A restaurant has $30K/month fixed costs, $12 average ticket, and 35% food cost. How many covers per month to break even?

How to answer

First, calculate contribution margin per cover. Revenue per cover = $12. Variable cost per cover: food cost = 35% x $12 = $4.20. Assume additional variable costs (credit card fees, disposables) of ~$0.80, so total variable = $5.00. Contribution margin per cover = $12 - $5 = $7.00. Break-even covers = Fixed costs / CM per cover = $30,000 / $7 = 4,286 covers per month. That's ~143 covers per day (30 days). If the restaurant has 50 seats and turns tables 2x at lunch and 2x at dinner = 200 potential covers. At 143 needed, that's a 71.5% utilization break-even — achievable but leaves little margin for error. Key insight: restaurants have razor-thin margins, so labor scheduling and waste management are critical.

Key idea: CM per cover = ticket price - variable costs; then divide fixed costs by CM