How Much Does It Cost to Start a Restaurant in Massachusetts?
Massachusetts has a cost index of 1.3x the national average for restaurant businesses. Here is a complete line-by-line cost breakdown based on local data.
Line-Item Cost Breakdown
| Category | Low | Mid | High | Notes |
|---|---|---|---|---|
| LLC filing | $650 | $1,950 | $3,900 | LLC filing fee in Massachusetts: $500. LLC fee varies by state ($35-$500). EIN is free from IRS. Legal consultation for lease review and operating agreement adds $500-$2,000. |
| Food service license | $2,600 | $13,000 | $65,000 | Liquor license alone can range from $300 to $14,000+. Health department permits $100-$1,000. Fire inspection $100-$500. Building/occupancy permits $500-$5,000. Signage permits $50-$300. |
| Commercial kitchen equipment | $32,500 | $97,500 | $260,000 | Used equipment at low end can save 40-60%. Major items: commercial oven ($3,000-$20,000), walk-in cooler ($5,000-$15,000), fryers ($1,500-$5,000), dishwasher ($3,000-$10,000), POS system ($1,500-$5,000). |
| Food inventory | $6,500 | $19,500 | $45,500 | First food order typically 2-3x normal weekly order. Bar inventory adds $5,000-$15,000. Paper goods, cleaning supplies, and uniforms add $2,000-$5,000. |
| Leasehold improvements | $26,000 | $130,000 | $455,000 | Commercial kitchen ventilation hood alone costs $5,000-$20,000. Plumbing for grease trap $2,000-$5,000. Build-out costs $50-$200/sqft depending on condition of space. |
| Tables | $6,500 | $32,500 | $104,000 | Restaurant chairs $50-$300 each, tables $100-$500 each, booths $500-$2,000 each. |
| General liability | $3,900 | $10,400 | $19,500 | Annual cost. General liability $1,500-$5,000/yr, workers comp varies by state and payroll, property insurance $1,000-$3,000/yr, liquor liability $500-$2,000/yr. |
| Exterior signage | $2,600 | $10,400 | $32,500 | Exterior signage $2,000-$10,000. Website $500-$3,000. Menu design/printing $500-$2,000. Grand opening event $1,000-$5,000. |
| POS system | $2,600 | $6,500 | $19,500 | POS hardware $1,500-$5,000, monthly software $100-$300. Security system $1,000-$5,000. |
| 3 months operating expenses | $39,000 | $97,500 | $195,000 | Critical buffer. Monthly operating costs for a mid-sized restaurant: rent $3,000-$10,000, payroll $8,000-$25,000, food costs $5,000-$15,000, utilities $1,500-$3,000. |
| Estimated Total | $123,500 | $357,500 | $975,000 | Adjusted for Massachusetts's cost index (1.3x national avg) |
LLC Registration in Massachusetts
To form an LLC in Massachusetts, you file Articles of Organization (or Certificate of Formation) with the Secretary of State. The base filing fee is $500.
Note: Highest base filing fee in the nation at $500.
File online at: Massachusetts Secretary of State
An EIN (Employer Identification Number) is free from the IRS and required for any LLC with employees, multiple members, or that wants a business bank account.
Permits & Licenses in Massachusetts
Restaurant businesses in Massachusetts typically need multiple permits and licenses. Estimated total permit costs are around $8,000.
Liquor license alone can range from $300 to $14,000+. Health department permits $100-$1,000. Fire inspection $100-$500. Building/occupancy permits $500-$5,000. Signage permits $50-$300.
Always check with your local city and county offices for specific requirements. Requirements vary significantly between jurisdictions within Massachusetts.
Insurance Costs in Massachusetts
A restaurant in Massachusetts should budget approximately $8,000/year for insurance coverage.
Annual cost. General liability $1,500-$5,000/yr, workers comp varies by state and payroll, property insurance $1,000-$3,000/yr, liquor liability $500-$2,000/yr.
| Coverage Type | Details |
|---|---|
| General Liability | Covers third-party bodily injury and property damage claims |
| Workers Compensation | Massachusetts rate: $1.15 per $100 payroll (national avg: $1.03) |
| Property/Equipment | Covers business property, equipment, and inventory |
| Total Annual Estimate | $8,000 |
Equipment & Setup
Used equipment at low end can save 40-60%. Major items: commercial oven ($3,000-$20,000), walk-in cooler ($5,000-$15,000), fryers ($1,500-$5,000), dishwasher ($3,000-$10,000), POS system ($1,500-$5,000).
| Item | Budget | Mid-Range | Premium |
|---|---|---|---|
| Commercial kitchen equipment | $32,500 | $97,500 | $260,000 |
| Food inventory | $6,500 | $19,500 | $45,500 |
| Leasehold improvements | $26,000 | $130,000 | $455,000 |
| Tables | $6,500 | $32,500 | $104,000 |
Working Capital
Plan for at least 3 months of operating expenses as working capital. For a mid-range restaurant in Massachusetts, that means approximately $97,500 ($32,500/month).
Critical buffer. Monthly operating costs for a mid-sized restaurant: rent $3,000-$10,000, payroll $8,000-$25,000, food costs $5,000-$15,000, utilities $1,500-$3,000.
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Restaurant Costs in Neighboring States
| State | LLC Fee | Permits | Insurance/yr | Cost Index | |
|---|---|---|---|---|---|
| Connecticut | $120 | $5,500 | $7,500 | 1.12x | Details → |
| New Hampshire | $100 | $3,500 | $6,000 | 0.95x | Details → |
| New York | $200 | $10,000 | $9,000 | 1.38x | Details → |
| Rhode Island | $150 | $4,000 | $6,200 | 0.95x | Details → |
| Vermont | $155 | $3,500 | $6,000 | 0.95x | Details → |