What is a good restaurant profit margin?

Restaurant net margins are typically 3–9%. Gross margins (before operating costs) are usually 60–70%. Fine dining and bars can achieve higher net margins.

What is gross profit vs net profit?

Gross profit is revenue minus food cost. Net profit is revenue minus all costs including rent, labor, utilities, and overhead.

Why is my net margin so low?

Restaurants have thin margins by nature. Labor (typically 30–35%) and rent (5–10%) are the largest controllable costs to review.

How often should I run this calculation?

Monthly. Comparing month-over-month helps you catch margin compression early, especially when food costs spike.

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Restaurant Profit Margin Calculator

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