Should You Buy A Restaurant Or Lease A New Space?

Should You Buy a Restaurant or Lease a New Space? | Buying vs Leasing a Restaurant

Opening a restaurant starts with one of the biggest decisions operators face: should you buy an existing restaurant or lease a new space and build it out? This question impacts startup costs, timeline, risk, and long-term success. Each option has distinct advantages and trade-offs.

This SEO-focused guide breaks down buying a restaurant vs leasing a new space so you can choose the best path based on your concept, budget, and timeline.

Option 1: Buying an Existing Restaurant (Asset Sale or Turnkey Restaurant)

Buying an existing restaurant typically means purchasing the assets (and sometimes the business) of an operating or recently closed restaurant. This often includes kitchen equipment, furniture, fixtures, improvements, and occasionally brand goodwill.

Pros of Buying a Restaurant

1. Faster Time to Open Most infrastructure is already in place—hoods, grease traps, plumbing, electrical, and layout—allowing you to open in weeks instead of months.

2. Lower Build-Out Costs Second-generation restaurant spaces can save hundreds of thousands of dollars compared to a full build-out.

3. Existing Permits & Approvals Health department approvals and prior restaurant use can significantly reduce permitting risk.

4. Proven Location If the space previously operated successfully, you gain insight into foot traffic, parking, and neighborhood demand.

Cons of Buying a Restaurant

1. Inherited Problems Outdated equipment, worn infrastructure, or poor prior reputation can follow the location.

2. Limited Design Flexibility You may need to adapt your concept to the existing layout rather than designing your ideal space.

3. Landlord Approval Still Required Asset sales, assignments, or new leases almost always require landlord consent.

4. Overpaying for Assets Not all FF&E holds real value—buyers should be careful not to pay for obsolete or failing equipment.

Option 2: Leasing a New Restaurant Space

Leasing a new or non-restaurant space gives you a blank canvas—but also comes with higher upfront risk and cost.

Pros of Leasing a New Space

1. Full Creative Control You can design the layout, kitchen flow, and brand experience exactly how you want.

2. New Infrastructure Brand-new equipment and systems reduce maintenance issues early on.

3. Stronger Long-Term Positioning A well-designed space tailored to your concept can support long-term growth and scalability.

4. Potential Tenant Improvement (TI) Allowance Some landlords offer TI dollars to offset construction costs.

Cons of Leasing a New Space

1. High Upfront Costs Build-outs can range from $300–$800+ per square foot depending on complexity and location.

2. Longer Timeline Permitting, construction, and inspections can take 6–12 months or more.

3. Higher Risk Unexpected construction costs, delays, or permitting issues can derail budgets.

4. No Operating History You’re betting on the location without real performance data.

Key Questions to Ask Before Deciding

How quickly do I need to open?

What is my total all-in budget (including contingency)?

Do I need a custom kitchen or can I adapt an existing one?

Am I comfortable managing construction risk?

Does the location already have restaurant approvals?

Which Option Is Right for You?

Buy an existing restaurant if:

Speed to market matters

Capital is limited

You’re flexible on layout

The space already fits your concept

Lease a new space if:

Brand and design are critical

You have sufficient capital and time

You want long-term control

You’re building a flagship or scalable concept

Final Thoughts: Buying a Restaurant vs Leasing a New Space

There’s no universal right answer—only the right decision for your restaurant. Many successful operators start with second-generation spaces to reduce risk, then graduate to custom-built locations once the concept is proven.

Platforms like Tablelot help restaurant operators compare both options side by side—whether that’s restaurant asset sales, subleases, or vacant restaurant-ready spaces—so you can make an informed decision before committing.

Thinking about buying a restaurant or leasing a new space? Explore real opportunities and compare options on Tablelot.