The Biggest Costs to Run a Restaurant

How Much Does it Cost to Run a Restaurant?

The restaurant industry can be a highly rewarding business, but it's also known for being notoriously difficult to turn a profit. In order to run a successful restaurant, it's essential to understand the profit margins and expenses associated with the industry. In this blog post, we'll explore the typical profit margins in the restaurant industry, based on industry standards of 30% for food costs, 30% for labor costs, and 20% for other expenses such as rent, utilities, supplies, chemicals, repairs, and maintenance.

Food Costs

Food costs are one of the biggest expenses for restaurants, and typically account for around 30% of a restaurant's total revenue. Food costs include the cost of all the ingredients that go into the dishes served at the restaurant, as well as any other food-related expenses such as packaging and waste disposal. In order to maintain a healthy profit margin, restaurants need to carefully manage their food costs by sourcing quality ingredients at the right price, minimizing waste, and optimizing their menu pricing to ensure that their prices reflect the cost of ingredients.

Labor Costs

Labor costs, which include the cost of all the employees who work at the restaurant, typically account for around 30% of a restaurant's total revenue. This includes both front-of-house employees, such as servers and hosts, and back-of-house employees, such as cooks and dishwashers. In order to manage labor costs effectively, restaurants need to optimize their staffing levels, carefully manage scheduling, and ensure that their employees are well-trained and productive.

Other Expenses

Other expenses, which typically account for around 20% of a restaurant's total revenue, include rent, utilities, supplies, chemicals, repairs, and maintenance. These costs are necessary for maintaining the physical infrastructure of the restaurant and ensuring that it remains in good working order. In order to manage these expenses, restaurants need to carefully track their expenditures and ensure that they are getting the best value for their money.

Profit Margins

Based on the industry standards of 30% for food costs, 30% for labor costs, and 20% for other expenses, a typical restaurant would have a profit margin of around 20%. This means that for every dollar of revenue generated, the restaurant would retain 20 cents as profit. However, it's important to note that profit margins can vary widely depending on a number of factors, including the type of cuisine served, the location of the restaurant, and the level of competition in the market.

Conclusion

It's important to note that while industry standards suggest a 20% profit margin, the actual profitability of a restaurant can vary depending on the sales volume. For instance, if sales are low, the labor and other expenses may run higher, which would reduce the profit margin. Conversely, if sales are high, labor costs may decrease as a percentage of revenue, and the other expenses may also decrease since they are fixed costs.

One important fixed cost to keep in mind is rent. Rent is typically a significant fixed expense for a restaurant, and it's important to ensure that it does not exceed 10% of total expenses. By keeping fixed costs such as rent low, restaurants can maximize their profit margins and ensure long-term success.

In conclusion, while ideal profit margins for a restaurant are typically around 20%, the actual profitability of a restaurant can vary widely depending on sales volume and the management of expenses. By carefully managing food costs, labor costs, and other expenses, and keeping fixed costs such as rent low, restaurants can maximize their profit margins and run a successful business.

by Joey's Marketing

Buying a Franchise VS Starting a Restaurant

Every Restauranteur Has To Make the Decision

The decision to start a business can be challenging, and one of the key factors to consider is whether to open an independent business or become a franchise owner. Both options have their advantages and disadvantages.

Independent ownership allows you to have complete control over your business operations and branding. You can make all the decisions, set your own prices, and choose your own suppliers. However, being an independent owner can be costly, as you need to invest more time and money into building your brand and creating a customer base.

On the other hand, becoming a franchise owner means you have access to a proven business model, established branding, and ongoing support from the franchisor. This can help you get started quickly and avoid the risks associated with starting a business from scratch. However, you may have less flexibility in decision-making, and there are typically ongoing fees and restrictions that come with being part of a franchise system.

PROS & CONS

Starting Your Own Resturant

Pros:

• •  Complete control over the restaurant's concept, menu, and branding
• •  Ability to create a unique dining experience that stands out in the market
• •  Flexibility to adapt the restaurant as needed to meet changing market trends or customer preferences
• •  Potential for greater profits and return on investment
• •  Ability to establish a local presence and become part of the community

Cons:

• •  High start-up costs and ongoing expenses, including rent, equipment, and supplies
• •  No established business model or brand recognition
• •  Greater risk of failure and lack of support
• •  Need to create a customer base from scratch
• •  Need to develop and implement all business systems and processes, including marketing, human resources, and financial management

Buying a Restaurant Franchise

Pros:

• •  Access to an established business model and brand recognition
• •  Proven track record of success and profitability
• •  Ongoing support from the franchisor, including training and marketing assistance
• •  Access to established supply chains and preferred pricing
• •  Greater potential for success and reduced risk compared to starting a restaurant from scratch

Cons:

• •  Ongoing fees and royalties paid to the franchisor
• •  Less flexibility in menu and branding, and adapting to local market conditions
• •  Limited ability to differentiate the restaurant from other franchise locations
• •  Potential for conflicts with other franchisees or the franchisor
• •  Risk of changes in the franchise system or business model over time, which may not align with the owner's vision

Conclusion

Ultimately, the decision to start your own restaurant or buy a franchise depends on your personal preferences, goals, and financial situation. It's important to weigh the pros and cons carefully before making a decision.

by Joey's Marketing

strEATS Kitchen - Shaking Up Canadian Fast-Casual Dining

No matter where in the world you travel, chances are you can find a unique culinary experience on the streets of any city. From arepas in Venezuela to bánh mì in Vietnam, street food is the great unifier – even if what’s on the menu is different everywhere you go.

In Calgary, in Alberta, Canada, the innovative dining concept of strEATS was born in 2017 to harness the vibrant spirit of street food around the world. This energy was channeled into a creative, and constantly rotating, menu chock-full of inspired tacos, poutines, burritos and bowls, all bursting with fresh ingredients and global flavors.

Over the past five years, the business has grown to include over 20 locations across North America, each with its own unique vibe to reflect the locale in which it sits. As it has scaled, strEATS has not only delivered on its commitment to turn fast-casual dining on its head with mind-blowing experiences, but it also has upheld standards of environmental sustainability and community involvement along the way.

For prospective franchisees joining the strEATS team, the level of support that comes with owning and operating your own business is practically second to none.

by webadmin

strEATS: Authentically Inauthentic

While strEATS burst onto the scene in Calgary, Canada, in 2017, it wasn’t the team’s first rodeo. They had already solidified their claim to fame with Joey’s Seafood Restaurants, a staple in Canada since 1985, celebrated for fish and chips and a secret-family-recipe golden batter that Joe (Joey) Klassen developed himself.

But now, with strEATS, they’re dominating the fast-casual market with cutting-edge food trends and a globally inspired menu that features a mouthwatering array of tacos, burritos, and poutines (otherwise lovingly known as street food and the inspiration behind the strEATS moniker).

It’s what Colin Klassen, strEATS’ head chef and menu mastermind, calls “instagrammable quick- service food,” and its popularity is spreading like wildfire. The brand has already rolled out restaurants in four Canadian provinces, adding a dozen locations in 2021.

by webadmin

The Shift to Fish Shack is Growing Serious Momentum

The growth of North America’s largest seafood restaurant chain has been spurred on by a change in how consumers are eating out. Joey’s Fish Shack’s focus on the experience has drawn the attention of restaurateurs nation-wide.

“Our restaurant has grown up. It’s less cafeteria and far cozier,” says Joe Klassen, founder and CEO of Joey’s Only Franchising Ltd. “Our restaurant décor makes for a more welcoming feel.”

Another new Joey’s has evolved in the west end of Edmonton. The opening of Joey’s Fish Shack in Terra Losa in August 2021 makes 8 new Joey’s Fish Shacks in less than a year.

by webadmin

St. Albert sees a revival of sorts with Joey’s Fish Shack

When Joey’s first came to St. Albert in October 1993, the goal was long-term service for the community. 29 years later, a new spirit has emerged at 3506 Tudor Glen Market – a new and improved Joey’s 2.0.

“Joey’s Fish Shack offers a new menu, a new atmosphere and a new outlook on food,” says Joe Klassen, founder and CEO of Joey’s Only Franchising Ltd. “It’s a step we needed to take to stay current and top of mind with the new consumer.”

https://www.openpr.com/news/2642142/st-albert-sees-a-revival-of-sorts-with-joey-s-fish-shack

by webadmin

Joey’s Fish Shack offers All-You-Can-Eat Fish and Chips on Tuesdays

Like family from another mother, Joey’s Fish Shack is a growing destination in Calgary! Of course, it was founded here so it makes sense that we are so strong in the west! Cone check us out or better yet, come join our franchise family as we grow throughout North America.

by webadmin

Joey’s Seafood and Joey’s Fish Shack among top 10 places to get Fish & Chips in Edmonton

Fish and chips are always a fried food favourite, even in a city as landlocked as Edmonton.

While fish and chips are enjoyable year-round, we’ve found ourselves craving the beer-battered, tartar sauce-covered meal a little more than usual with Easter weekend nearly upon us.

Whether you dine-in, order delivery, or pick up a meal to enjoy during a picnic, this traditional English dish is sure to hit the spot.

Very excited to see that both Joey’s Seafood and Joey’s Fish Shack made the top ten and one of our pictures was on the front cover!

by webadmin