What actually drives the cost of a restaurant build-out in Dallas-Fort Worth

The shell, the kitchen and the calendar

The cost of a restaurant build-out is driven mostly by three things: what the landlord hands you, what your kitchen needs behind the walls, and how much time you have. A second-generation space with a working hood, grease interceptor and enough electrical service can cost a fraction of a bare first-generation shell of the same size. After that come the costs outside the construction contract, sales tax, and the price of compressing a schedule. Square footage on its own tells you very little.

At Harrison Construction we build restaurants for operators and national brands, from tenant finish-outs to freestanding buildings, and I get asked for a price per square foot almost every week. I understand why. It is the one number people can compare. But I have seen two spaces of the same size on the same street come in at very different budgets because one had a kitchen's worth of infrastructure already in place and the other had a slab, four walls and a stubbed water line. Here is how I would think through the money before you commit to anything.

Start with what the landlord delivers

Every lease has a work letter, and the work letter decides your budget more than any drawing. It says what the landlord builds before handing you the keys, what condition the space is in, and how much tenant improvement allowance you will receive and when it is paid. A cold dark shell with no ceiling, no restrooms and a single small electrical panel is a very different starting point from a vanilla shell with restrooms, a ceiling grid and HVAC on the roof.

For a restaurant, the expensive question is whether the space has been a restaurant before. A second-generation space may already have a grease interceptor, a hood with a roof penetration, gas service and floor drains. Reusing them can save a large share of the budget, but only if they meet current code and fit your menu and equipment. An undersized interceptor or a hood in the wrong spot can mean you pay to remove the old system and then pay again to install a new one. I explain what to check on a site walk in my guide on telling whether a space can really become a restaurant.

The kitchen and the systems you never see

In most of the restaurants we build, mechanical, electrical and plumbing work is the largest single piece of the budget, and it is set by your equipment list and menu far more than by the size of the dining room. A fryer-heavy concept needs more hood, more exhaust and more make-up air than a concept that mostly assembles cold food. A pizza oven, a walk-in cooler or a bank of soda machines each adds electrical load, plumbing and sometimes structural work on the roof.

Location inside the building matters as much as the equipment itself. A kitchen at the back wall of an end-cap unit, close to the roof access and the existing sewer line, is a straightforward job. The same kitchen in the middle of an inline space, where the exhaust duct has to run a long way to the roof and the slab has to be trenched across the whole unit to reach the sewer, costs considerably more. When a franchisor's prototype layout is dropped into a space without adjusting for where the utilities really are, this is usually where the money goes.

The pieces that move the number the most are worth knowing by name, because they are where estimates differ between contractors and where surprises hide.

• Exhaust hood, ductwork, fire suppression and make-up air
• Grease interceptor and the slab cutting needed to reach it
• Electrical service size, panels and a possible utility upgrade
• Gas service and meter capacity
• Rooftop HVAC tonnage and structural support for new units
• Floor drains, hand sinks and the three-compartment sink
• Walk-in coolers and freezers and their refrigeration

How we pin down a real number before you commit

We do not publish prices, because no two shells are alike and a number given without seeing the space does more harm than good. What we do is pre-construction: due diligence on the site and the lease, conceptual estimating while the design is still taking shape, value engineering, a constructability review of the drawings, a development schedule, bidding with qualified subcontractors and permitting. By the end of it you have a budget tied to your actual space and equipment, with the allowance shown against your own cost.

If you are still deciding between two locations, this is the moment to call. A conceptual estimate on each space, done before you sign, is far cheaper than discovering after the lease is executed that the cheaper rent came with a far more expensive kitchen. I walk through every step of that work in what pre-construction is and why it matters.

Costs that sit outside the construction contract

The construction contract covers the build. A restaurant budget has to cover much more, and these are the items I see left off first-time operators' spreadsheets most often. None of them are optional, and several of them have to be paid before construction starts.

One item surprises people because of the paperwork rather than the price. According to the Texas Department of Licensing and Regulation, projects with a total estimated cost of $50,000 or more must submit a full set of construction documents for accessibility review under the Texas Accessibility Standards, with an inspection by a Registered Accessibility Specialist. Smaller projects still have to comply with those standards.

• Architect and engineer fees for the drawings and permit set
• Permit, plan review and health department fees
• Utility service upgrades and impact or tap fees
• Accessibility registration, plan review and inspection
• The kitchen equipment package, if it is not in the contract
• Signage, furniture, point-of-sale and low-voltage wiring
• A contingency for conditions nobody can see until walls open

Sales tax: a remodel and a first finish-out are taxed differently

Texas sales tax treats commercial construction in a way that catches owners off guard. Under the Texas Comptroller's guidance for contractors, initial finish-out work on a structure counts as new construction, and the contractor's labor on new construction is not taxable. Remodeling, repairing or restoring nonresidential property is different: the Comptroller says the total amount charged for that work is taxable, labor included.

In practice, that means building out a space for the first time and remodeling a former restaurant can carry different tax treatment even when the scope looks similar on paper. How a job is classified depends on the facts, so ask your contractor how they intend to handle it and confirm the answer with your own tax advisor. If you do not have one, a CPA who works with small businesses can tell you how it affects your budget and your books before you sign.

Time costs money twice

Schedule is a cost driver that never shows up as a line item. If the opening date is fixed by a franchisor or by the end of a free-rent period and the permit comes back late, the only way to recover time is overtime, extra crews and expedited shipping on equipment. All of that costs real money. Meanwhile you are paying rent and often payroll on a restaurant that is not serving anyone.

Long-lead items are the most common trap. Hoods, rooftop units, walk-ins, switchgear and custom millwork can take weeks or months to arrive, and they cannot be ordered until the budget and the drawings are settled. Owners who wait to finalize the design until after permit approval usually pay for it in either schedule or premium freight. Decisions made late cost money too: every change after the drawings are permitted can mean revised plans, another review and work that has to be torn out. I go deeper on protecting the date in my guide to finishing a build-out before the free-rent clock runs out.

Where you can save without hurting the opening

Value engineering is not cutting quality. It is finding the cheaper way to get the same result, and it works best early, while the drawings can still change without redesign fees. The best savings I see come from fitting the kitchen layout to existing plumbing and gas locations, reusing infrastructure that genuinely meets code, choosing finishes with short lead times, and simplifying ceilings and lighting in back-of-house areas nobody will see.

Where I would not save: the hood and fire suppression system, the grease interceptor, the electrical service, and anything an inspector or health official will look at closely. Cutting there tends to cost more in failed inspections and rework than it ever saved. And I would never choose a contractor on the lowest number alone. A low bid that leaves out the kitchen exhaust, the utility upgrade or the permit fees is not cheaper. It is incomplete.

What to bring for an estimate you can trust

The more we know, the tighter the number. A rough idea of the concept gets you a rough range; a work letter, base building drawings and an equipment list get you a budget you can take to a lender or a franchisor. We build across Dallas–Fort Worth and in the other states where we are licensed, and the conversation starts the same way everywhere: show us the space and tell us what has to happen inside it.

From there we walk the site, review what the landlord is delivering, flag the systems that will drive cost and give you an honest read on whether the budget and the date fit together. If they do not, you will hear it at the beginning rather than halfway through construction.

• The lease or letter of intent and the work letter
• Base building drawings or any survey of the space
• Your menu concept and kitchen equipment list
• Franchisor design standards, if you have them
• Your target opening date and any lease deadlines

Questions people ask me