What is the average restaurant profit

About the operating cost structure, the cost of ingredients usually takes up a significant portion of the total turnover of a catering business, with a range of 20% to 30%. This means that for every 100 yuan of turnover, 20 to 30 yuan will be used to purchase food ingredients.

In addition, in terms of statutory taxes, the restaurant industry is subject to a specific business tax rate, currently set at 5.65%. According to the industry standard calculation method, gross margin can be defined as the percentage of turnover remaining after subtracting the cost of ingredients, i.e. gross margin is equal to turnover (expressed as 100%) minus the cost of ingredients as a percentage of turnover. However, to get the final net profit margin, various overheads including business tax and direct costs need to be further deducted from the gross profit margin.