Building Your Dream Restaurant: Guide to Planning, Designing & Construction

Opening your ‘dream’ restaurant to serve people the greatest meal in the city is a passionate venture to pursue. You have got ideas for ambiance, a well-rounded menu, and a buzz-worthy name. But there are a whole bunch of construction details that go into every restaurant with seating arrangement, kitchen setup, flow of foot traffic, parking space, and building permits. These details can vary from design and build constructions, to tenant build-outs, restaurant renovations, and remodels for both brand franchises and single-location restaurants.

The restaurant industry in the United States is highly competitive with more than 600,000 restaurants in business. Business owners must keep their buildings updated, efficient, and safe in order to attract more diners and meet the demands of today’s ever-changing landscape.

So how do you turn your vision into reality? What are the steps and requirements to develop your ideal business space? And how much does it cost to build a restaurant building? We will answer all your queries in this comprehensive guide for restaurateurs with which you can launch your next culinary business venture.

What is Restaurant Construction?

Restaurant construction projects can entail a spectrum of complex building tasks. They can be repurposing space for food service, renovating an existing restaurant to meet the needs of a new owner, or designing and building something entirely new.

Generally, restaurant design-build focuses on ‘front of the house’ (where customers visit and dine) and the ‘back of the house’ (the kitchen). The front of the house construction involves the exterior, entry, dining rooms, bars, eating counters, and public restrooms. The back of the house construction encompasses the installation of specialized Mechanical, Electrical, and Plumbing (MEP) systems, cooking stations, a dishwasher, a refrigerator, and three-compartment sink. Hence, new design-build projects come with their own range of complexities.

The National Restaurant Association estimates a 30% failure rate in the restaurant industry. In other words, 1 in 3 restaurants doesn’t survive their first year. If you want to build a successful restaurant, make sure the end result is both functional for staff and pleasant for customers. It should also comply with all health regulations and restaurant-specific building codes.

All in all, restaurant construction projects require the expertise of commercial contractors specialized in the design-build process.

Restaurant Construction Project Plan

1. Hire a Specialized Restaurant Contractor

Restaurant construction projects can be more complex than other commercial projects because of the unique safety and health code regulations of the restaurant business. Hence, hire a restaurant general contractor who has experience with restaurant build-outs. Look for local restaurant construction companies as they are familiar with local regulations/codes/permits and have established contacts with subcontractors and suppliers. You can search ‘restaurant contractors near me’ to get a list of local companies.

Make sure they are licensed, have insurance coverage, with enough client references. It’s also critical for commercial restaurant contractors to understand how to do kitchen equipment installation both according to your operational needs and regulatory codes. Lastly, your communication style should match your hired restaurant builder.

2. Find a Suitable Location

Wrong location is the number one reason why most restaurants fail. While selecting an ideal location for your restaurant, there are multiple considerations to be aware of. Ensure the location is accessible, has ample parking, is located in an appropriate neighborhood, and will serve an active population.

If your location isn’t suitable for your target market, it will become difficult to boost restaurant sales and stay open. For example, a fast-food joint may thrive in a dense urban area where students and commuting employees stop over to grab lunch. Though, the same concept won’t work in a suburban locality.

3. Plan or Review Utilities

During the early planning stages, it’s important to sketch a plan with your restaurant construction company and engineer on restaurant’s utility requirements. Existing buildings will need to be reviewed according to these plans, and new constructions will need to plan out each item from the ground up for best results. Some of the utility items to plan or review are –

• Electrical Power and Lighting
• Water Supply and Plumbing
• Sanitary and Grease Waste
• Gas Service
• HVAC
• Hood Ducting, Venting, Make Up Air
• Fire Alarm System and Protection
• Sprinkler System
• Structural Stability

4. Read Your Lease

This step is particularly for restaurant owners who are leasing an existing commercial space. Hire a real estate lawyer to identify ways your lease can affect your daily operations and scope for building out the space according to your restaurant design plans. A restaurant lease should include two provisions – a lease outline drawing (LOD) and a work letter.

LOD represents a detailed floor plan of the space and ‘lease line’. Lease line determines your leasable square footage based on which the rent will be calculated. When building the restaurant, a lease outline drawing will help know any zoning or licensing laws that may come up against you. The work letter is a written statement signed by both the landlord and the tenant mentioning issues related to the fit-out of a tenant’s space. Lease reviews will reveal barriers to the development of the space so that builders can make improvements to improve efficiency.

5. Know the Building Codes

You would want to follow all the building codes to avoid expensive fines or even shutdowns. It’s the responsibility of commercial restaurant contractors and designers to meet health department requirements, and gather information related to zoning permits, code requirements, and landlord demands.

Egress codes instruct how many means of exits a building must have for people inside to use in the event of a fire emergency. These egress codes are based on a space’s square footage. Another extremely necessary compliance is ADA codes that cover accessibility requirements such as –

• Parking with appropriate accessibility signage
• Accessible building entrance routes like ramps, elevators
• Wide entrance ways
• Wheelchair-accessible seating
• Accessible public restrooms

6. Choose the Kitchen Equipment Layout

Designing a restaurant building’s layout and designing its kitchen equipment layout are whole different tasks that require their own attention. You can hire a kitchen equipment company to create the perfect layout and then hand it over to architects and restaurant construction team. A kitchen layout plan generally includes elements like:

• Storage spaces (pantries, commercial fridges, freezers, cabinets and drawers for keeping kitchen tools)
• Cooking stations, food preparation areas, and washing areas
• Food service areas with heat lamps to keep food warm
• Separate cleaning area equipped with three-compartment sinks, commercial dishwashers, and drying racks.
• Delivery space for receiving raw materials from vendors
• Other back of house elements (manager’s office, employee lockers)

7. Pick the design type for your restaurant

Depending on your restaurant type – Fast Casual, Quick Service, Fine Dining, Cafeteria, or Bar, your layout will include unique features. Develop a floor plan that is suitable for your restaurant type. Design and build your floor plan in such a way that customers will naturally navigate through the different points of service in your restaurant.

How Much Does it Cost to Build a Restaurant? (Cost Per Square Foot)

If you plan to buy your restaurant location, expect to pay around $178 per square foot. However, if you are interested in buying a restaurant building for rent, your costs will go down a bit lower by comparison. For a lease, you can expect to pay approximately $159 per square foot.

On average, the overall cost to open a restaurant with all expenses accounted for comes between $100 and $800 per square foot.

The restaurant cost per square foot may vary based on following factors –

• Location
• Restaurant Concept
• Size
• Materials
• New or Existing Location
• Kitchen Equipment

These cost figures indicate a median cost of $450 per square foot.

When building your new restaurant from the ground-up, your business budget plan should include these vital components.

Utilities

Even though you will not use utilities during project construction, eventually you will need utilities like water, gas, and electricity. For restaurants sized between 4,000 and 4,500 square feet, expect your average utility bill to be between $1,000 and $1,200 per month.

Building Location

Picking the ideal location for your restaurant is the most important decision that will impact the success and failure of your business. It is recommended to invest generously in locations with navigable foot traffic.

Interior Finishes and Equipment

The biggest driver of budget hikes is restaurant kitchen equipment and furniture, which largely depend on the size of your kitchen and dining areas. You will need aesthetic furniture to attract diners and large kitchen appliances for cooking. Not to forget essentials like signage, lights, music systems, Wi-Fi, and phone connections.

Pre-Opening Costs

Before the grand opening of your ambitious restaurant, you will need to organize an educational training program to ensure your staff is ready. Along with this, keeping a fully-stocked inventory consisting of food, beverages, drinking water, and cutlery will pave the way for a flawless guest experience. The pre-opening expenses inclusive of all elements can be between $20,000 and $120,000.

Marketing

Like any other business venture to flourish, a newly opened restaurant needs heavy marketing with promotional campaigns. If you open up a franchised location, the marketing expenses will be taken care of. While an upscale restaurant will have to work with a PR agency for media coverage. If you are tight on budget, social media marketing is the most cost-effective option. Overall, the marketing costs will range between 3 and 6% of sales.

Restaurant Building Design Ideas

The design of a restaurant building is what entices customers when they walk in. Creating the perfect atmosphere that is cozy and appealing to the senses will lead to return customers and stunning word-of-mouth marketing. We have compiled some of the trendiest restaurant design ideas to adopt for your new space.

• Location and Menu Based Design

Considering your location and the cuisine you will be serving, design the entire ambiance and style of your restaurant. For instance, a seafood restaurant can leverage a color palette of blues and whites, light wood, and subtle nautical elements. Meanwhile, a cafeteria will look best with minimalist furniture and wall typography.

• Charming Lighting

The lighting of any restaurant is a major factor in creating the type of environment you want guests to feel in your restaurant. In case you are aiming for a private dining experience, install dim lighting with wall mirrors, and candles to make the dining area spacious and inviting. To create an energized atmosphere, opt for bright lighting. Consider other factors like energy efficiency, staff safety, and social media friendliness when you are selecting restaurant lighting.

• Murals and Wall Art

In today’s social media era, having an ‘instagrammable’ backdrop in your restaurant helps significantly to drive customers. Through creative murals or graffiti-style wall art, you can showcase talents of local artists. When guests snap photos and selfies in your space, they automatically contribute promotional content in the form of user-generated content (UGC).

• Go Green

As the appeal of eco-friendly dining continues to grow, future restaurants will adopt sustainable design features and practices. Going green shows your restaurant cares about customers’ health and the environment. Incorporate sustainable materials like recycled wood, lumberyard stone, ceramic, eco-friendly tiles, and furniture crafted from repurposed materials. Decorate your space with greenery of indoor plants and an herb garden. Greenery will help purify the air quality and show people the freshness of your ingredients.

• Modern Minimalism

If you subscribe to the philosophy of ‘less is more’, a minimalist appearance is ideal. Think of Scandinavian-style decor, clean lines, monochrome or neutral color palettes, and natural materials. Every detail should be crafted with thoughtful attention keeping freshness and spaciousness in mind.

• Community-Centered Design

The isolating years of pandemic have snatched the touch of community from people’s lives. Community-centered design will not only revive that vibrancy but also present your restaurant as a breath of fresh air for customers. Try adding communal tables, a kid-friendly play area, or providing board games for guests to play while they wait. For encouraging more conversations, consider excluding TVs and internet connection.

Restaurant Building Requirements

Here is a restaurant construction checklist for necessary permits, codes, and licenses. Below mentioned application fees are according to California state regulations.

Federal Requirements

The Occupational Safety and Health Administration (OSHA) and Food and Drug Administration (FDA) has set stringent regulations on how a restaurant business must act for maintaining safety of employees and guests. Some of the common requirements are as follows.

Job Hazards – A restaurant space must take proper precautions to anticipate and eliminate potential job hazards that could hurt a worker or diner physically or mentally. Job hazards may include safety hazards, ergonomic hazards, and additional hazards like contamination or chemicals. Most states ask employers to install an updated Injury and Illness Prevention Program (IIPP) to train and educate employees about job site safety measures.

Fire Detectors and Alarms – A commercial kitchen space working with open flames on a daily basis is prone to fire outbreaks. For optimal fire safety, OSHA standards require that restaurants have automated visual and auditory fire detection systems that are regularly maintained. You are also required to have an automated fire suppression system connected to the cooking stations. According to the National Fire Prevention Association (NFPA) Life Safety Codes, a sprinkler system is mandatory for all restaurants. Moreover, they are expected to keep at least one Class-K portable fire extinguisher in the kitchen.

Exit Sign Requirements – All restaurants must place exit signs at both the front of the house and the back of the house. The sign must visibly read ‘Exit’, with at least 6 inches of letters, and be adequately illuminated. It’s also important to check whether all exit routes are unobstructed and without hazardous materials or furnishings.

Food Code – The goal of the Federal Food Code is to avoid the potential outbreak of foodborne illnesses. Hence, restaurants are expected to abide by the principles of Hazard Analysis and Critical Control Point (HACCP) to ensure safe food and storage handling practices. The National Sanitation Foundation reviews a restaurant’s food service equipment to verify that it aligns with the US sanitation standards. Although NSF certification isn’t mandatory for restaurants, it’s highly recommended.

State and Local Permit and License Requirements

In addition to federal workplace safety and sanitation regulations, restaurants have to obtain certain permits and licenses and abide by their state and county requirements. These requirements and their fees may differ from state to state. Here are the common types of permits/licenses required in California state and their associated application fees.

Restaurant Licenses and Permits

Licenses and Permits	Costs
Business License	$50-$100
Employer Identification Number (EIN)	$0
Certificate of Occupancy	$20 - $200+
Food Handler’s License (Food Service License)	Up to $15 per employee
Seller’s Permit	$0 (but a security deposit may be requested
Sign Permit	$20 - $50.
Music License	Depends on music type, background music costs $250 - $500
Resale Permit	Up to $50
Building Health Permit	$50 - $1000
Liquor License Permit	$105 - 16,000
Catering Business License	Variable, typically $1000+
Food Facility Health Permit	$900-$1,400 (San Francisco)
Employee Health Permit	Up to $15 per employee
Valet Parking Permit	Not specified
Dumpster Placement Permit	$10 - $100 per week
Live Entertainment License	Up to $510

The table mentions the required licenses/permits and their associated application fees for a restaurant.

Restaurant Construction Process

Many restaurateurs choose to hire a design and build team for new restaurant construction. A design-build team is an in-house collaboration of architects, designers, engineers, contractors, and other construction professionals working under a single contract for achieving goals of a building project. The restaurant design-build process comprises four main phases:

Phase 1 – Pre-Construction

At this stage, request preliminary cost estimates from your list of commercial restaurant contractors and finalize a realistic project bid. You’ll also submit applications for various zoning and building permits as well as additional licenses as an owner. Acquiring a permit requires an application, quality review, and permit application fees. Hire an experienced restaurant construction contractor for your project after performing due diligence on shortlisted candidates.

Establishing a successful restaurant begins at the planning stage. Pre-construction planning helps identify potential obstacles so they can be strategically overcome without affecting the project’s progression. In this phase, a geotechnical engineer will conduct soil testing and submit a report to your construction team. If the site has sub-standard soils, remedial solutions, for example, replacing unsuitable materials with buildable soils, keeping wider spread footings, or erecting stone columns will be implemented to bring the soils to a buildable standard.

All the project plans and risk management strategies will be distributed among team members for clear communication. Before the construction starts, inspect all elements of the building site and document their condition.

Phase 2 – Designing

Taking into account the size and complexity of the restaurant, a preliminary design is formed during meetings between all the parties. If the project is over budget, contractors will try to ‘value engineer’ the design and features of the space. Once the initial design and budget are finalized, the project proceeds to full architectural design. This includes civil, structural, electrical, and mechanical aspects of the restaurant. Your engineer and designer will together draw a kitchen layout that integrates all the electrical and plumbing connections to the kitchen equipment and is installed correctly.

Phase 3 – Construction

Once your restaurant project is under construction, timely meetings will be held between owners and the design-build team to coordinate construction items such as scheduling, progress, materials, and equipment that will be used in building. Owners and project managers will periodically visit the construction site to check all the tasks are progressing according to the plans hammered out in the initial phase. Followed by these site walkthroughs, owners can request changes in design and building features to improve functionality of the restaurant. This is called ‘change order’. Then, the installation team will install kitchen equipment at the end of the construction phase.

Phase 4 – Post Construction

Once your project construction is complete and built for its intended use, it reaches ‘substantial completion’. A thorough site inspection will be conducted by the contractor, architect, and owner. If there are any alterations to be implemented, a punch list is created and issued to subcontractors to fix those punch list items. After the required work is complete, a final walk-through with the owner takes place to make sure all work is complete and to satisfaction.

Finally, we then work with the local building official to get the final ‘Certificate of Occupancy’. After this is received your project moves into the warranty period. This typically lasts for one year and covers any defects in craftsmanship or material failure.

Restaurant Construction Companies

Industry statistics show that there are 2,601 restaurant construction businesses in the US as of 2023. When choosing the right contracting firm for your project, in-depth research and due diligence are prerequisites.

Focus on their accreditation and certifications, project portfolio, and crosscheck each contractor’s license with the local licensing board. Consider the company’s experience in the industry, client reviews, and the range of restaurant construction services the contractor provided. Some contractors are proficient at new restaurant build-out, while others hold expertise in restaurant renovation and remodeling.

Make sure you request competitive quotes from at least 3 candidates. Asking for multiple bids is the surest way to receive a fair-priced bid involving the complete scope of work.

Conclusion

As a newcomer, the process of planning, designing, and constructing your new restaurant may seem like an arduous journey. However, by following a step-by-step guide, you can better envision different phases of the project and act accordingly. Determine the goals of your business, chalk out a well-defined plan, and hire the right construction firm to be with you every step of the way.

Whether you are planning to remodel an existing space, or design a new restaurant building from the ground-up, Constructive Solutions, Inc. will assist you along the way.

Relevant Resources:

• What You Should Know About Ground-up Construction Permits
• What Is Interior Construction Contractor and Why Should You Hire Them?