How Much Does It Cost to Build a Commercial Kitchen (+Alternatives)
February 24, 2020
For those considering opening a new restaurant – or adding a food menu to an existing business – researching how to build and operate a new commercial kitchen is an obvious next step. A commercial kitchen is able to meet legal requirements, store food inventory, produce large quantities of food, and more.
However, a commercial kitchen comes with an abundance of costs that you might not have the budget to accommodate. There’s more to building out a kitchen than just purchasing the equipment – which can be a substantial cost in itself.
You’ll also have to consider any renovating that you might have to do to accommodate your new kitchen. Other things that can impact the cost of your commercial kitchen include the location, needs, and the contractors involved.
The overall cost of building, opening, and operating a kitchen to support your restaurant is around $450,000 to $550,000.
While this may seem high, it becomes apparent how expensive opening a new restaurant kitchen is when the cost is broken down.
Some of these major costs include:
- Kitchen Construction – $250,000 – $350,000
- Kitchen Equipment – Up to $80,000
- Food Licenses, Permits and Insurance: $12,000
- Food Inventory
- Line Cooks, Chefs and Other Staff Wages
- Additional Operating Costs
Your Restaurant’s Location
One of the first things that will impact the cost of your commercial kitchen is the location where you’re building. There are various legal requirements that you’ll have to consider when building out your kitchen. Your local city and county government will typically have to be involved.
The government will assign the department of health or a similar department the duties of inspecting and approving a commercial kitchen. You will have to be sure that your kitchen is meeting the local health codes, employee safety protocols, and fire codes.
To make sure that your kitchen is up to code, you will have to be aware of how you layout your kitchen. Some regulations require specific distances between food prep stations and sinks. Certain areas will require more ventilation than others. You also need to be aware of how close your food is stored in other areas of your kitchen. When you lay it all out, these costs can begin to add up.
All good projects begin with research. Before you dive in and commit to building out a commercial kitchen, look into your local codes, and understand what you will need to do to pass your inspections.
Your Kitchen Needs
Think about what you need for your kitchen. Based on your business plan, you should have a general idea of how many customers you’re expecting and how many will want to order food.
Yet, you also need to consider that as your business grows, so will the number of customers you serve. While you might not need the equipment that can produce large quantities at the start, are you willing to make the renovations when you need to in the future? Or do you want to invest so you won’t need to upgrade?
Your contractor will likely be a large portion of your cost. As the saying goes, “good work isn’t cheap, and cheap work isn’t good.” If you want to make sure that the work is quality, you’ll have to pay a bit more. Still, that doesn’t mean that you need to pay the highest price.
Talking to multiple contractors and getting multiple quotes is the best way to get a reasonable price for your renovation. Different contractors might have different suppliers that they deal with that offer them price breaks. The various permits that are required can have an impact on what the final price will be as well.
You should never go with the first quote. Call around and talk to various contractors with an idea of the scope of work that you have. Some will be more willing to negotiate prices with you as well. When you have quotes from other contractors, you’re able to use that to your advantage when bargaining.
Still, it’s important to remember that when you go for a low price, you might have to deal with low-quality craftsmanship. The contractor will need to make up for his loss in profit somewhere.
Your business is ready to open up shop, but you’ve crunched the numbers, and you realize that a commercial kitchen just doesn’t work with your finances. Luckily, there are other alternatives out there so you can get to business.
What if you could serve food in your business, without the overhead of opening and operating a full kitchen? For many businesses including breweries, bars, hotels, distillers and more, this is just the case.
2ndKitchen partners businesses that want to serve food – but want to avoid the costs and legal hurdles of opening their own kitchen – with local restaurants.
2ndKitchen simulates an entire restaurant experience. They work with the business to find the right restaurant for them, create a custom menu design, provide marketing collateral for the business, manage customer service and delivery (if needed), and provide an analytics dashboard for customer ordering preferences.
The best part? It’s completely free for businesses.
2. Co-Op Kitchens
A co-op kitchen provides you with an opportunity to continue doing things your way. A co-op kitchen provides you with all of the tools and equipment that you need to make food for your business, but instead of having it built into your business, it’s a shared offsite location.
Like everything else, a co-op kitchen does come with its share of setbacks. You may not have all of the equipment that you need. A co-op kitchen has to serve other clients. You’ll have to plan your uses around the schedule of when it’s available. Also, since the kitchen is offsite, you’ll have to find a way to transport the food back to your business. An offsite kitchen can make operations difficult if you run out and need to make more quickly.
Similar concepts to co-op kitchens include:
3. Food Trucks
Food trucks are a good option for a few reasons. Outside of the obvious that they provide you with a kitchen to cook in, they can also open up a whole new side to your business.
A food truck will give you the kitchen you need to serve food to your guests, and it will also give you the means to take your business on the road. If you’re looking for ways to expand your business, a food truck might be an excellent opportunity to bring your business directly to the customers. By going to where the customers are, you’ll be able to promote your business and serve people that may not have typically had the opportunity to visit you. Owning a food truck could be just the thing to bring your business to the next level.
The downside to building a food truck is again the cost. There’s more to building a food truck than throwing a grill into the back of a box truck. When you calculate the total price, building a food truck can cost from $50,000 up to $120,000. This total is a lot to take in for someone who’s trying to save money. If you have to decide between the two, you might be better off biting the bullet and building out your commercial kitchen.
Perhaps you don’t want to build a food truck, but you’d rather have a variety of food trucks come to you. This option might sound more manageable, but it comes with challenges of its own.
Getting food trucks to come to your business will require time in research and scheduling. You will need to learn about what food trucks are in your area and what their requirements are for booking. Most food trucks will charge a minimum just for showing up. The coordination can also become a hassle as you need to work your way into their schedule.
Ultimately, you are the person that knows your business the best. Your long term goals will help you decide where you’re looking to invest your money. If a commercial kitchen is part of your plan, you’ll need to be positive that the expense is worth it to you.