What is the average profit margin for a restaurant?

The average net profit margin for a restaurant is 3–9%. Full-service restaurants average 3–5%, fast casual averages 6–9%, and bars and nightclubs can reach 10–15%. Many restaurants fail because they don't track all costs accurately.

What are the main costs in a restaurant?

The prime cost (food + labor) typically accounts for 55–65% of revenue. Food cost: 28–35%. Labor cost: 25–35%. Overhead (rent, utilities, insurance): 5–15%. Net profit is what remains after all costs.

How can I improve my restaurant profit margin?

Key levers: (1) Reduce food cost % by repricing dishes or renegotiating with suppliers. (2) Reduce labor cost % through scheduling optimization. (3) Increase check average through menu engineering. Even a 2% improvement in food cost goes directly to profit.

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Last reviewed: July 28, 2026

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Improve margins by repricing your menu

MenuPricer shows you the right price for every dish — with AI-calculated food cost, margin, and 3 pricing tiers. A 2% food cost improvement on a $50k/month restaurant adds $1,000/month to profit.

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Restaurant Profit CalculatorNet Profit & Margin Estimator

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Frequently Asked Questions

Improve margins by repricing your menu

Restaurant Profit Calculator
Net Profit & Margin Estimator