Industry Survey: How Much Does it Cost to Open a Restaurant?
Our members are always asking, "How much does if cost to open a restaurant?" As part of our ongoing effort to answer this question, we responded by asking each of our members to share their unique experiences with regard to their startup costs. We received more than 400 responses from a variety of restaurants. Of course no two restaurants are the same, and the cost per square foot to open a restaurant varies greatly depending upon a litany of factors such as service style, decor, size, and location. Nevertheless, we were able to uncover a number of statistics that can be useful when planning your startup. In an earlier survey, "How Independent Operators Finance Their Restaurants", the focus was on the various methods that restaurateurs employed to raise money for their startup, irrespective of service style, theme, size, or location. This segment of our Industry Surveys reveals more detailed statistics. The report below shows the collective responses for all respondents. While this information is beneficial, more meaningful comparisons can be made by reviewing the results of only those restaurants that more closely resemble your own concept. To help you, we have filtered the responses and prepared summary reports for the following areas:
We have other tools to help you determine the cost of opening a restaurant. They include: | Survey Summary - All Respondents | | Sales-Investment Results | Lower Quartile | Median | Upper Quartile | Average | # of Respondents | | Annual sales | $425,000 | $850,000 | $1,375,000 | $1,136,867 | 395 | | Sales per sq. ft. | $163 | $283 | $424 | $342 | 394 | | Sales per seat | $5,076 | $8,594 | $13,557 | $9,992 | 391 | | Annual profit-$ | $10,000 | $52,000 | $130,000 | $89,969 | 381 | | Profit-% | 2.5% | 8.0% | 12.0% | 6.4% | 381 | | Sales to Investment Ratio (no land purchase) | 1.7 to 1 | 3.0 to 1 | 5.7 to 1 | 2.4 to 1 | 267 | | Sales to Investment Ratio (with land purchase) | 1.1 to 1 | 1.9 to 1 | 3.5 to 1 | 1.8 to 1 | 101 | | Annual return on investment (ROI) | 4.2% | 18.0% | 40.0% | 36.9% | 355 | | # of months it took to become profitable | 4 | 12 | 24 | 18 | 257 | | Cost Estimates | Lower Quartile | Median | Upper Quartile | Average | # of Respondents | | Total startup cost (no land purchase) | $125,000 | $225,000 | $550,000 | $451,966 | 267 | | Total startup cost (with land purchase) | $175,000 | $375,000 | $850,000 | $700,866 | 101 | | Startup cost per sq. ft. (no land purchase) | $42 | $83 | $159 | $125 | 266 | | Startup cost per sq. ft. (with land purchase) | $56 | $125 | $250 | $174 | 101 | | Startup cost per seat (no land purchase) | $1,244 | $2,500 | $4,955 | $3,759 | 263 | | Startup cost per seat (with land purchase) | $1,750 | $3,728 | $7,212 | $5,195 | 101 | | Cost overrun compared to budget | 0% | 18% | 46% | 32% | 367 | | Construction cost-$ | $50,000 | $140,000 | $400,000 | $267,547 | 317 | | Construction Cost-% of Overall Startup | 29% | 47% | 67% | 50% | 317 | | Construction cost per sq. ft. | $16 | $46 | $91 | $68 | 314 | | Construction cost per seat | $500 | $1,250 | $2,795 | $2,004 | 314 | | Kitchen & bar equip. cost-$ | $30,750 | $75,000 | $150,000 | $120,982 | 331 | | Kitchen & bar cost per sq. ft. | $50 | $94 | $153 | $150 | 330 | | Land & building cost-$ | $50,000 | $150,000 | $400,000 | $301,426 | 101 | | Space Requirements | Lower Quartile | Median | Upper Quartile | Average | # of Respondents | | Total sq. ft. | 2000 | 3100 | 5000 | 3994 | 425 | | Kitchen sq. ft. | 500 | 900 | 1300 | 1024 | 424 | | Kitchen % of overall sq. ft. | 19% | 28% | 36% | 29% | 423 | | Total # seats | 65 | 101 | 165 | 149 | 422 | | Sq. ft. per seat | 25 | 31 | 39 | 34 | 420 |
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