Dealing with Change Orders

The Reality of Construction

In the world of restaurant construction, few things are as universally disliked as change orders. After months of planning, budgeting, and drawing, it can be frustrating and costly to face modifications once construction is already underway. Yet, despite best efforts to plan thoroughly, change orders are an inevitable part of the construction process. For restaurant developers, understanding how to manage these changes effectively is critical to maintaining both schedule and budget integrity.

The Nature of Change Orders

A change order is a formal amendment to an existing construction contract. It modifies the original terms by altering the scope of work, design details, schedule, or pricing. While no one enjoys dealing with change orders, they are often necessary and unavoidable. Changes can range from beneficial upgrades to essential corrections or unforeseen conditions. In many cases, they represent the realities of construction rather than project mismanagement.

Common Causes of Change Orders

Field Conditions
Renovation projects frequently uncover hidden conditions once demolition begins. These might include outdated infrastructure, undocumented utilities, or structural anomalies. Even new builds are not immune; unexpected underground elements such as old foundations or relocated utility lines can require on-the-fly adjustments.

Owner-Driven Changes
Restaurant operators often rethink aspects of the project after construction begins. Whether it’s selecting a better appliance, modifying the layout for improved workflow, or responding to updated market conditions, owner-driven changes are common. Adding equipment, reconfiguring bars, or altering finishes can all result in change orders.

Material Availability
Specifications may call for particular materials or finishes that become unavailable due to supply chain issues. Sourcing suitable alternatives can lead to increased costs or require design modifications, both of which can trigger formal change orders.

Code Compliance Revisions
Even after securing permits and receiving design approvals, field inspectors may require revisions based on real-time observations. Examples include repositioning exit signage, updating electrical systems, or installing additional hand sinks. These changes, while often small, can disrupt timelines and budgets.

Design Omissions or Coordination Errors
The complexity of restaurant construction leaves room for oversight. Common issues include missing floor sinks, overlooked electrical outlets for small appliances, or ambiguous millwork assignments. Items marked as “owner provided” — such as AV systems, coffee machines, or dishwashers — often require contractor coordination that is not reflected in the original budget.

Managing the Impact

How changes are identified, documented, and resolved significantly affects both cost and project schedule. Some changes clearly fall outside the original scope and represent legitimate additions. The challenge lies in assigning responsibility — whether to the owner, contractor, or design team — for costs and execution.

To mitigate the financial impact of change orders, many budgets include a contingency fund. While some owners are skeptical of such allowances, viewing them as an excuse to cover sloppy work, contingencies serve as a buffer against unforeseen conditions. A disciplined approach — where owners review each change and determine its origin — ensures accountability. If a change results from an owner’s request, they bear the cost. If it stems from a contractor error or design oversight, the responsible party should absorb the expense.

Best Practices for Minimizing Change Orders

While change orders cannot be eliminated entirely, they can be minimized through proactive measures, including:

Thorough Review of Construction Documents: Involving all stakeholders — including the owner, architect, contractor, and consultants — helps identify potential gaps or conflicts before construction begins.

Detailed, Line-Item Budgets: These clarify who is responsible for each element of the project and help ensure nothing is overlooked.

Clear Owner-Supplied Item Lists: An itemized inventory of owner-provided and owner-installed equipment prevents coordination issues during construction.

Strong Project Management: An agile and responsive project management team can quickly address field issues, navigate delivery delays, and coordinate trade work to avoid disruption.

Setting Expectations and Ensuring Accountability

Restaurant construction is inherently complex, with many moving parts. Weather delays, damaged goods, and shifting supply timelines are just a few of the unpredictable variables. Owners who insist on changes mid-project must be prepared for the associated schedule impacts and costs. Meanwhile, project managers and general contractors must take responsibility for resolving construction conflicts without compromising design intent or passing costs unfairly onto the owner.

Ultimately, not all change orders are problematic — some improve the final product. However, uncoordinated or poorly managed changes can lead to delays, cost overruns, and strained relationships among stakeholders. For restaurant developers, the key lies in establishing clear processes, maintaining transparency, and fostering a collaborative project environment.

By acknowledging that change is part of the process — and preparing accordingly — restaurant developers can maintain control over their projects and deliver high-performing spaces on time and within budget.