Is a Restaurant Profitable? (2026 Calculator by City)
Restaurant profitability estimates for 11 major US cities — interactive calculator shows monthly profit, net margin, and break-even timeline adjusted for local cost of living.
The average restaurant generates $65,000/month nationally, with a net margin of approximately 14% after cost of goods, labor, and overhead. Profitability varies significantly by city — select a market below for a city-adjusted estimate with an interactive calculator.
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Restaurant Profitability: Key Questions
How much does a restaurant make per year?
The median independent full-service restaurant generates $400,000–$800,000 in annual revenue. After food cost (31%), labor (33%), and overhead (22%), net margins average 3–9%. High-volume restaurants with strong alcohol sales and efficient labor scheduling can exceed 15% net margins.
Is a restaurant profitable?
Profitable restaurants exist, but margins are thin. The keys are prime cost control (food + labor ≤ 65% of sales), strong alcohol sales (30–40% margins vs. 10–15% on food), and location. Restaurants that break even within 18 months typically have experienced operators, second-generation space, and high table turns.
What is the average profit margin for a restaurant?
Average net profit margins for independent full-service restaurants run 3–9%. Fine dining can reach 10–15% with high check averages. Fast casual and QSR concepts target 6–12%. The 'restaurant rule of thirds' — 1/3 food cost, 1/3 labor, 1/3 everything else — leaves 5–10% for profit if executed perfectly.
How many covers does a restaurant need per day to be profitable?
A restaurant with $25,000/month in fixed costs and a $28 average check needs roughly 900 covers/month (43/day) just to cover fixed costs. At $65,000/month revenue (100 covers/day), food and labor consume 64% — leaving 14% ($9,100) for rent, utilities, and profit. Optimize for table turns during peak hours.
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