How Do Pop-Up Restaurants Make Money?
September 01, 2020
Pop-up restaurants could be the new darlings of the food industry. Their innovative menus and often unorthodox locations make them a must-try for foodies. This trendy take on dining out has some chefs and restaurant owners setting their sights on pop-ups, instead of brick-and-mortars, as a practical business model.
Want to know if pop-ups turn a profit? Before taking the plunge, there are many factors to consider. Our restaurant supply company shares details you should know.
What Is A Pop-Up Restaurant?
In the simplest of terms, a pop-up is a temporary restaurant that crops up in unexpected places. However, ask anybody that’s ever been to one and they will tell you these modern supper clubs are much more than that.
They are unique culinary events that offer dazzling menus and an adventurous atmosphere. The locations are constantly changing; seating is typically intimate and limited.
How Does a Pop-Up Restaurant Work?
Chefs and restaurant owners open pop-ups for a variety of reasons, from trying out new cuisines, drumming up money for fundraisers, and even as a pitch for investors. The dynamics of how the concept works varies from place to place. You can find them in people’s homes, in the mountains, and even within already established restaurants. Menus run the gamut from elevated prix fixe, to nostalgic comfort foods, and global cuisine. While each has its own unique personality and epicurean offerings, the central concept is always the same:
- Pop-ups are temporary by nature, but some can last an entire weekend or longer.
- The overall experience is centered around culinary delights where chefs can break away from traditional menu concepts.
- They are managed like professional restaurants, so food safety and permits are still needed.
Do Pop-Up Restaurants Make Money?
The answer to this question is complicated. Pop-up restaurants do have the ability to be lucrative for established restaurateurs and newcomers alike. However, their temporary nature also presents unique challenges.
To create a customer following you must implement creative marketing tactics, switch up your menus regularly, and plan your concept fully before opening your doors. With some savvy planning and a little hard work, you can build a successful brand. Here are just some of the factors that help pop-ups turn a profit:
Low start-up costs. Pop-ups require less money upfront than a brick-and-mortar restaurant. A full-fledged restaurant sees high opening costs, especially within their first year. Most of their initial capital goes to operational needs like building costs, industrial kitchen equipment, POS systems, hiring and training a full staff, and decor. Pop-ups only rely on the necessities, which allows owners and chefs to focus on the food. In short, they can work more easily within a tight operational budget and increase profit margins. Choosing the right location to rent for your pop-up will also be a factor in overall cost.
Reduced labor costs. Labor costs can make or break a restaurant. For most establishments labor is a major expense, sometimes only second to rent costs. However, pop-ups have few (if any) employees on payroll. Because they are usually smaller in scope, they do not have a large staff pool or an unmanageable payroll burden.
Higher price points. The menus tend to be experimental and unique, which appeals to the foodie crowd. The air of impermanence around temporary restaurants also creates a sense of urgency that piques customer interest. The trendiness coupled with cutting edge menu offerings allows for a higher price tag. Owners can further cash in on food profits by offering prix fixe meals and partnering with their restaurant supply warehouse to help keep food costs in check.
Partner With Our Wholesale Restaurant Supply Company for Your Pop-Up
Are you looking to start your own pop-up restaurant? US Foods CHEF'STORE is your go-to for wholesale restaurant food supplies. We offer exceptional produce, high-quality meat and seafood, and kitchen essentials at competitive prices. You can take advantage of our easy online shopping and track all your orders. What’s more? You can also get bulk groceries delivered via our third-party partners.