If you’re looking for a business that will grow big, look no further than the Chili’s franchise. The best part about this franchise is that it starts off with relatively low franchise costs and fees, so you don’t need to worry about overextending yourself financially.
If you’re looking to open a Chili’s restaurant located within the United States, your average startup cost will be $1,900,000.
Building your first Chili’s will run you anywhere from $1,300,000 to $3,850,000 depending on the size, amount of seating, location, equipment, and build-out cost.
Chili’s initial franchise fee averages $50,000 to get started, including training for up to 6 individuals.
Let’s get started breaking down the cost of opening your very own Chili’s franchise.
- Cost to Open a Chili’s Franchise
- Franchise Costs ($39k – $61k)
- Location ($100k – $300k)
- Building ($1M – $2.5M)
- Site Work ($45K – $215K)
- Renting a Space ($7k – $18k Per Month)
- Renovations on Rental ($100k – $300k)
- Fixtures and Equipment ($150k – $275k)
- Customer Seating Area ($17k – $40k)
- Utilities ($2.5k to $5k per month)
- Building Licenses and Fees ($22k – $35k)
- Signage and Interior Decorating ($20k – $65k)
- Accounting and Legal Fees ($20k – $50k)
- Maintenance and Repairs ($15k – $25k)
- Initial Payroll Cost ($10k – $17.5k)
- Employee Benefits ($3.6k – $12k)
- General Liability Insurance ($5.5k – $15k)
- Employee Compensation Insurance ($3.5k – $7.5k)
- Ongoing Franchise Cost
- Miscellaneous Expenses ($10k-$35k)
- Does a Chili’s Franchise Sound Good?
Cost to Open a Chili’s Franchise
It’s time for you to roll up your sleeves and get to work on opening a Chili’s of your very own. There are several expenses to consider when opening a restaurant; we’ve broken them down for you below.
Some of the expenses you will encounter when opening your first location will include the initial franchise fee, building, site location, equipment, renovation, inventory, and insurance.
Franchise Costs ($39k – $61k)
The franchise fee for Chili’s is an average of $50,000. The cost can vary based on the type of Chili’s franchise you select and if you already have at least one existing franchise location.
Location ($100k – $300k)
To open a Chili’s franchise, you’ll need to choose a location with a high volume of foot traffic and easily accessible by the public. Ensure the site has ample parking spots so no one will have difficulty getting in or out of your restaurant.
You should also find a place that is up to code and has the potential for expansion. Your land will cost you $100,000 to $300,000, depending on the size and location of your site.
Building ($1M – $2.5M)
You’ll need a building to house your Chili’s franchise, and it will cost you anywhere from $1 Million to $2.5 million, depending on the size of the restaurant.
Your average Chili’s is about 4,900 square feet with seating for 160 people. It’s important to note that the larger your building, the more expensive it will be.
You’ll need built-in features like storage space and cooking supplies. Your building will also need to be fireproof and up to code.
Site Work ($45K – $215K)
You’ll also need the necessary site work completed for your Chili’s location, which could cost anywhere from $45,000 to $215,000. Some areas may require you to pay for water and utility hookups, while others may require you to bring in the necessary utilities.
Renting a Space ($7k – $18k Per Month)
You may decide to rent a building for your franchise instead of a new one. This averages $7,000 – $18,000, depending on its size and location.
Choosing this option may save you money in the long run; however, you’ll need to factor in rent plus additional costs like maintenance and property taxes.
Renovations on Rental ($100k – $300k)
When renting a space, you’ll have to pay for renovations to create the perfect Chili’s location. Some of these costs will include painting, flooring, adding kitchen appliances, and making room for new equipment.
Your average renovation cost is around $100,000 but could go up to $300,000 depending on how extensive the renovations are.
Fixtures and Equipment ($150k – $275k)
Based on your location, you’ll need to purchase the necessary equipment required to run your franchise. Chili’s offers a wide variety of equipment ranging from fryers, ovens, ice machines, dishwashers, toasters, and more.
Your average cost for furnishing your restaurant is around $150,000 – $275,000 but may go up depending on the size of the kitchen you need
Walk In Freezer – $10,000 to $20,000 (depends on size)
Refrigerator – $3,000 to $5,000
Ice machine – $2,500 to $5,000
Grill – $2,00 to $4,500
Fryer- $2,000 to $10,000
Steamer – $1,500 to $5,000
Blender – $400 to $1000
Stand Mixer- $1000 to $1500
Bar Tap – $10,000
Oven – $4,000 to $10,000
Dishwasher – $3,500 to $7,500
Coffee Maker – $400 to $700
Cooking Supplies ($15k – $22k) You’ll need to build an adequate supply of cooking equipment. This includes pots, pans, utensils, and other items.
This is some of the most basic equipment to get your new restaurant up and running, which can vary greatly depending on if you choose to buy used or new equipment.
Customer Seating Area ($17k – $40k)
Once you have the main building structure finished, you will need to set up your dining area. You can choose to create an open or closed concept depending on the location of your restaurant and what kind of atmosphere you want to make.
Your average cost for setting up this area is around $17,000 to $40,000.
Utilities ($2.5k to $5k per month)
You’ll also need to pay for water, electric, and gas utilities. These average about $2,500 to $5,000 per month but can go up depending on the size of your location.
Building Licenses and Fees ($22k – $35k)
Depending on how your location was established, you’ll need to pay building fees. If the restaurant is being built from scratch, there are permit costs that you’ll have to pay for.
There are also license fees involved in establishing a new franchise which will cost you $22,500 to $35,000.
Chili’s offers alcohol which means you will need a liquor license.
Signage and Interior Decorating ($20k – $65k)
Chili’s will provide you with all of the necessary signage needed for your location; however, if you decide to use an exterior sign company, they can be expensive and run upwards of $15,000 – $25,000.
You’ll be responsible for decorating your Chili’s location. This starts with building an attractive exterior, adding landscaping that is up to Chili’s standard, and painting your restaurant’s interior.
Depending on how extravagant you want it to look, you can expect this cost to range anywhere from $20,000 – $65,000.
Accounting and Legal Fees ($20k – $50k)
You’ll be responsible for various accounting and legal fees that can vary greatly depending on how much assistance you need. It could cost anywhere from $20,000 to $50,000. Having an accountant on staff is highly recommended to avoid issues with taxes.
Maintenance and Repairs ($15k – $25k)
You’ll need to pay for maintenance and repairs, which can be costly if your location is damaged or destroyed.
Your average expense here will be around $15,000- $25,000 per year, but it could vary depending on how much equipment is used and what breaks down.
Initial Payroll Cost ($10k – $17.5k)
The initial payroll cost will depend on the amount of staff you have and how many hours they work, but it can range anywhere from $10,000 to $17,500 to get your team prepared for opening day.
Employee Benefits ($3.6k – $12k)
Chili’s offers several benefits for their employees, including medical, dental, and life insurance and 401K plans at no cost to the franchise owner.
Your average total will be around $3,600 to $12,000 a year per employee, but it will ultimately depend on the size of your staff.
General Liability Insurance ($5.5k – $15k)
You’ll need to purchase general liability insurance based on the number of employees you have, the size of your kitchen, and other factors. This cost can range anywhere from $5,500 to $15,000 annually.
Employee Compensation Insurance ($3.5k – $7.5k)
For any employee injured while working, you will need to have worker compensation insurance, so you are protected should they need financial assistance.
Your average costs for this coverage will be around $3,500-$7,500 annually per employee, depending on the number of employees you have.
Ongoing Franchise Cost
As part of the Chili’s franchise, there will be ongoing fees taken from gross sales. These fees include a 1.2% royalty fee, max of 3.9% for national advertising, 3.0% local marketing fee, and 2.7% for technical fees.
These costs can add up quickly and affect your bottom line, especially if you are not monitoring other expenses.
Miscellaneous Expenses ($10k-$35k)
There are miscellaneous expenses that you should expect to come across while operating your Chili’s franchise. This can include toiletries, cleaning supplies, paper products, furniture, and much more.
Your average expenses will be around $10,000-$35,000 annually, but this can vary greatly depending on what you decide to purchase and what needs to be done to your restaurant.
Does a Chili’s Franchise Sound Good?
A franchise comes with a lot of benefits, and Chili’s is no different.
In our example, the average total for all start-up expenses totaled $1,900,000, but this is just an average. Depending on how much you are willing to invest, the location you choose, and equipment, your start-up costs could be even higher.
Be sure to make a detailed budget before investing in any franchise opportunity and check the average costs of opening a Chili’s franchise.
Chili’s is a well-known and loved restaurant and franchise. It offers a competitive advantage and is the perfect choice for many business owners looking to own their own franchise.
There are a lot of costs that come into play, especially when you are opening your first restaurant or franchise.
Consider all of your expenses and ask yourself if opening a Chili’s franchise is the right choice for you.