Hello all,
This is my first post and I am looking for some advice. My husband and I are trying to figure out if it is smarter to buy an existing pizzeria/sandwich shoppe or start from scratch (We are located in the suburbs of Philadelphia). We really want to do it our way, build the menu, hire our own employees, etc. Has anyone rented out a retail space and converted it into a pizzeria? We are looking at it being about 1100-1500 sq feet with room for a few small tables, so nothing big. We will have to run gas lines to a pizza oven, fryers, flat top grill with hood, stove, etc. I have tried to search online about how much this may cost but I can’t find anything on the subject. I’m guessing we will need to run gas lines, water lines, and build counter space. Any advice would be greatly appreciated! I really don’t want to have to fight to restore a failing business, but I also don’t know if it’s smart to bring another pizza shop into a town and be up against stiff competition. Also, if anyone has advice on whether to purchase an existing business or build our own, we’d like to hear from you. Thanks!
-Maria
Costs for this can get pretty high pretty quick. I recently looked at moving my shop within my plaza and decided not too spend the $100K+. Here’s a rough breakdown of the costs I was looking at off the top of my head:
10 tons of a/c: $10K
Plumb and construct new bathroom: $5K
remaining plumbing: $3-5K
Electrical including replace panel for additional capacity and add three phase: $10-15K+
Phone system purchase and install: $4K
Heat hood purchase and install $7500+
Walk in cooler purchase and install $10K+
Flooring $5500
ceiling $4500
Carpentry $5K
FRP Panels $5K
Sign $2K
Window and wall graphics $1500
Lights $1K
Cabling $1K
Cameras and alarm $1K
Architect $1K
Permitting $2-3K
General Contractor $10K
I’m sure there’s a bunch more expenses that are not coming to mind at the moment. I think the best way to do it is to rent a spot that used to be a pizza shop or restaurant that still has the walk in cooler and hood in place. These will generally have all the plumbing and electrical in place as well and with some small tweaks you can have it set up as you like. When Little Caesars was closing shops quickly 10-15 years ago most towns in the southeast had a couple very viable locations that were basically move in equipment and call for your opening inspection. Unfortunately now you have to be a bit more patient to find a location like this.
Thank you for your response! I did find one place that was fitted out with just the hood and walk in for $5,000 but the rent is really high, so I just haven’t found the right place yet. Most places are delco (I think I used that right, delivery/carryout right?) and are selling for 35,000-60,000. The one place I am looking at is selling for 55,000 but is really small. I am trying to figure out if they are including the price of their menu as intellectual property, because we would be completely redoing it and changing the menu anyway. I might be willing to just take right over an existing business, but this one in particular has a very extensive menu which is a reason I think they are having trouble with it. For example, they have at least 5 different types of french fries which in my experience is just not necessary. It seems like my best option would be to buy an existing business. Thanks.
I’m leasing a new space. My costs are no where near that, but I’m the first tenant, so I’m sure that helps keep costs down. We didn’t have to tear up the flooring to run plumbing, electrical is being installed for us, etc.
However, some of those costs are way out of line in my experience, of which is only halfway through the build on our first store.
I am actually going through the same process. My space is also empty, located in Albany, NY and the landlord has provided a few things. The space is 1800 sq ft included is drop ceiling, lighting, 5 ton ac and heating unit, duct work, 3 phase electrical, sewer line, grease trap connection pipe, utility sink, sprinkler system and 2 handicap accessible bathrooms. I need to rip up concrete floor to connect grease trap to sinks with floor drains build dividing walls, all electrical ran to outlets, gas lines and water lines ran from an outside utility room, flooring, painting and purchase all equipment. I have 2 quotes so far one for $40,000 and one for 57,000 for just the fit out. These quotes also don’t include relocating lighting, duct work, sprinkles, roof patching for exhaust and connecting of equipment or hood system. What I noticed though if you have a little knowledge of what needs to be done you can be your own GC and piece out the work to save costs. I was planning on buy new equipment and now have to settle for used which brings another work load to your table trying to piece a shop together one piece of equipment at a time. I’m trying to do all this while still working a full time job at 60 hours a week so it’s a little difficult. You also don’t want to settle on a location because it would save you money. I had searched 3 years on and off for a location. I too was looking between existing locations and a new space and sometimes it makes more sense to someone to purchase an existing location. I would suggest that you don’t settle keep looking until you find a location that best suits your ideas and model. I hope this was helpful.
If you want to start your own business, I would not spend much time worrying about what the seller says he is selling (intellectual property etc). Just look at what you are buying (equipment/build-out) and decide if that works for you.
For the most part it is ALWAYS a better deal to buy a place that is built out and equipped if you can find one in a location that works for you and the package matches up well with your business plan. Doing a build-out and buying and installing equipment, even if you do it used is a six figure proposition and takes time.
With that said, it is VERY difficult to do a sit-down in the sizes you are talking about. You also have to be NUTS to consider a location that has to have basic utilities like gas brought into it and adding electrical upgrades, hood and trap unless the landlord is paying for those things.
I agree with everyone. Its crazy to do a NEW build-out in this market. Too many failures to take advantage of if you’re serious about dipping your toes into the business. Good luck.
Thank you all for your responses, they really helped a lot. I will definitely stick to my original plan of buying out another business. I will most likely change the name and redo the menu, but I’m sure it will be way cheaper than starting from nothing.
We just opened store #2 which was formerly an eye doctor’s office. We oversaw the whole project, did what we could on our own and I would say the total cost was around $35-40k. Although we saved $$, it was very time consuming. We would never try to convert space again. We would definitely buy an existing shop. There is HUGE value in having it all set up for you.
We’re looking at moving too, into a former veterinarian space. (going from 1260 sq ft delco to 1750 sq ft) There’s a nice floor and ceiling, but a lot of walls need to be removed, plumbing relocated, and we need an ADA bathroom. Our lease where we are now ends February 1. We’ve figured on 10k each for a new vent hood and walk-in. We’re hoping the rest of the costs will be 20-30k. Have a contractor coming out today to give us an idea of the costs before we sign a lease.
Moving will put us closer to the middle of our delivery area, in a nicer center, with more room and increase our rent from 1700 to 2200
If we stay, We’re cramped. We want to be a million dollar store but store is crowded, parking lot is crowded. Also if we stay, we may have to spend money on a new AC, Walk-in (It’s 30 years old- though the compressor is only 3) vent hood (cant upgrade our middleby 360’s without getting a bigger hood)
just don’t want to go broke trying to move
Paul
Hi Maria:
You have received quite a bit of advice.
We Have designed and equipped thousands of pizza shops nation wide. Most, ground up new. Many take overs of existing operations and many moving to better and/or larger locations.
We almost never have a ground up or relocated shop fail. Several of those taking over existing facilities have not been that fortunate but some have done exceptionally well.
In my opinion you best chance of success is to find a good location and put in a shop that reflects your ambitions. Of course that is a more costly option but business success is often determined by how much you invest in your operation.
George Mills
For what its worth I have opened 5 pizza places in 6 years.
only 1 that was an exisiting place was a sucess.
however the ones that I built out from the ground up were all extremely successful
Not saying this is the rule, just my experience