Should you start a restaurant from scratch or buy an existing one?

By Sean McNeice, LMT Commercial Realty, LLC

Almost every culinary school graduate, bartender, restaurant manager, or naturally hospitable person has, at some point, dreamed of owning their own restaurant. It often starts with the classic “If I had my own place...” conversation — and then, one day, it becomes reality.

When that moment hits — when the dream starts turning into actual plans — a would-be restaurateur has some big decisions to make. One of the biggest? Deciding whether to buy an existing restaurant or start one from scratch.

Each path comes with its own pros and cons. Here are some key points to consider as you weigh your options.

Pros of Buying an Existing Restaurant

• Lower Risk

An established restaurant already has a proven track record. If the business is currently operating and profitable, you’re stepping into something that has already shown it can succeed in the market.

• Built-in Brand and Customer Base

When you acquire a restaurant, you’re also buying its brand recognition, loyal customers, and reputation — all of which take time (and money) to build from scratch. Even if you plan to rebrand eventually, it’s helpful to start with something that’s already working.

• Staff in Place

Staffing is arguably your most valuable resource. Even if the current team isn’t Michelin Star material, they’re trained, familiar with the operations, and showing up to work — which gives you a running start.

• Established Infrastructure

Renovations and installations can be outrageously expensive — from kitchen hoods to sprinkler systems. With an existing space, those elements are already in place. You can operate as-is while making updates over time. Also, the permitting and licensing and inspections that come along with new construction have already been done! Construction delays like these can help burn through budgeted money that you will need when the place is actually open.

• Immediate Cash Flow

Unlike a new restaurant that takes time to build momentum, a running business brings in revenue from day one. With the right transition plan, you can maintain steady cash flow and potentially grow it. Plus, banks and investors often view existing businesses as safer bets, making financing easier to secure.

Pros of Starting from Scratch

• Complete Creative Control

When you start from zero, everything is your decision — the concept, the name, the layout, the vibe, the menu, the service style, the branding — all of it. That kind of freedom is invaluable if you have a strong vision you want to bring to life.

• Tailored to Your Needs

Instead of inheriting someone else’s layout or design quirks, you get to build a space that’s optimized for your workflow, service model, and guest experience.

• Potential Cost Savings (Sometimes)

In some cases, starting from scratch can be cheaper — especially if you secure a new or “clean shell” location with minimal renovation needs. That said, it’s not uncommon these days to see turnkey restaurants (existing spaces with all the equipment and infrastructure in place aka second-generation restaurant) available at very attractive prices.

• No Baggage

You’re not inheriting anyone else’s bad Yelp reviews, outdated branding, or broken relationships with vendors and staff. You start with a clean slate.

The Bottom Line

Today, higher construction costs have made new builds and major renovations far more expensive than in the recent past. That’s why we generally recommend acquiring an existing restaurant business rather than opening a new one.

Whether you choose to buy an existing restaurant or create your own from the ground up, the reality is the same: it will take serious work, commitment, and resilience.

There’s no shortcut to success in the hospitality world — but the path you choose should match your vision, your risk tolerance, and your resources. Either way, it will be your name on the door, and your passion driving the business.

Sean McNeice is a commercial real estate specialist at LMT Commercial Realty, LLC.