How profitable are restaurants??

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avis
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2006/07/25 17:58:14 (permalink)

How profitable are restaurants??

I came across an article today that mentioned that restaurants typically earning about 5% in profits meaning they generate $5 for every $100 in sales. Is this true - I thought that they make much more than that?? Does anyone know if the larger restaurants like Chevys or El Toritors make a higher profit??
#1

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    rjb
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    RE: How profitable are restaurants?? 2006/07/25 18:11:15 (permalink)
    The major chaints (McDonalds, Wendy's Steak & Shake, Yum Brands, Applebees, others) are publicly traded and disclose their financial picture in detail every quarter. Availble at www.sec.gov
    #2
    lleechef
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    RE: How profitable are restaurants?? 2006/07/25 19:01:18 (permalink)
    Your restaurant can make as much money as you want. In a 90-seat restaurant we would rake in $11,000 in sales every day. The wait staff made good money, I, as the chef, made a fabulous salary, my staff was well paid. Keep your food cost to about 30% work long hours and cut your labor cost. Have bartenders you can trust. Serve excellent food. DO A MONTHLY INVENTORY! We were just talking about this the other day......how do you know where you stand financially if you don't weigh every piece of meat in the walk-in, every hunk of cheese, count all the produce, go into the freezer and count, go behind the bar and count all the little cans of pineapple juice, the tomato juice, the orange juice, the limes and lemons and oranges, etc. count the bread and pastries, the Tabascos and the L&Ps and the A-1s and all the ketchups. It's a ROYAL pain BUT it HAS to be done.
    #3
    Sundancer7
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    RE: How profitable are restaurants?? 2006/07/25 19:11:38 (permalink)
    I am sure glad there are people in the restaurant industry that love it. To me it is a hard job with long hours and margins can be very thing. No wonder so many go under. I guess it sounds romatic to some but to me it is long hours, hard work with very little return.

    Some do very well and most do not.

    Paul E. Smith
    Knoxville, TN
    #4
    pdxyyz
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    RE: How profitable are restaurants?? 2006/07/25 19:50:39 (permalink)
    quote:
    Originally posted by rjb

    The major chaints (McDonalds, Wendy's Steak & Shake, Yum Brands, Applebees, others) are publicly traded and disclose their financial picture in detail every quarter. Availble at www.sec.gov


    But alot of these are franchises so while the parent company is making money off franchise fees etc the individual locations may or may not be making the same level of earnings.

    And the individual franchises are privately owned so don't have to report their earnings to the public.
    #5
    prisonchef
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    RE: How profitable are restaurants?? 2006/07/25 22:07:32 (permalink)
    old joke was as follows;
    how do you make a small fortune???
    take a big fortune and invest it in a restaurant.
    hope i didn't bust any food network tv bubbles there.
    jack
    #6
    UncleVic
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    RE: How profitable are restaurants?? 2006/07/26 00:47:39 (permalink)
    quote:
    Originally posted by Sundancer7

    I am sure glad there are people in the restaurant industry that love it. To me it is a hard job with long hours and margins can be very thing. No wonder so many go under. I guess it sounds romatic to some but to me it is long hours, hard work with very little return.

    Some do very well and most do not.

    Paul E. Smith
    Knoxville, TN

    Bless these folk with a dream and taste... So sad to hear about the failure rates..

    #7
    bassrocker4u2
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    RE: How profitable are restaurants?? 2006/07/26 07:13:44 (permalink)
    i have worked many different styles and sizes of restaurants. and the profit percentage changes alot form one to another. but 10 percent of three mill, aint too bad..
    the million plus places tend to profit anywhere from 0-22 percent, depending. the under mill class, will take home closer to 35% if all runs well.
    our little mom and pop, profits 50-55 percent.
    #8
    koloa
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    RE: How profitable are restaurants?? 2006/07/26 09:07:25 (permalink)
    i worked for my friends little eatery at the local flea market. his food costs were so low that on the average day (open only on friday, saturday, sunday) AFTER expenses were paid, he still made around 800-1000 bucks profit. he sold really good kebabs, fried rice, egg rolls, snapple, and some other filipino/spanish dishes. the dishes were simple and made up of cheap ingredients (rice, chicken, potatoes, green peppers, vinnegar, etc...)
    #9
    angielynnscott
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    RE: How profitable are restaurants?? 2006/07/26 15:46:59 (permalink)
    Jack
    I don't know if you know it, but you sure are quite amusing. I like reading your responses to information that is requested. You are informative and funny at the same time. Please keep on doing what you are doing.
    quote:
    Originally posted by prisonchef

    old joke was as follows;
    how do you make a small fortune???
    take a big fortune and invest it in a restaurant.
    hope i didn't bust any food network tv bubbles there.
    jack
    #10
    newmans
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    RE: How profitable are restaurants?? 2006/08/04 10:10:25 (permalink)
    Perfect, the best joke of the season. I am project manager of fine dining restaurant in Russia, which I plan to open in spring. Owner going to invest more than 6.000.000$ and she always ask me when I plan to return her funds. Now I have a perfect answer. Keep on … pls
    quote:
    Originally posted by prisonchef

    old joke was as follows;
    how do you make a small fortune???
    take a big fortune and invest it in a restaurant.
    hope i didn't bust any food network tv bubbles there.
    jack
    #11
    sizz
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    RE: How profitable are restaurants?? 2006/08/04 11:12:46 (permalink)
    quote:
    newmans Posted - 08/04/2006 : 10:10:25
    --------------------------------------------------------------------------------
    Perfect, the best joke of the season

    #12
    chicagostyledog
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    RE: How profitable are restaurants?? 2006/08/04 11:33:49 (permalink)
    quote:
    Originally posted by fpczyz

    quote:
    newmans Posted - 08/04/2006 : 10:10:25
    --------------------------------------------------------------------------------
    Perfect, the best joke of the season

    [img]


    HELLO JERRY
    #13
    UncleVic
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    RE: How profitable are restaurants?? 2006/08/04 15:10:16 (permalink)

    OH YA
    #14
    newmans
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    RE: How profitable are restaurants?? 2006/08/07 03:22:08 (permalink)
    quote:
    Originally posted by lleechef

    Keep your food cost to about 30% work long hours and cut your labor cost.


    Food cost about 30% - I can’t agree with this figure. For me 30% means that our Chef doesn’t want to work hard, or we have problem with thefts. Anyway such food cost is occasion for investigation. There are a lot of different ways to reduce food cost without any quality losses, and experienced Chefs know it. So I guess it will be a good topic to discuss it and to share experience.
    #15
    lleechef
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    RE: How profitable are restaurants?? 2006/08/07 04:58:00 (permalink)
    quote:
    Originally posted by newmans

    quote:
    Originally posted by lleechef

    Keep your food cost to about 30% work long hours and cut your labor cost.


    Food cost about 30% - I can’t agree with this figure. For me 30% means that our Chef doesn’t want to work hard, or we have problem with thefts. Anyway such food cost is occasion for investigation. There are a lot of different ways to reduce food cost without any quality losses, and experienced Chefs know it. So I guess it will be a good topic to discuss it and to share experience.


    In a fine dining restaurant like mine, a 30% food cost is excellent when you're selling Black Angus steaks, lobster, the freshest seafood, hand-cut veal, locally made cheeses, vegetables from the farm, homemade pasta, artisinal breads and fine pastries. I challenge anyone to buy the freshest ingredients possible and keep it to 30%........don't forget this was not a hot dog stand nor an Olive Garden, nor a breakfast place. I used to work 100+ hours a week to maintain this cost which ultimately reflected on my bonus and you don't EVEN want to know what that was. The wait for a table on the weekend was 3 hours and they waited.

    So imagine how you could chisel it down just selling dogs or eggs and bacon.
    #16
    ann peeples
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    RE: How profitable are restaurants?? 2006/08/07 06:17:20 (permalink)
    Food cost at 30 percent is excellent.If its alot less, than quality food is not being served and the public is not getting what they pay for.Anyone that is squeezing food costs at less will not last......
    #17
    newmans
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    RE: How profitable are restaurants?? 2006/08/07 09:05:56 (permalink)
    quote:
    Originally posted by lleechef

    Your restaurant can make as much money as you want. In a 90-seat restaurant we would rake in $11,000 in sales every day. The wait staff made good money, I, as the chef, made a fabulous salary, my staff was well paid. Keep your food cost to about 30% work long hours and cut your labor cost.


    So if you will reduce your Food Cost only for 3% you will save $11000*365*3% = $120 465 per year, about $10,000 per month. It’s nearly impossible to save such money reducing labor cost only, of course if a restaurant business well organized. If not, it’s very difficult to generate $11000 every day. But if customer’s major choice will be from Chef’s Recommendations or Restaurant Specialty where Chef will use seasonal products with better quality for lower prices it will help to reduce Food Cost for 3% or even more.It’s very simple example and in reality we need to implement whole complex of different activities including great work of front of the house staff to achieve such result. Anyway $120 000 it’s a good money to work for and I believe it’s possible.
    #18
    V960
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    RE: How profitable are restaurants?? 2006/08/08 08:38:22 (permalink)
    With good capitalization (very important), a good chef, a good location, an attractive building, no gotchas from the local leg breakers, and fresh ingredients plus an interesting menu the business can be very profitable.

    IMHO, serving cooked Sysco frozen everything puts you down to a profit point here and there. Pay your people well, serve very good food and advertise just a bit.
    #19
    bassrocker4u2
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    RE: How profitable are restaurants?? 2006/08/09 08:06:32 (permalink)
    just wondering about your 90 seat place... what would your ace be?
    i am guessing, at 11g per day, you were turning the entire d.r. at least 4 times. that would be 30 dollars ace(average customer expenditure), 90 x 4 = 360 g.c.
    360 x 30 = 10,800$
    is this close? pretty awesome pricing....
    sounds like that 22 dollar lasagna was on you menu..heehee
    i wonder how much folks would pay for a bbq plate, in a fine dining est....
    #20
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