How Much Does It Cost to Open a Restaurant in Canada?

If you’ve dreamed of turning your passion for great food and hospitality into a business, you might be wondering about the costs to open a restaurant in Canada.

According to 360 Restaurant Consultant, starting a restaurant can cost anywhere from $250,000 to $1,000,000 on average, depending on your concept, location, size and whether you’re building from scratch or taking over an existing space.

Smaller quick-service concepts may cost less, while in major metropolitan areas like Toronto and Vancouver, your initial investment will likely be on the higher end of the range when you factor in buildout, equipment, staffing and operating reserves.

This guide covers startup costs by restaurant type, key expense categories, ongoing monthly costs and how to create a practical restaurant startup plan.

Startup costs by restaurant type

Restaurant startup costs vary significantly depending on your concept, service model and location. Below is a breakdown of common restaurant types and their estimated startup costs in Canada, along with what those costs typically include.

Quick-service restaurant costs ($250,000–$400,000)

Quick-service restaurants (QSRs) such as sandwich shops, burger counters or pretzel stands typically have lower startup costs because of smaller footprints, streamlined menus and limited table service.

Expenses usually include lease deposits, basic kitchen equipment, limited dining furniture, POS setup, initial inventory and staff hiring and training. QSRs often operate in high-traffic retail areas, food courts, or near schools and offices, which can influence rent but may reduce marketing costs due to built-in foot traffic.

Fast casual restaurant costs ($400,000–$700,000)

Fast casual restaurants combine counter service with higher-quality ingredients and more thoughtful design. Startup costs are higher due to larger kitchens, custom interior branding, expanded seating areas and more sophisticated online ordering systems.

While labour costs may still be lower than full-service restaurants, fast casual concepts often invest more upfront in brand experience and technology.

Full-service restaurant costs ($700,000–$1,000,000+)

Full-service restaurants require a larger footprint, a full dining room buildout, extensive kitchen infrastructure and higher staffing levels. Startup costs often include bar construction, ventilation systems, decor, liquor licensing and significant working capital. In major cities, these concepts can exceed $1 million depending on location and design complexity.

Food truck costs ($75,000–$200,000)

Food trucks offer a lower-cost entry into the restaurant industry – launching a food truck in Canada can cost between $30,000 and over $200,000 – but still require investment in a commercial vehicle, kitchen installation, city permits, branding and mobile POS systems. While rent is typically lower, operators must budget for commissary kitchen fees, fuel, maintenance and event-based variability in revenue.

Franchise restaurant costs ($30,000–$500,000+)

Franchise restaurants come with established branding and operational systems but require higher initial investment bigger brands like Tim Hortons. Costs typically include an upfront franchise fee, required buildout specifications, approved equipment purchases, royalty payments, marketing fund contributions and mandated technology systems.

According to Franchise Direct, startup costs for a food franchise business can vary from as little as $30,000 to over $500,000 depending on the brand.

Restaurant startup cost breakdown

When you open a restaurant, you’ll face several upfront and ongoing expenses. These costs generally fall into two categories:

• One-time startup costs, such as permits, kitchen equipment, renovations and furniture.
• Ongoing operating costs, including rent, payroll, ingredients, utilities and marketing.

 

Understanding these categories makes it easier to build an accurate budget and avoid surprises.

One-time startup costs

One-time startup costs are the expenses you incur before your restaurant opens its doors. These typically represent the largest upfront investment and can vary widely depending on your location and concept. One-time startup costs usually include several major expense categories.

Commercial space

Leasing a space is a common path to opening a restaurant, as it offers a faster and less capital-intensive way to get started. That said, buying a location gives you more control and stability – and the opportunity to own an appreciating asset.

Whether you choose to buy or lease, real estate prices vary widely by city and neighbourhood. Here are recent averages from Statistics Canada’s commercial rents services price index for some of the country’s biggest cities:

• Toronto: $119.6/sq. ft.
• Vancouver: $121.2/sq. ft.
• Montreal: $120.1/sq. Ft.

 

There are also upfront costs involved in securing your space. According to the BDC, you’ll typically need a down payment of at least 20% of the property’s value to finance the purchase of a commercial property. With a lease, you’ll need to make a security deposit – usually one to three months of rent.

If renovations are needed, restaurant construction costs in Canada range between $150/sq.ft. for a basic buildout to over $500/sq. ft. for a higher-end project, according to GTA General Contractors.

Kitchen and cooking equipment

Commercial kitchen equipment represents a major upfront investment.

Typical costs include:

• Ovens, grills, fryers, and ranges
• Refrigerators and freezers
• Prep tables and stainless steel workstations
• Dishwashers
• Smallwares and utensils

 

A full commercial kitchen setup can cost between $10,000 to $50,000 according to Restaurant Supply Ltd. Leasing equipment instead can reduce upfront cash requirements. Operators often try to balance buying new equipment with purchasing certified pre-owned items to manage costs.

Permits and licences

Before serving your first customer, you’ll need to secure all required municipal, provincial/territorial and federal permits and licences. Requirements vary by location, but common costs include:

• Business licence
• Food premises permit
• Liquor licence (if applicable):
• Signage permits
• Occupancy permit (or certificate)
• Building permits and inspections (if renovating)
• SOCAN music licence
• Patio permit (if applicable)

 

Total permit and licence costs for a new business in Canada can range from hundreds to thousands of dollars, and some of these fees may be renewable annually.

A small business lawyer can help you navigate regulatory requirements with more confidence, but you’ll need to budget for legal fees when hiring one. According to Winright Law, it can cost you from $200–$500 per hour depending on the experience and expertise of the attorney.

Alternatively, you can use the BizPal search tool to determine the exact permits and licences needed for your restaurant and location.

Restaurant technology

Your tech stack is the operational backbone of your restaurant. A POS system like Square for Restaurants lets you accept payments, track sales and performance, manage inventory and more.

POS costs may include:

• POS hardware (registers, tablets, receipt printers, cash drawers, self-service kiosk, kitchen display system)
• Payment processing setup
• Software subscription fees
• Installation and onboarding

 

With Square for Restaurants, there are no contracts or setup fees, and you only pay a small fee when you take a payment. Once you pick your hardware, which includes options like Square Stand ($249 per tax) or Square Handheld ($449 plus tax), you can get started for free.

The basic subscription includes what you need for day-to-day service and operations, from order entry to table and menu management. You can add Square KDS (Kitchen Display System) for $20 a month per device to further streamline operations.

Refurbishment and decorations

Your dining room sets the tone for the guest experience, but it can also strain your startup budget if not planned carefully. Turning your vision into a reality may include upgrades such as:

• Lighting fixtures
• Tables, chairs, booths and bar stools
• Carpets or flooring work
• Paint or wallpaper
• Window treatments e.g. blinds, curtains or shades
• Decorative elements and artwork

 

Depending on size and design level, restaurant interior design can cost anywhere between $85 to $500 per square foot (buildout included), according to BuildIt. For a 600-square foot restaurant, this translates to a $51,000 to $300,000 range. Strategic design choices like buying used furniture can create a strong atmosphere without overspending on large-scale renovations.

Ongoing operating costs for restaurants

When looking at how to manage a restaurant and the recurring costs that go into it, obvious expenses will come to mind like food and alcohol. But an owner should think about operating costs as well. Your operating costs encompass everything that keeps your restaurant running and they span a broad spectrum, from the cost of employees to the actual cost of the building. These costs repeat monthly and must be carefully managed to maintain healthy margins.

Below are the core operating costs most restaurant owners manage on a regular basis.

Building costs

Your building cost becomes a fixed monthly obligation from day one. Unlike food or labour, which can fluctuate with sales volume, rent or mortgage payments are due regardless of how busy the week was.

Ongoing building costs typically include:

• Rent or mortgage payments
• Property taxes (if owned)
• Maintenance fees
• Property insurance

 

Because rent or mortgage is a fixed expense, it has an outsized impact on profitability, especially during slower months.

Ingredients

Ingredient costs directly affect your margins every single day. Even small fluctuations in supplier pricing or portion control can impact profitability over time. On average, direct costs like food and beverage ingredients represent nearly 36% of total operating expenses for the food services and drinking places subsector, according to Statistics Canada.

Ongoing ingredient expenses include:

• Raw food inventory
• Beverages and alcohol
• Specialty or seasonal ingredients
• Spoilage and waste

 

Tracking inventory levels and monitoring usage patterns can help reduce waste and identify pricing issues early. Restaurant inventory management software can simplify this process. For example, Square Restaurant Inventory by Marketman allows you to track ingredients in real-time, automating repetitive inventory tasks and reducing food costs.

Training

Training is not a one-time event. New hires, menu updates, and system changes all require continued onboarding and oversight. Your restaurant point-of-sale software and other administrative systems should be easy to learn and execute, to cut down on training time.

Training costs may include:

• Paid onboarding hours
• Manager time spent training
• Training materials
• System and POS instruction

 

Clear processes and intuitive systems can reduce training time and improve consistency across locations.

Tableware

Tableware is easy to overlook, but it requires ongoing replacement. In high-volume environments, breakage and wear are unavoidable.

Recurring tableware costs may include:

• Plates and bowls
• Glassware
• Utensils
• Napkins and disposables
• To-go containers

 

Planning for regular replacements helps avoid shortages during peak hours and lead to other operational problems.

Utilities

Between lighting, HVAC and food preparation, restaurants consume more utilities than most small businesses. Refrigeration runs continuously, cooking equipment draws significant energy and dishwashing increases water usage. According to Carve Real Estate, monthly utility costs can exceed $2,000 depending on the size of the space and equipment demands.

Utilities generally include:

• Electricity
• Gas
• Water and sewer
• Waste collection
• Internet and phone services

 

Monitoring energy usage and maintaining equipment can help keep these costs predictable.

Chefs

Kitchen leadership plays a central role in food quality, consistency and staff management. Chef compensation is an ongoing investment in the performance of your back-of-house operations.

Chef-related costs may include:

• Executive chef salary
• Line cooks and prep cooks
• Benefits or bonuses

 

Indeed data reveals that the average executive chef salary in Canada is $67,346 per year, but this can vary depending on market and experience.

Labour costs

Staffing is essential to the guest experience, but it is also one of the largest recurring expenses in a restaurant – and labour costs tend to be higher in larger cities with a higher cost of living and more competition for talent.

From front-of-house labour like servers, floor managers, hosts and bartenders to back-of-house employees including all kitchen staff, you are responsible for hiring, training and paying all employees at your restaurant. Employee costs also go beyond wages. They include the full cost of employing and supporting your team.

These expenses may include:

• Hourly wages and salaries
• Payroll taxes
• Employer payroll contributions like Canada Pension Plan (CPP) and Employment Insurance (EI) premiums
• Employee benefits
• Overtime
• Employee management technology

 

Labour often accounts for 25% to 35% of revenue, depending on service style and staffing model. Careful scheduling with a tool like Square Shifts, which is free for up to five team members, and clear performance expectations help keep labour aligned with sales.

Statistics Canada data shows that the average hourly wage in Canada’s food service sector was $19.15 in 2024. This means that for a team of 10 people working 25-35 hours per week each, your monthly payroll costs could range between $20,700 and $29,000.

Equipment

Smart restaurateurs are proactive about equipment servicing and maintenance. Allocating a budget to maintain kitchen equipment helps prevent issues like a costly, unexpected repair that disrupts operations and causes spoilage.

Ongoing equipment-related costs may include:

• Specialized appliance care e.g. lubricating a soft serve machine or calibrating temperature sensors
• Regular cleaning
• Part replacements
• Maintenance service contracts
  

 

According to Boh, a healthy range for maintenance costs is 1% to 2% of your annual sales – and that should include both emergency fixes and planned maintenance.

Payment processing

Many POS systems operate on a monthly subscription model. Payment processing fees vary based on transaction volume and payment type, such as in-person or online payments.

A multichannel restaurant POS system like Square for Restaurants can centralize payments, reporting, inventory tracking, and online ordering into one platform, with no required monthly software fee.

With Square, processing fees are straightforward:

Card-present payments:

• 2.5% per transaction when a customer taps or inserts a credit card (Visa, Mastercard, American Express)
• 0.75% + 7¢ per debit transaction

 

Card-not-present payments:

• 3.3% + 15¢ when you manually key in a customer’s card details or use a card on file
• 2.8% + 30¢ when a customer makes an online purchase or pays an invoice online

 

Advertising and marketing

Marketing helps drive both new customer acquisition and repeat visits.

According to 360 Restaurant Consultant, restaurant marketing startup costs often range from $10,000 to $30,000, but most restaurants invest consistently in advertising.

Ongoing marketing expenses may include:

• Social media advertising
• Email campaigns
• SMS promotions
• Loyalty programs
• Local sponsorships or partnerships
• PR outreach

 

That said, you don’t need to spend thousands if your budget is tight. The right tools and DIY digital marketing tactics can help increase your reach and visibility.

For example, Square Online lets you launch a professional, mobile-friendly website for free, while Square Marketing combines promotions, messaging and loyalty in one system to simplify campaign management. Regularly posting content like photos of your signature dishes or behind-the-scenes videos on social media can also help build your online presence.

Insurance

There are unique risks that come with running a restaurant, from food spoilage caused by a broken fridge to alcohol-related incidents involving customers. Specialized restaurant insurance can help protect your business, staff and customers.

Here’s what restaurant insurance coverage may include:

• Coverage for customer injuries and related legal claims
• Insurance that protects the building and equipment from fire, flooding or other damage
• Income protection if the restaurant has to close temporarily after a covered event
• Liquor liability protection for incidents involving intoxicated patrons
• Coverage for sudden breakdowns of essential kitchen equipment
• Protection if a customer claims foodborne illness or harm from a meal
• Commercial auto insurance for vehicles used for deliveries

 

The exact premiums depend on your unique business type and insurance policy, but most restaurants pay about $1,000 to $5,000 a year for insurance, according to Rates.ca.

Creating a restaurant startup cost plan

A startup plan helps you prioritize spending, protect cash flow and avoid overspending in areas that don’t directly support revenue. It also helps you make the right tradeoffs early, before costs become fixed. Below are key areas where thoughtful planning can reduce financial strain:

Equipment

You don’t always need the latest equipment. Purchase what you will actually use based on your menu and expected customer volume.

Technology

Just as with equipment, you want to find the best technology for your specific business. Start with an integrated restaurant POS system, which can handle your restaurant payments, receipts, inventory and much more. It should make your life easier and promote business growth.

Decorations

It’s easy to become attached to high-end finishes or statement pieces. Instead, focus on durability, layout efficiency and a cohesive look.

A few intentional design elements that reflect your concept often have more impact than filling the space with decor.

Creating awareness

Marketing is an essential component of your restaurant’s success, but many owners tend to overspend on unnecessary strategies.

Choose tactics that have a high return on investment (ROI) . Rather than relying on one-time promotions, think about how you will build repeat visits. Loyalty programs, email marketing and a consistent digital presence, especially on social media, can support long-term growth more effectively than a single launch.

When starting a restaurant, the risk of failure is a top concern for all owners. Planning restaurant startup costs can help you greatly mitigate restaurant risks and better strategize for success.

Restaurant start-up cost FAQs

How much do you need to open a restaurant in Canada?

Opening a restaurant in Canada typically costs between $250,000 and $1,000,000 depending on your concept, location, and size, according to 360 Restaurant Consultant. Smaller quick-service concepts may cost less, while full-service restaurants in major cities can exceed $1 million once buildout, equipment, staffing, and operating reserves are included.

How profitable are restaurants in Canada?

Data from the Government of Canada’s Canadian Industry Statistics portal shows that 57.7% of restaurants are profitable. For those restaurants, the average profit margin is roughly 8%. In other words, it is possible to turn a profit – but not guaranteed. Managing costs effectively can help set your restaurant up for success and protect profits.

How long does it take for a restaurant to become profitable?

Many restaurants take one to three years to reach consistent profitability. The timeline depends on rent, labour costs, food cost control, pricing strategy, and how quickly customer demand builds after opening.

How does Square help reduce restaurant startup and operating costs?

Square helps restaurants manage payments, inventory, staffing, and customer engagement within one system. By consolidating tools like POS, online ordering, reporting, and loyalty, restaurants can simplify operations and reduce the need for multiple software subscriptions.