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Not really. Often, food is 30%, staff is 30%, rent is 30% and 10% goes to the owners (who are paying for a 300k fitout). Coffee markups can be even crazier. Obv
by wisty 15y ago
Not really. Often, food is 30%, staff is 30%, rent is 30% and 10% goes to the owners (who are paying for a 300k fitout). Coffee markups can be even crazier. Obviously, it depends on the restaurant. A good value steak-house might sell a steak, chips, and veggies where the food costs 70% of the meal; but they have large volumes and hope to sell lots of drinks.
Anyway ... the staff and building sit idle for a lot of the time. On a Friday night, there's lots of people. But on a Tuesday at 4pm, there won't be a lot of customers.
I guess you could look for chefs that only wants to work from 11-2 and 5-8, Friday and Saturday, but most chefs want to work 5 days a week.
- nkurz 15y agoYou sound very authoritative, but some of your numbers seem odd. Do you have a source for your 30% rent figure? Most sources I see suggest a much lower number: http://www.4hoteliers.com/4hots_fshw.php?mwi=1661 http://www.4hoteliers.com/4hots_fshw.php?mwi=1661
- encoderer 15y agoI'm not a restaurant guy but I am known to be able to read income statements with my eyes closed :) Assuming the GP was generalizing "Rent" to include all expenses associated with the physical plant and presence, the sample income statement linked is close enough to that 30% number. But your call on whether my assumption is too generous :)
- joe_the_user 15y agoI wasn't. A pan may be a fixed expense but it is to a significant-extend used up at the rate that people consume food, so it's not really "free" if fewer people are in the restaurant. Only "rent rent" and wages if fewer people in the restaurant. Essentially, economies of scale might be possible in operating a restaurant but the place would need to be organized for this from the beginning - the simple ability to get people in the door is worth less than a large share of the receipts.
- encoderer 15y agoActually i meant the GP to my post -- wisty. Not that it matters, of course, I'm just clarifying so my post makes more sense to you. I generally disagree with your sentiments in your post but had nothing to add that really interested me to say.
- wisty 15y agoSorry, you are right. The rent figure is for a cafe, and even that might be high. And I read it in an article from a cafe owner who lost his business. Maybe he was paying too much rent. A lot of restaurants have under 10% rent.
- deleted 15y ago[deleted]