The Price of a Remodel

Investing in updated look can breathe new life into restaurant

At a time when budgets are tight, investing in a remodel or upgrade may seem like a risky plan. Operators have to wonder if updating the look or equipment in their restaurant will bring in more customers. How big of a remodel is necessary?

When considering a remodel, operators need to ask that question and others before making a decision. “You don’t need to go for broke. Every situation is different,” says Kevin Goldfein, owner of KBG Dining Group, a hospitality management company in California that owns Rosti Tuscan Kitchen. “The important thing is to ask why you want to remodel and what are your goals. What do you want to accomplish?”

After developing an extensive plan, Goldfein remodeled the Encino and Santa Monica locations of Rosti Tuscan Kitchen.

“We increased seating and improved infrastructure and became current with our competition and our brand and our image, but we kept our identity,” Goldfein says. “We wanted people to come in and say, ‘oh, this is brand-new, but it’s still the same Rosti we love. The remodel has been a big benefit to us.”

According to Goldfein, the remodel was a chance to increase sales as well as update Rosti’s brand.

“I bought the company in 2008, because it had great bones in terms of great service, food and reputation. But it had been in business for over

15 years and needed updating,” Goldfein says. “So, remodeling went hand in hand with re-branding — a chance to rejuvenate itself.”

The right remodel can result in increased sales. “Yes, renovation will absolutely lead to increased sales if the design (and designer) is simpatico with the brand and target customer. If you don’t have that synergy between design, brand and target customer, then you won’t be maximizing sales. Not at all,” says Christopher Studach, creative director of King Retail Solutions in Oregon.

According to Studach, for a remodel to stand the test of time it must start with a focused plan.

“If you figure that ‘worn’ is likely a sign that the business has been suffering over time — losing customers — then just the mere fact that the business is investing in the customer’s experience will create a jump in business,” Studach says. “But how successful over time is a direct result of an educated and targeted design process.”

So how much does it cost to put a design plan into motion? It depends on the scope of the plan, the size and location of the restaurant and the needs of the business.

“Remodels vary in scope tremendously. A simple face-lift (no kitchen, furniture, etc.) can be very affordable, while a complete change including

updated equipment, finishes, furnishings and exterior upgrade can cost much more. Of course the size and location will affect that number as well,” Studach says.

Lena Gordon, principal interior designer and owner of D2D Studio, Inc., in Littleton, Colorado, offers these examples of renovations in Denver.

Example 1: A 15-table casual pizzeria, young college demographic, simple standard toppings and no alcohol served: New furniture, paint, flooring, some architectural interest, simple restroom. Cost with design service: $25,000-$50,000.

Example 2: A 15-table medium scale pizzeria, young family demographic, semi-upgraded toppings and wine/beer: New furniture, paint, flooring, more architectural interest, impressive light fixtures, medium restroom. Cost with design service: $45,000-$100,000.

Example 3: A 15-table gourmet pizzeria, hip foodie demographic, upgraded toppings, fancy salads and apps, full bar: New furniture, wall treatments, flooring, lots of interior architectural elements, nice restroom. Cost with design service: $75,000-$200,000.

The remodel of the Valencia location of zpizza focused on the kitchen and the customers, according to Amir Sabetian, vice president of operations for zpizza International in Irvine, California.

“In the case of Valencia we spent about $20,000 total. Almost half was in kitchen equipment that needed repair or replacement. Guest view — we upgraded about $11,000,” Sabetian says. “Complete customer area remodels, which include changing all furniture, lighting, art, interior signage, paint or wall coverings, flooring and casework, can run from $100,00 to $200,000 depending on location and size. This does not include kitchen and business equipment upgrades.”

A budget will help operators determine where to spend and save.

“The bulk of cost is usually flooring, furniture and then electrical. Details, such as flatware, table linens, etc. can break the budget quickly. Splurging on lighting and restrooms is a good bet,” Gordon says. “Operators can save money by using the creative genius of an interior designer to create inexpensive wow moments without necessarily throwing a ton of money at the space. Strategically using used restaurant furniture and equipment, inexpensive art and wall/ceiling treatments, designing unique items with simple materials.”

Operators should make the most of what they already have. “A professional assessment should be done to determine what the challenges are and to prioritize the opportunities,” Studach says. “ ‘Splurge’ is not something we would even recommend — it implies spending more than was necessary to achieve maximum benefits. It’s more about prioritizing to determine, for your particular business, which investments are going to generate the most sustainable ROI.”

Doing homework will result in a better bid. “Be practical about restaurant remodels; it’s not your house — lots of contractors need work these days,” Sabetian says. “Shop around. We saved $1,200 just on the paint quote in Valencia by calling for three quotes. Also, fortunately franchise stores share the same brand elements, furniture, lighting (and) art work, so these items can be purchased with deep quantity discounts. Paint is one of the quickest, cheapest and most dramatic ways to make a change that will be noticed by your customers.”

According to Sabetian, successful updates are in the eye of the beholder.

“The majority of expense should be done where guests can experience the enhancements. Operational equipment in the kitchen is important, but if the guest can’t see it, it won’t affect their view on the enhancement expense.”

Operators need to make design trends work for their brand now and in the future.

According to Gordon, trends lean toward the raw, natural materials mixed with metals, upgraded metallic vinyls, great design in light fixtures and impressive restrooms.

Studach warns against getting caught up in a trend. “Any trendy design element will quickly date itself and negate much of the benefits of the remodel in the first place. Unless, of course, you can afford to update every three to five years. Besides, do you want to be just like everyone else?” he asks.

When it comes to design ideas, the brand determines the look. “For the zpizza brand, minimalism and pure were the driving forces,” Sabetian says. “These were expressed through light pure colors and materials, bamboo, stainless steel, and accents of the brand red. Packaging materials were recycled and recyclable. (We went for) modern clean lines in furniture and lighting.”

Since any remodel, small or large, requires time and money, operators need to do their research before any walls come down or high-price equipment is ordered. To put the right remodel in motion, operators need to know what works best with their current establishment, brand, budget and business goals.

DeAnn Owens is a freelance journalist living in Ohio. She specializes in features and human interest stories.

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