How Much Does It Cost to Start a Restaurant Business?
- Nate Jones, CPCU, ARM, CLCS, AU
- Oct 17
- 3 min read
Starting a restaurant is a dream for many entrepreneurs, but it’s also a significant financial undertaking. Whether you're planning a cozy café, a fast-casual concept, or a full-service dining experience, understanding the startup costs is essential for budgeting, securing funding, and launching successfully.
In this guide, we’ll break down the average costs of starting a restaurant, the key factors that influence your budget, and how to protect your investment with the right insurance coverage.
Average Cost to Start a Restaurant
The average cost to start a restaurant in the U.S. ranges from $95,000 to over $2 million, depending on the size, location, and concept of the business.
Here’s a breakdown of median startup costs by restaurant type:
Restaurant Type | Median Startup Cost |
Full-Service Restaurant | $475,500 |
Limited-Service (Fast Casual) | $225,500 |
Catering/Takeout Only | $150,500 |
Food Truck | $100,000–$175,000 |
💡 According to RestaurantOwner.com, the average cost per square foot is around $113, and per seat is approximately $3,586.
Key Startup Expenses
Here are the major cost categories to plan for:
1. Commercial Space
Lease: $3,000–$10,000/month or more depending on location
Purchase: $159–$178 per square foot on average
2. Renovations and Build-Out
Cost: $100–$800 per square foot
Includes plumbing, electrical, kitchen layout, and dining area design
3. Furniture, Fixtures & Equipment (FF&E)
Cost: $15,000–$80,000+
Includes ovens, refrigerators, tables, chairs, lighting, and décor
4. Licensing and Permits
Cost: $1,000–$10,000+
Includes business license, food service permit, health department approval, and liquor license (if applicable)
5. Technology and POS Systems
Cost: $2,000–$15,000
Includes point-of-sale systems, kitchen display systems, and online ordering platforms
6. Initial Inventory
Cost: $5,000–$25,000
Includes food, beverages, cleaning supplies, and packaging
7. Marketing and Branding
Cost: $2,000–$10,000+
Includes logo design, website, social media, and launch promotions
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8. Staffing and Training
Cost: Varies by team size
Includes wages, uniforms, training, and onboarding
Don’t Forget: Insurance Costs
Insurance is a critical part of your startup budget. At Wexford Insurance, we help restaurant owners protect their investment with tailored coverage.
Here are the essential insurance policies to include in your startup costs:
General Liability Insurance – Covers third-party injuries or property damage (e.g., slip-and-fall accidents).
Commercial Auto Insurance – Protects vehicles used for deliveries or catering.
Commercial Property Insurance – Covers your building, kitchen equipment, and furnishings.
Workers’ Compensation Insurance – Required if you have employees; covers job-related injuries.
Equipment Insurance – Protects your valuable kitchen tools and machinery from damage or theft.
Insurance Type | Average Annual Cost |
General Liability Insurance | $900 – $2,500 |
Commercial Auto Insurance | $1,200 – $2,400 |
Commercial Property Insurance | $740 – $2,500 |
Workers’ Compensation | $600 – $1,500 |
Equipment Insurance | Often included in BOP or $300–$1,000 as an add-on |
💡 Many restaurants bundle these into a Business Owner’s Policy (BOP), which averages $2,160 to $3,010 per year and includes general liability, commercial property, and business interruption coverage.
Final Thoughts
Starting a restaurant is a major financial commitment, but with the right planning and protection, it can be a highly rewarding business. By understanding your startup costs and budgeting for insurance, you’ll be better prepared to open your doors and serve your first customers.
At Wexford Insurance, we specialize in helping restaurant entrepreneurs like you protect what matters most. Whether you're opening your first location or expanding your brand, we’re here to help.
👉 Contact us today to get started.
