Depending on your location, equipment, furniture, and rent, the average startup cost to open a pop-up restaurant can range from as little as $125,000 to well over $500,000.
If you are planning to open a pop-up restaurant, having an idea of what pop-up restaurants are all about will give you a clear picture of how much it will cost you to open such a restaurant.
Basically, a pop-up restaurant, which some people also refer to as a pop-up dining experience or a temporary restaurant, is a short-term dining establishment that operates for a limited time in a temporary location.
Pop-up restaurants are restaurants designed to serve areas where you do not necessarily need to build a permanent restaurant to be able to serve your target audience.
No doubt, there is no fixed amount when it comes to how much it will cost you to open a pop-up restaurant because there are some key factors that can influence the cost of opening a pop-up restaurant.
Factors That Influence the Cost of Starting a Pop-up Restaurant
The Location of Your Pop-up Restaurant
If you are considering renting a pop-up restaurant in a high-traffic, and prime location in a popular part of your city, then you should expect the rent to be more expensive when compared to setting up your restaurant in a less visible or unconventional space.
Over and beyond, most pop-up restaurants are usually in highbrow areas, and because of the short-let nature of the business, they are usually expensive.
The Duration of Your Pop-up Restaurant
The fact that pop-up restaurants operate for a limited time in a temporary location makes the rent expensive. In essence, the length of time your pop-up restaurant will operate will affect the overall costs of opening the pop-up restaurant.
For example, a one-night pop-up restaurant event will cost less to open and will have significantly lower operating costs when compared to a pop-up restaurant that runs for several weeks or months.
Your Menu and Food Costs
What this means is that the complexity of your menu and the quality of ingredients you use in preparing the menu will influence your overall budget.
For example, if you plan to set up a pop-up restaurant that will offer a high-end, gourmet menu, then you will require a larger budget for ingredients. But generally, pop-up restaurants usually spend big on menu and food costs.
The Cost of Hiring Employees
Trust me, you cannot operate a pop-up restaurant on your own, you will need key employees to work with you. For that reason, you should create a budget for hiring and compensating your employees. You should make plans to hire a manager, chefs, servers, bartenders, kitchen assistants et al.
Your Budget for Marketing and Promotion
If you want to attract the right audience for your pop-up restaurant, then you must be ready to spend more to market and promote the restaurant.
When we talk about marketing and promotion for a pop-up restaurant, we are talking about expenses covering designing promotional materials, advertising, social media marketing, and event photography.
Interestingly, there is no limit when it comes to how much you are expected to spend on marketing and promoting your pop-up restaurant.
The Cost of Decor and Equipment
Pop-up restaurants usually adopt a theme to work with, and depending on the theme or concept of your pop-up restaurant, you will be required to spend a substantial amount of your budget on decor, furniture, and equipment.
The Cost of Obtaining the Required Licenses and Permits
In the United States, and in most countries of the world, you cannot open a pop-up restaurant without having the required licenses and permits.
In essence, obtaining the necessary licenses and permits is essential if you want to operate your pop-up restaurant legally, and failure to secure the proper licenses and permits can result in fines or the closure of your pop-up restaurant.
You should budget for a business license, food service establishment permit, health department permit, food handler’s permit, fire department permit, alcohol beverage license (if serving alcohol),
Temporary food vendor permit, mobile food vendor permit (if operating from a food truck), signage permit, music and entertainment license (if hosting live music or entertainment), special event permit (for temporary events),
Outdoor dining permit (if offering outdoor seating), sales tax permit, parking permit (if needed), zoning permit or variance (if required by local zoning regulations), and insurance.
For a pop-up restaurant, miscellaneous may include costs that cover your insurance premiums, utilities, waste disposal, transportation and logistics, repairs, and maintenance, business cards and flyers, guest reservations or waitlist system,
Outdoor seating (chairs, umbrellas, heaters), portable restrooms (if necessary), temporary food prep sink, pest control measures, menu boards or cards, POS system (point of sale), and any other unexpected expenses.
It is important to create a detailed budget that accounts for all potential costs and contingencies before opening your pop-up restaurant.
This will help you manage your finances effectively and avoid unexpected financial challenges during the operation of your pop-up restaurant.
Keep in mind that careful planning and cost management are key factors that can influence the success of your pop-up restaurant business.