Break-even Restaurant

The break-even point is the revenue at which a restaurant covers its fixed costs and begins to generate profit.

Definition

The break-even point is the revenue at which a restaurant covers its fixed costs and begins to generate profit.

Background & relevance for restaurant operators

To calculate it, all fixed costs (rent, staff, insurance, software) are divided by the average contribution margin ratio. A low break-even means less risk. Commission-free ordering systems lower the break-even by reducing variable costs per order.

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