How To Open a Restaurant in Toronto

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Allie Van DuyneAuthor

Thinking about opening a restaurant in Toronto?

Toronto is a city known for its vibrant culture and diverse culinary scene. With iconic landmarks like the CN Tower and bustling neighbourhoods like Kensington Market, Toronto offers a dynamic backdrop for culinary entrepreneurs. Moreover, its reputation as a melting pot of cultures makes it an ideal location to showcase innovative and fusion cuisines.

Toronto is home to culinary delights such as butter tarts and peameal bacon sandwiches. And for those aspiring restaurateurs looking to add their flavours to the mix, we have good news. The market size of the restaurant industry in Ontario is $146.5 million, making Toronto a prime destination to realise your gastronomic dreams.

We've assembled a comprehensive step-by-step guide to assist you in launching your restaurant in Toronto. Let's delve into it: Here's how to open your Toronto restaurant.

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1. Decide on a Restaurant Idea

Toronto boasts many high-end dining options, making it important to stand out from the competition. With numerous eateries dotting the cityscape, captivating Toronto's diners requires a unique concept. Identifying a niche that resonates with Toronto’s locals and tourists alike is essential for attracting patrons to your establishment.

Begin by conceptualising the type of cuisine you want to offer. Consider the ingredients that define your culinary identity, the signature dishes you aspire to create, and beverages that complement your menu. You can summarise your culinary vision by jotting down your restaurant's mission and core values, articulating what distinguishes your brand within Toronto's culinary landscape.

Start to think about your restaurant's branding elements. Can you picture a specific logo on your dream shopfront on Yonge Street? Develop the aesthetic that embodies your brand, laying the foundation to transform your vision into reality.

Before fully committing to your restaurant, you could run a trial pop-up or food truck. This will help you gain valuable insights, refine your concept, and help build rapport with Toronto's food enthusiasts. 

2.  Create a Restaurant Business Plan

Crafting a comprehensive business plan will help you secure financial support. Outline your concept and detail the operational framework and financial projections that underpin your business strategy. Given Toronto's competitive dining scene, your business plan should demonstrate innovation and market differentiation to captivate potential investors.

  • Key components of an effective restaurant business plan include:
  • Executive summary, including your restaurant name
  • Company overview, including your business model
  • Industry analysis (dive deep into Toronto’s food scene, potential competitors, and your target market)
  • Marketing plan (How you’ll grab the attention of Toronto’s patrons)
  • Business model and service model (Are you a quick service restaurant? Fine dining? Fast food? Dining room sit down? Decide that here)
  • Operations plan (staffing, customer service policies and procedures, restaurant point of sale, payroll)
  • Financial analysis and business model (investment plan, projected profit and loss statement, break-even analysis, expected cash flow)

Getting a second set of eyes on your business plan is always a good idea. You could enlist the guidance of trusted restaurateur in Toronto to review your business plan, leveraging their expertise to refine your strategies and improve your chances of success.

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Restaurant Profit and Loss Statement Template

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3. Secure Restaurant Capital

Launching a restaurant in Toronto entails substantial financial investment. Whether pursuing independent ownership, franchising opportunities, or partnership ventures, getting adequate capital is an essential milestone on your culinary journey. 

Fortunately, various financing options are available to support restaurant ventures, including:

  • Equipment and Technology Loans. Negotiate with your bank or provider to procure loans for kitchen equipment and restaurant technology, which can be one of the most expensive costs. Many point of sale providers, like Toast, offer 0% financing to offset the initial cost of the technology.
  • Working Capital Loans. Working capital loans help cover operating costs while your restaurant has more expenses than income. Ideally, budget six to twelve months of operating costs until you reach a break-even point.
  • Lines of Credit. If you’re approved for a business line of credit, you’ll get a maximum credit amount but will only have to pay what you use. Like a credit card, the line of credit constantly revolves. As you pay your balance, you’ll have more credit to draw on for future expenses.

Whether you’re looking to open a new location, invest in shiny new equipment (coffee machine upgrade or walk-in, anyone?), or managing cash flow over the next few months, you will need reliable funding to make your dreams a reality.

4. Choose a Restaurant Location

Selecting the perfect location for your restaurant in Toronto is vital for bringing in the right crowds and fostering long-term success. Conduct thorough market research to evaluate demographics and the competitive landscape, and to find neighbourhood characteristics that align with your brand identity.

Whether leasing commercial space, purchasing property, or embracing alternative models like ghost kitchens, ensure your chosen location resonates with your target audience.

Consider factors such as foot traffic, accessibility, and zoning regulations when assessing potential sites for your restaurant. Whether situated in Toronto's vibrant downtown core or emerging culinary enclaves, your restaurant's location should embody your vision.

5. Apply for Restaurant Licences and Permits

Navigating the regulatory landscape is essential when operating a restaurant in Toronto. Key licenses and permits necessary for restaurant operations in Toronto include:

  • Food Premises License: Issued by Toronto Public Health, ensuring compliance with health and safety regulations for food handling, sanitation, and hygiene.
  • Liquor License: Required to serve alcoholic beverages on the premises, obtained from the Alcohol and Gaming Commission of Ontario (AGCO).
  • Business License: Mandatory for all businesses operating in Toronto, ensuring compliance with local zoning regulations, taxation requirements, and business standards.
  • Outdoor Patio Permit: Necessary if you plan to have outdoor seating, regulating seating arrangements, safety measures, and compliance with local bylaws.
  • Signage Permit: Required for displaying signage such as storefront signs or outdoor banners, ensuring compliance with zoning regulations and aesthetic standards.
  • Entertainment License (if applicable): Needed for hosting live music performances or other forms of entertainment, obtained from the City of Toronto.

Licences can take time and money to acquire. So, if you're serious about opening your restaurant, start the process now!

6. Develop A Memorable Restaurant Menu and Beverage Program

Collaborate with your culinary team and beverage experts to craft a distinctive menu and beverage program that resonates with Toronto's diverse palate. 

For example, if you’re selling wood-fired pizzas, how can you offer a point of difference? What special touches can you add? What toppings will you use? Is there any way you can promote your brand through your menu? How do your prices compare with other restaurants in the area?

Next, you'll need to establish your prices. This is where cost of goods sold, food cost, sales forecasting, inventory, profit margins, and other metrics come into the picture. Remember, good inventory management is essential to ensure you’re following Toronto’s food regulations

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Restaurant Menu Templates

Use these menu templates as a starting point for your menu design or to give your menus a refresh.

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7. Hire Top-Notch Restaurant Staff

Recruit a talented team of hospitality professionals who embody your restaurant's ethos and commitment to excellence. From front-of-house to the kitchen, prioritise hiring individuals with passion, expertise, and a customer-centric mindset.

Leverage multiple recruitment channels, including referrals, job boards, and industry networks, to attract top-tier talent in Toronto's competitive labour market. You can empower your staff and foster professional growth by cultivating a positive work culture and providing ongoing training and development opportunities.

Invest in employee retention strategies and incentives to nurture a loyal and dedicated team, ensuring continuity and consistency for your loyal diners.

8. Invest in Equipment and Restaurant Technology

Restaurant guests expect a side order of technology with their dining experience, and according to Toast’s Restaurant Technology Report, 95% of restaurateurs agree that technology improves business efficiency. 

Remember, restaurant guests don't always want to dine in. So, invest in restaurant equipment and tech that facilitates off-premise dining that’s as good as your in-house experience. To keep up with the competition in Toronto, consider investing in the following:

  • A cloud-based restaurant point of sale system
  • Kitchen display screens
  • An online ordering system for restaurants
  • Restaurant reporting and analytics
  • Restaurant inventory management software
  • Restaurant accounting software
  • Simple scheduling and team communication
  • A restaurant payroll solution
  • A restaurant loyalty or rewards solution
  • Contactless payment options and order-and-pay at the table technology that makes guests feel comfortable

By integrating cutting-edge technology and best practices, you can position your restaurant for sustained success and gain a competitive advantage in Toronto's thriving restaurant scene.

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Restaurant POS Comparison Tool

A free, customizable Restaurant POS Comparison Tool to research and compare point of sale systems in one Excel spreadsheet or editable PDF.

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9. Create a Restaurant Marketing Plan

Getting noticed in Toronto is where your marketing strategy comes into play. You should leverage digital marketing channels, social media platforms, and local partnerships to amplify your restaurant's visibility and attract patrons. 

It’s a good idea to plan marketing activities on a daily and weekly basis across your platforms, including social media, radio, print advertising, and more. 

There’s no one-size-fits-all solution when it comes to marketing a restaurant. Your strategy should focus on the channels where you have the best engagement and that your target customer uses. 

First thing on your restaurant marketing plan? Promotion of your restaurant's debut. 

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Restaurant Marketing Plan

Create a marketing plan that'll drive repeat business with this customizable marketing playbook template and interactive calendar.

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10. Host a Soft-Opening and Grand-Opening

We’re almost there! To celebrate the launch of Toronto’s newest restaurant, you should throw soft and grand openings.

Before officially launching your restaurant to the public, the soft opening serves as your dress rehearsal. It's an intimate affair where you invite your closest friends, family, and maybe even a friendly neighbor or two to be your taste testers for the night. They'll forgive any hiccups because, let's face it, they're all rooting for your success (hopefully).

This isn't the type of event you plaster all over social media; it's more of a cosy gathering for your inner circle. It's your chance to iron out any wrinkles with your team in a relaxed atmosphere. Trust us, there will be wrinkles, but that's all part of the learning curve!

Now, onto the big day – the grand opening. This is when you fling your doors wide open and invite all of Toronto to come and experience what you've been cooking up. Sure, there may still be a few bumps along the way, but that's just par for the course in the restaurant world.

Don't forget to capture these milestone moments with a few snapshots for social media. And don't overlook the significance of that first dollar bill – frame it up and display it proudly for all to see. It's a symbol of your hard work and dedication paying off.

And if, down the line, you decide to expand your restaurant business or open multiple locations, you know where to find us

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DISCLAIMER: This information is provided for general informational purposes only, and publication does not constitute an endorsement. Toast does not warrant the accuracy or completeness of any information, text, graphics, links, or other items contained within this content. Toast does not guarantee you will achieve any specific results if you follow any advice herein. It may be advisable for you to consult with a professional such as a lawyer, accountant, or business advisor for advice specific to your situation.