchase or lease?

What is the size of the space you are considering? Does it meet your seating requirements?

You also need to factor in a contingency (construction cost overrun), working capital, initial food and beverage order, uniforms, insurance, workers comp binder, payroll training expense. and many other miscellaneous expenses such as office equipment and supplies.

Don’t forget about lease and utility deposits.

You will also need to allocate funds for interior and exterior signage,

Marketing expense is also something you don't want to overlook.You will have marketing expenses prior to opening and you should also develop a comprehensive marketing plan for the first 12 months of operation.

These are just a few of the questions you need to ask yourself and have answered before you can determine, “How much does it cost to start a restaurant?”

Based on my 30 plus years in the restaurant industry, I would estimate start-up costs to range between $50.00 to $225.00 per sq. ft. Once again, let me reiterate that these costs can vary greatly based on many factors. An average 1,500 sq. ft. restaurant can cost upwards of $275,000.00.

Before you start any

restaurant development project, you must complete a comprehensive Feasibility Study. Our studies include Start-Up Capital Requirements and a Complete Financial Projection Package.

Be sure to read our booklet, “How to Start a Restaurant.”

Ron Santibanez

CEO, Profit Line Consulting, Inc.


"I can''t say enough about how profit line consulting helped me start my restaurant business. Ron is an expert at what he does and he helped me start my restaurant. he stood by my side through all the process of opening my restaurant and taught me everything there is to know about this tough business. his valuable resources and outstanding attention to his clients made this process easy and smooth. having Ron as my consultant was the best business decision i''ve ever made."

Zara Ghomri

Tropica Restaurant and Bar

“Ron and Team came highly referred to us – and thankfully, he did. We came to Ron under nearly impossible circumstances and had less than 60 days to prepare for an opening. Since it was our first time opening a restaurant establishment we needed everything from menu design, talent sourcing and operational training.

Ron pulled out a miracle and handled everything for us in a world class fashion. He took responsibility for the entire project and leveraged all of his relationships and good will to make things happen. He knew how important this was to us, and he personally was present to oversee initiatives to meet our timeline. The result is that we had a world class opening with satisfied customers.

Ron and Team are talented in so many areas, but I think his greatest assets are his integrity, relationships, and commitment to excellence. I look forward to working together again on future projects.”

Erick Humphries

"Ron Santibanez has been our go to guy for our restaurant concept. From concept development and menu creation to operational integration, he has given 110% throughout the entire process. His expertise in the restaurant consultation industry is top notch. This being our first restaurant, we needed someone who not only could deliver the type of service required but who could be an integral part of our team. Ron was that person. Thanks for your work."

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