Do you want to start a PHO restaurant and you need a cost breakdown? If YES, here are 13 factors that affect the cost of opening a PHO restaurant. Aside from Chinese and Mexican restaurants, another culture niche restaurant that is emerging in the United States of America is the PHO Restaurant. There are quite a number of PHO restaurants in the United States of America, and you can start yours if you are interested in the business.
If you are a Vietnamese living in the United States and you are looking towards leveraging on the vast population of Vietnamese descent in the US to generate revenue, then one of your best options is to start a PHO Restaurant. The truth is that, if you can successfully start a PHO restaurant in the United States, your clients aren’t going to be just Vietnamese but every other person within your location who loves exploring delicacies.
The PHO Restaurant industry is made up of restaurants that prepare and serve Phở, pronounced “fuh,”. Pho is a Vietnamese soup that is normally made with a bone-beef broth, banh pho noodles, and thinly sliced beef, that’s often served with bean sprouts and other fresh herbs on the side.
Not to be confused with Japanese ramen which is usually made with wheat noodles, pho is made with rice noodles. Food can be prepared to either be eaten on the premises at restaurant locations or for take-out. The PHO Restaurants industry is a profitable industry and is open for any aspiring entrepreneur (not just Vietnamese) to come in and establish his or her business.
The Estimated Cost of Opening a PHO Restaurant
When it comes to starting a PHO restaurant, the major areas that you should look towards spending the bulk of your cash is in renting or leasing a standard facility, equipping the restaurant facility, and purchasing all the needed utensils, wares, and supplies. You also need to pay your employees and utility bills.
These are the key areas where you will spend your startup capital;
- The total fee for registering the business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
- Marketing promotion expenses for the grand opening of the PHO restaurant in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- The total cost for hiring a business consultant including writing a business plan – $2,500.
- The total cost for the purchase of insurance (general liability, workers’ compensation and property-casualty) coverage at a total premium – $2,400.
- The cost for renting or leasing a facility that will be converted into the PHO restaurant and that can accommodate the number of customers that will be accommodated per time (Reconstruction of the restaurant facility inclusive) will cost – $300,000.
- Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
- The cost for insurance (general liability, workers’ compensation and property-casualty) coverage at a total premium – $2,400.
- The cost for payment of rent for 12 months at $1.76 per square foot in the total amount of $105,600.
- The cost for construction of a standard PHO restaurant and kitchen – $100,000.
- Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $100,000
- The cost for start-up inventory (cooking ingredients, alcoholic drinks, soft drinks, beverages, coffee and serving wares et al) – $80,000
- Storage hardware (bins, rack, shelves, food case) – $3,720
- The cost for counter area equipment (countertop, sink, ice machine, etc.) – $9,500
- The cost for store equipment (cash register, security, ventilation, signage) – $13,750
- The cost of purchase of delivery vans – $50,000
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
- The cost of launching a website – $600
- The cost for our opening party – $10,000
- Miscellaneous – $10,000
From the rough estimate above, you would need a minimum of six hundred and eighty – seven thousand, seven hundred and eighty USD ($687,380) to establish a medium–scale but standard PHO restaurant business in the United States of America. Please note that this amount includes the salaries of all the staff for the first three months of operation.
Please note that this is a rough estimate and we usually advise our readers to directly contact wholesalers and suppliers of the types of furniture and utensils they want to have in their restaurant in order to get the real-time prices of these items. The truth is that if you are a good bargainer, you can get a better deal that will help you beat down the estimated price as listed above.
13 Major Factors That Will Influence the Cost Of Opening A PHO Restaurant
Table of Content
- The Type of PHO Restaurant
- The Choice of Location
- The Required Licenses and Permits
- The Type of Facility
- The Number of Customers You Want to Admit
- The Cost of Hiring and Paying a Business Consultant and Attorney
- The Cost for Branding, Promotion and Marketing of the PHO Restaurant
- The Cost for Furnishing and Equipping the Restaurant
- The Cost for Insurance
- The Cost for Registering the Business
- 11. Cost of Recruiting and Training Your Staff
- 12. The Cost for the Purchase and Customizing of Uniforms
- 13. The Cost for Grand Opening of the PHO Restaurant
The Type of PHO Restaurant
A major factor that will determine the overall cost of opening a PHO restaurant in the United States of America is the type of PHO restaurant the owner of the business wants to start. There are different types of restaurants based on the services they offer and they are;
- Casual dining
- Premium casual
- Family style
- Fine dining.
Please note that these different types of restaurant styles come with different cost implications when starting the business.
The Choice of Location
Another major factor that will determine the cost of opening a PHO restaurant in the United States of America is the location. In business, location is a key part of what determines the success of the business. As a matter of fact, there are business consultants cum realtors who are specialized in helping people choose an ideal location for their type of business.
Renting or leasing a restaurant facility in a location that is off the city center or off a residential estate will be less expensive when compared to renting or leasing a facility in a well–populated and growing residential estate; a location in a metropolitan city with the right demographic composition of people who can afford to patronize your restaurant.
The Required Licenses and Permits
In the United States of America, you cannot open a PHO restaurant without first applying for the mandatory license and permits. Of course, you would need an accreditation certificate, building license, zonal permits, and signage permits amongst others. As expected, these license ad permits cost money and it will influence the overall cost of opening a PHO restaurant in the United States of America.
Please note that you must pass different inspections before you can be issued your permits and this will also cost you money. In order to get the overall cost of licensing and permits associated with opening a new PHO restaurant in the United States, we will advise that you reach out to your city government.
The Type of Facility
The type of facility you want to run your PHO restaurant business from is also a major factor that will determine the overall cost of opening a PHO restaurant business in the United States of America. As regards the facility, you have the option of renting, leasing, or constructing your own PHO restaurant from the scratch.
With renting and leasing a facility, you might just have to spend extra to modify the restaurant facility to fit into what you have in mind, but there is a limit to how far you can go and it will be dependent on what the landlord of the facility wants.
If you want to construct your PHO restaurant from the scratch, you need to buy the land or property, construct and equip the facility to fit into what you have in mind. With that, you will agree that you are going to spend way more when compared to people that rent or lease a restaurant facility.
The Number of Customers You Want to Admit
Another very important factor that determines the cost of opening a PHO restaurant in the United States of America is the number of customers you intend admitting per time. No doubt, there are standard PHO restaurants that can accommodate over 50 customers per time and there are others that can only accommodate less than 20 customers per time.
The more the number of customers a PHO restaurant can accommodate, the more money you are expected to spend to set up and run the restaurant.
The Cost of Hiring and Paying a Business Consultant and Attorney
If you want to get your business started on the right foundation, it will be a wise decision to hire the services of a competent business consultant and perhaps an attorney. A business consultant will help with drafting a workable business plan document, a marketing plan and strategy, comprehensive SWOT analysis, and other advisory services that will help you with opening the business.
So also, an attorney will help you with registering the business, drafting contract documents and offer you all the legal expertise that will help you start the business on the right foundation. Of course, you will agree that these services will cost you money and it will indeed influence the overall cost of opening a PHO restaurant in the United States of America.
The Cost for Branding, Promotion and Marketing of the PHO Restaurant
The cost for branding, promoting, and marketing the PHO restaurant is yet another key factor that will determine the overall cost of opening a PHO restaurant in the United States of America. Trust me, if you need massive results as it relates to competing and winning a fair share of the available market in your city, then you must be willing to pay for effective branding, promotion and marketing of your new PHO restaurant.
As a matter of fact, it is not cheap to come by an expert in branding, promotion and marketing that will help you compete with brands that are already determining the market direction of the ethnic restaurant industry in your city. So, if you add the cost of paying a branding and marketing expert, it will surely increase the cost of opening your PHO restaurant.
The Cost for Furnishing and Equipping the Restaurant
Another very important factor that will determine the cost of opening a PHO restaurant is the cost of furnishing and equipping the restaurant. Before you can open a PHO restaurant, you should budget and buy dining chairs and tables, fridge, deep freezer, cooker and serving wares ad utensils, flat-screen TVs, sound system, DVD players,
Satellite dish and decoder, drawers and cabinets, telephones, filing cabinets, office equipment (cash register, security and fire alarm and protection gadgets, CCTV, ventilation, signage), amongst others. All these will cost money and it will influence the overall cost of opening a PHO restaurant in the United States of America.
The Cost for Insurance
The cost of insurance is yet another important factor that will determine the overall cost of opening a PHO restaurant in the United States of America. Interestingly, in the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from.
Thus, it is imperative to create a budget for insurance policy cover and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your own PHO restaurant business.
The Cost for Registering the Business
The cost of registering a PHO restaurant business is yet another cost that will influence the overall cost of opening a PHO restaurant in the United States of America. Although the cost of registering a business is affordable, it will no doubt add to the overall cost of opening a PHO restaurant in the United States of America.
11. Cost of Recruiting and Training Your Staff
The fact that you are opening your PHO restaurant as a new business means that you are expected to recruit and train your staff. The training will help you sell the corporate culture of your organization to the new employees. As expected, it will cost you money to hire expert trainers that will help you train and bring your new hires up to speed and that will add to the overall cost of opening a PHO restaurant.
12. The Cost for the Purchase and Customizing of Uniforms
Another factor that will determine the overall cost of opening a PHO restaurant business in the United States is the cost for the purchase and customizing of uniforms. As expected, your waiters and waitresses, bartenders, kitchen staff, chefs, and of course security personnel have different uniforms and they are expected to put on these uniforms when on duty. All these uniforms will cost you money which is why it must be part of your budget if you are looking towards opening a PHO restaurant in the United States of America.
13. The Cost for Grand Opening of the PHO Restaurant
In recent times, no PHO restaurant opens its door for business without first organizing an opening party to officially launch the business. This means that the cost of the grand opening will determine the overall cost of opening a PHO are restaurant business in the United States of America.
You can choose to do a soft opening if you are operating on a low budget or you can choose to go for a grand opening party. The bottom line is that it is a cost that must be part of your budget and this cost will influence the overall cost of opening the PHO restaurant in the United States of America.
Please note that there are other factors not listed above that will surely influence the overall cost of opening your PHO restaurant which is why we will advise that you work with a result-driven business consultant in your city to give you the needed guide and info as it relates to the unique factors in your location.
Frequently Asked Questions
What Makes Pho Unique?
The term Phở actually refers to the noodles, not the soup itself, and although there are several soup dishes in Vietnamese cuisine, Phở is the only one that uses pristine white flour noodles. A Phở’s quality is judged by the broth, and a good bowl of Phở is crystal clear, with plenty of flavors.
How Do You Open A Phở Restaurant?
- Conduct your feasibility studies
- Learn Everything you need to learn about Phở restaurant business
- Choose a name and register the business
- Draft a detailed Business Plan
- Secure the needed licenses and permits
- Apply for an EIN (Employer Identification Number) / Federal Tax ID Number.
- Open a corporate bank account
- Lease and equip your restaurant facility
- Source for ingredients and supplies
- Hire employees
- Market and promote your Phở restaurant
How Much Does It Cost To Open A Phở Restaurant?
At the simplest level, the typical cost will be in the neighborhood of $50K at the low end to more than $500K at the higher end.
How Would You Describe A Bowl Of Phở?
In its most basic form, a bowl of Phở consists of a foundation of rice noodles topped with thinly sliced raw beef, which gets cooked when a portion of steaming, spiced beef broth is poured over the top.
What Is A Good Side Dish For Phở?
You can add your veggies — bean sprouts and Thai basil — into the soup. If you prefer something a little sweeter and spicier, you can add hoisin sauce and sriracha, before squeezing them into a separate small plate to dip your meat in. If you like it bland, eat it as is.
Why Do Phở Restaurants Have Numbers In Your Names?
Many Phở restaurants have names with numbers in them. After the Vietnam War, when Vietnamese refugees settled in the United States and across the world, Vietnamese restaurateurs started using numbers with strong personal or numerological significance in their restaurant names instead.
How Do You Cook Phở Noodles?
You boil them in a similar way you cook spaghetti so remember to check the noodles regularly to make sure they are not overcooked and after draining, keep them under cool tap water for a couple of minutes to stop them from sticking together.
What Is Real, Authentic Phở?
Real, authentic Vietnamese Phở is a soup made with a beef broth rich with ginger, onions, star anise, fish sauce, and onions. Into that go rice noodles, beef, scallions, bean sprouts, and fresh herbs.
How Much Does It Cost To Open A Phở Hoa Franchise?
To buy a franchise with Phở Hoa, you will need to have at least $100,000 in liquid capital and a minimum net worth of $250,000.
How Do Store Leftover Phở Rice Noodles And Meat?
Put the noodles, meat, and garnishes in a separate airtight container to the broth and keep it in the fridge. The leftovers will last up to 2 days but aim to use them as soon as possible.
How Much Does A Phở Hoa Franchise Owner Make?
Your income potential as a Phở Hoa Franchise entrepreneur depends vastly on many factors. As an entrepreneur, the goals to achieve are related to expanding sales while lowering your operation costs and increasing the quality of your products and or services.
Each month your operating costs can include royalty fees, mortgage or rent, supplies for products, staffing, utilities, bookwork, stationary, and other items. From one month to the next, you may find your costs fluctuate, but your up-front costs are, for the most part, fixed and they will cover most of the initial setup of equipment, signage, and renovations.
How Much Does It Cost To Make A Bowl Of Phở?
The total cost of a bowl now ranges from $1.96 to $3.42.
Why Does Phở Taste Like Licorice?
There are two ingredients in a typical Phở meant to impart a hint of licorice-like flavor, specifically star anise and fennel seeds. Star anise is native to southeast Asia. Please note that Star Anise is a key Phở spice. It adds a slightly bittersweet and licorice-like aroma and taste to Phở broth. Cinnamon or cassia bark is another crucial spice and infuses the broth with a wonderfully warm and earthy aroma.
What Are Monthly Expenses For A Restaurant?
- Occupancy cost.
- Food cost
- Liquor cost
- Labor cost
- Inventory variance and shrinkage.
- Kitchen equipment cost.
- POS system cost.
- Marketing and advertising costs.
What Uses The Most Electricity In A Restaurant?
Nationally, restaurants use the most electricity for refrigeration and cooking. Cooking makes up roughly two-thirds of natural gas usage, and the remaining third is split fairly evenly between water heating and space heating.
Why Is Phở So Popular?
The popularity of Phở broth (and ramen) soups may be due to a new appreciation of the sustaining benefits of broth. Americans have long understood the goodness of broth. One of America’s best-selling commercial soups is Campbell’s ‘chicken noodle soup’ which is basically broth in a can.
Is Phở High In Carbs?
Phở is low-calorie for what it packs in it. There are roughly 30 grams of protein, 40 grams of carbs, and 425 calories in a medium bowl of Phở. If you were to have Phở for breakfast, lunch, and dinner, it would amount to a very respectable 1,275 calories.
Is Phở Healthier Than Ramen?
One bowl of Naughty Noah’s Vietnamese Phở Noodles contains 200 calories, which is less than ramen because just ½ package of ramen is 190. There are 0 grams of saturated fat and the good fat is 2.5 grams.
Is Phở Healthy For Weight Loss?
Phở is a great weight loss dish with the only real concern being sodium. This doesn’t make it unhealthy. A single bowl of Phở can be an important part of a balanced diet. Help yourself hit your most important weight-loss goals.
Is It Rude To Drink Phở From Bowl?
Yes, it is considered rude to take food from a shared dish and put it immediately in your mouth. Don’t slurp Phở. Don’t lift your bowl off the table and eat with the bowl in your hand.