What Is the Profit Margin for a Restaurant With $500K Revenue?
The Short Answer
A typical restaurant with $500K revenue has a net profit margin of 3-9%, yielding $15,000-$45,000 in profit. Full-service restaurants average 3-5% while fast-casual averages 6-9%.
The Detailed Breakdown
Margins benchmarked against National Restaurant Association industry averages for full-service establishments.
| Calculation | Value | Assumptions |
|---|---|---|
| Net Profit (5%) | $25,000 | Average full-service restaurant margin |
| Gross Profit (60%) | $300,000 | After food costs (COGS) of 28-35% |
| Labor Cost | $150,000 | Typically 30% of revenue |
Key Assumptions
- Food cost (COGS) at 30-35% of revenue.
- Labor cost at 28-32% of revenue.
- Overhead (rent, utilities, insurance) at 25-30% of revenue.
Adjust for Your Situation
A $500K restaurant netting 5% ($25K) is performing at industry average; aim for 8%+ through cost control.
Use the Free CalculatorWhat Affects This Result
Food Cost Control
Every 1% reduction in food cost adds $5,000 directly to profit.
Labor Efficiency
Overstaffing is the top margin killer in restaurants.
Concept Type
Fast-casual earns 2-3x the margin of full-service due to lower labor needs.