5 Restaurant Remodel Costs to Budget For

It’s easy for many restaurant owners to dream about their next major restaurant remodel, from basic repairs to a complete shift in decor to an expansion into a patio or rooftop dining area with a whole new layout. But suddenly, once they put pen to paper, the amount of people, costs, and lost time involved can really begin to pile up; when combined with rampant thoughts of various things that could go wrong — like running out of money, missing timelines, or entirely missing the boat with the new design — a restaurant owner could easily become discouraged from moving any further with their restaurant remodel.

However, fleshing out a list that covers all of these aspects is actually a great way to get started when figuring out restaurant remodel costs and the financial undertaking involved with the process. With an outline jotted down, restaurant owners can begin to plan out all the major aspects of their restaurant remodel, like tightening up their redesign goals, listing out some contractors to call up, and researching the costs and time involved with this project with other people. They can even tag in their back-of-house or front-of-house staff to help ideate and refine the plan, since those employees are often closest to what’s being remodeled. 

Breaking up a massive project down to bits and pieces makes it much more manageable, especially if you let the pros explain the finer details regarding what happens during a remodel. In this article, we’ll briefly touch on some of the major questions restaurant owners have when approaching a restaurant remodel, as well as some common costs involved with remodeling your restaurant and its decor from the inside out.

What is the average remodel cost for a restaurant?

The average remodel cost for a restaurant can vary based on several factors, such as what geographic region the restaurant is located in, what kinds of planning and permits are required, and how large of a restaurant remodel is being sought out.

Rather than give a non-specific average remodel cost, we recommend triangulating to a project cost specific to the scope of your restaurant remodel. For example, you can start with the average cost per square foot to remodel a restaurant, look up costs of materials that you’re looking to use for your remodel, get some labor quotes from a contractor, and ask your restaurateur friends who have recently remodeled to triangulate to a figure closer to what you’re likely to actually pay. 

Before we go any further, remember that there is one significant, yet silent cost — the opportunity cost of being fully open for business during the time your restaurant remodel would take. For some parts of the renovation, you may be able to service take-out and delivery orders still if your kitchen and utilities are up and running, but the cost of being fully closed is a sneaky one that should be kept in mind.

What is the average cost per square foot to remodel a restaurant?

Again, this cost can vary wildly; for example, a restaurant in New York City would pay a rate that's on a whole other order of magnitude than a restaurant in a less expensive location. That being said, many builders and contractors peg the cost per square foot for a restaurant to be around $150 to $300. This can help you form a foundation of the cost of your restaurant remodel, but remember to factor in all the other true costs involved, like building materials and labor costs. Your restaurant’s concept can also change your costs in a notable way, with sit-down, full service restaurants typically commanding nicer, more expensive design materials than a quick service restaurant or pop-up.

Lastly, before we get into some of these specific restaurant remodeling costs, the space your restaurant is operating in and how much of an overhaul are required both play major roles in cost and time required.

5 Restaurant Remodel Costs to Budget For

Let’s break down some of the most common costs in restaurant remodels. The budgets for each of these costs differ based on the affected renovation area, whether there are structural changes or strip-outs, total hourly labor costs, furnishings and materials, and more.

Contractors and labor

These are some of the largest restaurant remodel costs to budget for because contractors and their labor are involved throughout the entire project. There are many websites that can connect you with a seasoned local contractor that knows all about restaurant remodeling, as well as the nuances of your city's requirements. Beyond construction and utility work contractors, it may be helpful to consider an interior or exterior designer to help bring your vision to fruition while enhancing the look and feel of your space.

It’s easy to be tempted to skimp on these costs, but this is one of those “measure twice, cut once” situations where a professional contractor and trustworthy labor will pay for themselves over time. By going with the cheapest option, you run the risk of makeshift or shoddy workmanship that not only could be cosmetically undesirable, but also structurally dangerous — especially if your restaurant remodel project involves replacing plumbing, electric, or HVAC work. Getting things done correctly the first time protects you from potentially shutting down and remodeling all over again due to faulty installations and hidden problems.

Utility work

Not all restaurant remodel projects require utility work, which encapsulates everything from your electrical wiring, gas lines, HVAC, and plumbing. However, with any major overhaul or square footage expansion, utility work becomes all but avoidable. All of these utilities need to be connected to new areas in your restaurant and will require a major time commitment to get everything working as intended and safely.

Permitting

While getting construction permits isn’t the most expensive cost on this list, it’s still one to consider. Your contractor will know all about required permits for a restaurant remodel job, but permits may take longer than expected to get approval before you can start on your construction. Improper or insufficient permits may result in penalties and fines, so don’t jump into your project before first confirming everything you need to get started.

Furnishings and materials

Furnishings and materials are one of the most expensive restaurant remodel costs, but this is where you get to have some fun by expressing your creativity. Once you have a sense of what materials you need — whether it’s flooring, window replacements, new lighting fixtures, or new seating — you get to go out and do some shopping. To help control costs, you can comparison shop at different hardware stores and showrooms, where you can potentially pick up overstocked or out-of-season items at a big discount. Your contractors may also have close relationships with suppliers they commonly work with and could work to get you discounts on various materials.

Opportunity cost of being closed

Pursuing a restaurant remodel is often sparked by a necessity — whether you’ve outgrown your space, need to rewire your ceiling for trendy light fixtures, or think your restaurant’s theme has gotten a bit stale. Depending on the scale of your restaurant remodel or what part of your restaurant is being worked on, you may not be able to open at all during construction. You also need to consider your employees as well, since they may not be able to work full-time during that period.

For example, if your kitchen is affected by your remodel, you won’t be able to cook anything at all. However, if your remodel only shuts down your restaurant from on-premise dining, you could potentially still reach your guests through online orders, delivery, or even outdoor dining if available. Once you get a time estimate for your project, you can take some time to forecast any foregone sales to get a sense of your opportunity cost. 

How long does it take to remodel a restaurant?

Size of the restaurant remodel aside, most builders and contractors can provide an accurate estimate for completion. Some contractors suggest that a restaurant remodel can take anywhere from 4-12 weeks to complete, depending on the scope of the project. It’s generally better to pad any time estimates a bit to mentally prepare for any time slippage and understand the overall impact of an extended timeframe.

How can a restaurant remodel help the business?

Committing to a restaurant remodel can be a stressful decision to make given the different variables involved with the process. By taking the time to decide which aspects need remodeling to delight your customers, and doing your due diligence into contractors, designers, and materials, you can minimize the risk of your project and be prepared for potential hiccups along the way.

The end result of a long process will be worth it — not only will customers be drawn in by new layouts or designs that generate buzz, but your restaurant’s employees will have an extra pep to their step working in a fresh new space.

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Toast Capital Loans are issued by WebBank. Loans are subject to credit approval and may not be available to borrowers in certain jurisdictions. WebBank reserves the right to change or discontinue this program without notice.

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**Funds are typically disbursed within 1-2 business days after signing your credit agreement.