Restaurants pay about 40% for food. The rest is payroll, rent, etc. In total, they make about 4%, but they lose money hand over fist if the restaurant is empty.

Restaurants pay about 40% for food. The rest is payroll, rent, etc. In total, they make about 4%, but they lose money hand over fist if the restaurant is empty. Also, that margin is very rubbery, depending on the dish. They might make a pasta dish for 20% of the cost, and a steak for 70% of the cost. Also, drinks can have crazy mark-ups. If the groupon is limited to high-margin meals, then they won't lose money. And they might make a profit on the drinks, or people who change their mind and go for a full price dish. And they might get some repeat business. Also, it looks good for them to look full - passers-by might assume that the restaurant is packed because it's a good one. The thing is, owners have to be very careful about the deal they give. Groupon seems a little unpredictable (for non-experts), so it can be very dangerous. Of course, all marketing has its costs. And restaurants and cafes rarely rely on marketing (fast food excepted).