Restaurant Break-Even Analysis: Covers per Day, the Fixed Part of Labor and the Delivery Mix
By Marji · Published · 5 min read
Break-even sales = fixed costs ÷ contribution margin ratio, and break-even covers per day = break-even sales ÷ average check ÷ open days. In the example here, $45,400 of monthly fixed costs and a 52.3% contribution margin ratio need $86,807 of sales — about 88 covers a day at a $38 check over 26 days. Count the minimum crew as fixed, add delivery commission to variable costs, and add loan principal if you want the cash break-even.
Break-even in dollars is hard to act on during service; break-even in covers per day can be checked against the book every night. Getting it right depends less on the formula than on how you sort the costs that go into it.
Step 1: Sort a month's costs into fixed and variable
Take a representative month from your P&L and ask of each line: would it fall if you served fewer guests next month? Food, card fees and packaging would. Rent, insurance and salaries would not. Hourly labor is both: the crew you need to open the doors is there at 40 covers or 140, and only the hours above that minimum move with volume.
| Line | Fixed | Variable | Variable as % of sales |
|---|---|---|---|
| Food and beverage cost | $32,240 | 31.0% | |
| Hourly labor: minimum crew to open, loaded | $12,000 | ||
| Hourly labor above the minimum, loaded | $13,000 | 12.5% | |
| Card fees | $2,808 | 2.7% | |
| Packaging and supplies | $1,560 | 1.5% | |
| Salaried manager and chef, loaded | $9,000 | ||
| Rent | $9,000 | ||
| Utilities, insurance, repairs | $4,300 | ||
| Marketing, accounting, software | $2,700 | ||
| Owner's salary | $7,500 | ||
| Loan interest | $900 | ||
| Total | $45,400 | $49,608 | 47.7% |
At $104,000 of sales this month earns $8,992, or 8.6%, after paying the owner a salary. The owner's pay belongs in fixed costs: a break-even that assumes the owner works free says when the business stops losing money, not when it works.
Step 2: Find break-even sales and covers per day
Break-even sales
Fixed costs ÷ (1 − Variable costs ÷ Sales)
The bracket is the contribution margin ratio: the share of each sales dollar left after variable costs to pay the fixed ones.
Worked example · Break-even for the month above
- Contribution margin ratio: 1 − 47.7%
- 52.3%
- Break-even sales: $45,400 ÷ 0.523
- $86,807
- Break-even covers per month: $86,807 ÷ $38
- 2,284
- Open days
- 26
- Break-even covers per day
- 87.9, so about 88
The restaurant is serving about 105 covers a day, so it runs about 17 covers a day above break-even. The figures are illustrative.
Three corrections simple break-even math misses
1. The minimum crew is a fixed cost
Treat all hourly labor as variable and the same month looks safer than it is: variable costs rise to 59.2% of sales, fixed costs fall to $33,400, and break-even drops to $81,940 — about 83 covers a day. The real floor is about 88. In a month averaging 85 covers a day, the all-variable model shows a profit and the restaurant loses money, because the minimum crew is paid whether the covers come or not. The fixed vs. variable cost entry lists which lines are semi-variable.
2. Delivery commission is a variable cost of the sales it touches
An app commission comes off every app sale, so it raises the variable cost ratio in proportion to the app's share of sales. DoorDash lists delivery commissions of 15%, 25% and 30% of the subtotal on its Basic, Plus and Premier plans (DoorDash). If 20% of this restaurant's sales came through a 25% plan at the same prices, variable costs would rise by 5 points of sales (0.20 × 25%), the contribution margin ratio would fall to 47.3%, and break-even would rise to $95,983 — about 97 covers a day, nine more than before. Higher app prices offset part of that; in New York City, the delivery app fee caps limit what apps can charge.
3. Loan principal is cash, not a P&L expense
The P&L includes loan interest but not principal, so the profit break-even ignores it. If the loan also takes $3,100 a month of principal, the cash break-even is ($45,400 + $3,100) ÷ 0.523 = $92,734 — about 94 covers a day. Use the profit figure to judge the business and the cash figure to know whether the account can pay its bills; the not-making-money guide covers the difference.
What moves break-even
| Change | Break-even sales | Covers per day |
|---|---|---|
| Baseline | $86,807 | 87.9 |
| Average check $38 → $40 from add-ons, same cost ratios | $86,807 | 83.5 |
| Food and beverage cost 31% → 29% | $83,610 | 84.6 |
| Rent $1,000 a month lower | $84,895 | 85.9 |
| 20% of sales through a 25% app plan | $95,983 | 97.1 |
| Cash break-even with $3,100 of principal | $92,734 | 93.9 |
A higher average check leaves break-even sales unchanged here but needs fewer covers to reach it, because add-ons are assumed to carry the same cost ratios as the rest of the menu. A price increase does more: it lowers the variable cost ratio as well, so both the sales and the covers needed fall. The break-even calculator takes your own fixed costs, variable ratio, check and days.
Read it against your days, not just your month
Put the break-even covers beside covers by day of the week. A restaurant that averages 105 covers a day can still run a string of 60-cover Mondays and Tuesdays, and the month only works because the weekend carries them. RevPASH by the hour shows which hours fill the room. A slow day below break-even is not automatically a day to close, though: closing saves only the costs that stop with the doors — that day's hourly crew, utilities and variable costs — while rent, salaries and insurance continue. Compare the day's contribution — sales minus its variable costs — with the crew and utility cost you would actually save before deciding.
Marji keeps the food side of the variable ratio current: each dish's plate cost from your supplier invoices, so a price rise from a supplier shows up as a higher food cost before it shows up in the month's P&L. It does not keep your P&L or labor figures; those come from your books and payroll.
Is labor a fixed or variable cost for break-even?
Both. Salaries and the minimum crew you need to open are fixed; hourly labor above that minimum is variable. Splitting it gives a higher, more honest break-even than treating all labor as variable.
Should the owner's pay be in fixed costs?
Yes, at a market rate for the job. Without it, break-even says when the business stops losing money, not when it pays for the work that runs it.
How do delivery apps change break-even?
Commission raises the variable cost of every app sale. With 20% of sales at a 25% commission, the example's break-even rises from about 88 to about 97 covers a day. Higher app prices recover part of that.
What is a good break-even?
There is no benchmark that fits every room. The useful test is the gap between break-even covers and what the room can actually serve in the hours you are open — and how many of your days fall below the line.
Find your own break-even covers
Enter monthly fixed costs, your variable cost ratio, average check and open days to see break-even sales, covers per month and covers per day.
Open the break-even calculatorEvaluating another location? Read what restaurant survival statistics can and cannot tell you, then test your own sales requirement rather than treating a national cohort percentage as your business forecast.
Terms this guide uses
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