Most restaurants keep roughly 3 to 15% of sales as net profit. It varies by country and format: full-service and casual dining is often lower, about 3 to 10%, while quick service and well-run cloud kitchens can reach 10 to 15%. Fine dining varies widely. Food, staff and rent together usually take 60 to 70% of sales.
Net profit margin by format
| Format | Net profit | Gross margin |
|---|---|---|
| Full service and casual dining | 3 to 10% | 67 to 72% |
| Quick service | Can reach 10 to 15% | 70 to 75% |
| Cloud kitchen, well run | Can reach 10 to 15% | 68 to 72% |
| Fine dining | Varies widely | 65 to 70% |
Rough guides only. They vary by country and format. Gross margin is sales minus food cost; net profit is what is left after every cost.
Work out your net profit margin
A sample P & L Account for a casual-dining outlet
One month, with net sales of 1,000,000. All amounts are in your own currency.
| Line | Amount | Share of sales |
|---|---|---|
| Net sales | 1,000,000 | 100% |
| Food and drink cost | 320,000 | 32% |
| Staff cost | 220,000 | 22% |
| Rent | 120,000 | 12% |
| Online delivery platform commissions and marketing | 80,000 | 8% |
| Electricity, gas and water | 60,000 | 6% |
| Maintenance, licences, consumables and other | 110,000 | 11% |
| Net profit | 90,000 | 9% |
Healthy cost ranges
| Cost | Healthy | Warning |
|---|---|---|
| Food cost | 28 to 35% | Above 38% |
| Staff cost | 20 to 30% | Above 35% |
| Rent | 8 to 15% | Above 18% |
Rough guides only. They vary by country and format.
How to work out your own margin
- Start from net sales, not gross sales.
- Count food cost from stock used, not from purchases.
- Include salaries, rent, delivery commissions, utilities and every small monthly cost.
- Do it outlet by outlet: a brand average hides the outlet that is losing money.
How to raise your margin
The biggest swings usually come from food cost and buying, not from rent. See how to increase restaurant profit, even at the same sales.
Try it on your own numbers: Break-even calculator, free and with no sign-up.
Your margin, outlet by outlet, every morning
Peasily builds the P & L Account of every outlet from its own bills, stock and costs, and shows net profit first, every morning, with food cost and labour cost beside it.
The P & L Account comes with both Peasily packages. Screens from the Peasily demo brand.
Questions
What is the average profit margin of a restaurant?
Most restaurants keep roughly 3 to 15% of sales as net profit. Full-service and casual dining is often about 3 to 10%, while quick service and well-run cloud kitchens can reach 10 to 15%. Fine dining varies widely. These are rough guides that vary by country and format.
What is the difference between gross margin and net profit?
Gross margin is sales minus food cost. Net profit is what remains after every cost: food, staff, rent, commissions, utilities and the rest.
Which cost should I fix first?
Usually food cost and buying prices. They move every day, while rent and salaries are fixed for months.
See your own numbers in Peasily
We'll walk you through it with your real menu and outlets.