Quick answer
A restaurant that doesn't measure is flying blind. Restaurant KPIs are the few numbers that, checked every month, tell you whether you're making money, where margin leaks and what to fix before it's too late. This guide covers the 12 indicators that actually matter — food cost, labor cost, prime cost, average check, margin, break-even and the rest — with formulas, worked examples and the benchmark ranges that tell you if you're inside or outside the line.
Why 12 numbers are enough
You can calculate dozens of metrics, but on the floor and in the kitchen you need only a few, read consistently. A useful KPI has three traits: it's calculable from data you already have (sales, costs, covers), it's comparable over time, and it's actionable — if it worsens, you know which lever to pull.
The operating rule is simple: the same numbers, every month, always with the same formula. It's the month-over-month comparison (and against the same month last year) that surfaces problems, not a single value in isolation.
The 12 KPIs in one table
| # | KPI | What it measures | Formula | Benchmark | |---|---|---|---|---| | 1 | Food cost % | Cost of ingredients vs food sales | food cost ÷ food revenue | 28-35% | | 2 | Beverage cost % | Cost of drinks vs beverage sales | beverage cost ÷ beverage revenue | 18-28% | | 3 | Labor cost % | Weight of labor | labor cost ÷ total revenue | 28-35% | | 4 | Prime cost % | Food + labor | (food + labor) ÷ revenue | 55-65% | | 5 | Average check | Average spend per guest | revenue ÷ covers | format-dependent | | 6 | Covers | Guests served | count | — | | 7 | RevPASH | Revenue per available seat hour | revenue ÷ (seats × hours) | format-dependent | | 8 | Operating margin % | Profit before tax and finance | operating profit ÷ revenue | 10-20% | | 9 | Break-even | Sales to cover all costs | fixed costs ÷ (1 − variable %) | — | | 10 | Table turns | Times a seat is reoccupied | covers ÷ seats | shift-dependent | | 11 | Waste % | Food lost vs purchased | waste ÷ purchases | < 4-5% | | 12 | Monthly cash flow | Net liquidity for the month | cash in − cash out | > 0 |
1-2. Food cost and beverage cost
Food cost is the first number to watch. It measures how much of your food sales goes into ingredients.
Food cost % = cost of food sold ÷ food revenue × 100
Example: in one month you buy and consume €9,000 of food (using the inventory formula: opening stock + purchases − closing stock) and bill €28,000 of food.
Food cost = 9,000 ÷ 28,000 = 32.1%
That's a healthy figure for a full-service restaurant. Beverage cost follows the same logic on drinks and must be kept separate: wine and cocktails carry very different margins from food, and mixing them hides the problems. To work out food cost dish by dish and set prices, use the food cost calculator.
3-4. Labor cost and prime cost
Labor cost includes gross wages, social contributions, severance, overtime and collaborators. It's expressed as a percentage of total revenue:
Labor cost % = total labor cost ÷ revenue × 100
On its own it says little. The number that really matters is prime cost, the sum of food cost (plus beverage) and labor cost: the two largest expenses and, crucially, the two you control most.
Prime cost % = (food + beverage + labor) ÷ revenue × 100
Example on €40,000 of monthly revenue:
- Food + beverage: €12,800 (32%)
- Labor: €12,000 (30%)
- Prime cost = 24,800 ÷ 40,000 = 62%
Below 65% you're in manageable territory. Above 70% it's almost impossible to close in profit: before touching anything else, act here.
5-6. Average check and covers
Average check is revenue divided by the number of covers (guests, not tables). It's the most underrated lever: raising it by a few euros changes the P&L without needing one more customer.
Average check = revenue ÷ number of covers
Example: €40,000 ÷ 1,450 covers = €27.6. Pushing it to €30 with an extra glass of wine and a dessert means, for the same covers, roughly €3,480 of extra monthly revenue. To measure it and simulate upselling effects, use the average check calculator.
Covers must always be counted, because they're the denominator of half the other KPIs and reveal the real seasonality of the venue.
7. RevPASH: the KPI almost nobody uses
RevPASH (Revenue Per Available Seat Hour) measures revenue per seat per hour of opening. It's the most honest way to assess how well you monetise space and time — the two resources you can't expand.
RevPASH = revenue ÷ (number of seats × service hours)
Example: one evening you take €2,400, with 60 seats and 4 hours of service → 2,400 ÷ (60 × 4) = €10 per seat per hour. Comparing RevPASH between Tuesday and Saturday tells you whether the issue is pricing or footfall, and where to concentrate staff.
8-9. Operating margin and break-even
Operating margin is what's left after all running costs, before tax and finance charges. It's the summary KPI for profitability:
Operating margin % = operating profit ÷ revenue × 100
A margin between 10% and 20% is considered good in hospitality. Below 5% there's little cushion for the unexpected.
Break-even is the minimum revenue that covers all costs:
Break-even = fixed costs ÷ (1 − variable cost %)
With €22,000 of fixed costs and variable costs at 40%: 22,000 ÷ 0.60 = €36,667/month. Above this threshold every euro yields 60 cents of margin; below it, you lose.
10-12. Table turns, waste and cash flow
Table turns tell you how many times a seat is reoccupied in a service: covers ÷ seats. A low turn rate on strong days signals slow service times or "parked" tables.
Waste measures food lost to spoilage, errors or wrong portions, against total purchased. Keeping it under 4-5% is one of the fastest ways to improve food cost without raising prices.
Monthly cash flow is net liquidity: cash in minus cash out. A restaurant can be "in profit" on paper yet run dry of cash because of supplier payments, taxes and seasonality. Cash flow is the KPI that tells you whether you can pay wages tomorrow.
How to read them together: a mini-dashboard
KPIs must be read as a group, not in isolation. A sample monthly read:
| KPI | Value | Status | |---|---|---| | Food cost | 34% | borderline | | Labor | 31% | ok | | Prime cost | 65% | at the limit | | Average check | €27.6 | needs lifting | | Operating margin | 8% | low |
The story they tell: margin is low because prime cost is at the limit and the check isn't pushing. The priority action isn't cutting staff (it's fine) but working on food cost and average check together.
Common mistakes
- Estimating food cost by eye, without inventory. True cost of goods sold is opening stock + purchases − closing stock, not just the month's purchases.
- Comparing adjacent months. Seasonality is huge: compare June with last year's June, not June with February.
- Looking only at revenue. A record sales month can close in the red if food cost and labor have blown up.
- Ignoring average check. It's the fastest lever on the P&L and the most neglected.
- Changing the formula every month. If you calculate KPIs different ways, the comparisons are worthless. Fix the method and keep it.
- Measuring without acting. A dashboard nobody reads to decide is wasted time. Every out-of-range number must trigger an action.
Related resources
- Average check calculator — average spend per guest and the effect of upselling
- Food cost calculator — food cost per dish and the correct selling price