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Profitable Restaurants for Sale

Profitable Restaurants for Sale

Profitable Restaurants for sale are defined as any business opportunities that generate positive cash flow.  The opportunities we show below generate very high earnings of six figures or more for an owner-operator after paying all expenses associated with the business.   For those searching to find business opportunities, it's not unusual to focus on those with the greatest earnings.  Profitable restaurants for sale like this collection of listings have the following points in common:

  • Sales of $1.0 million or more 
  • Earnings of $100,000 or more 
  • Opportunity for new buyers to acquire
Controlling costs and driving sales are the two key elements to generating a strong return like these profitable restaurants for sale.  For the food industry, the following are the key cost lines to control to generate the greatest earnings.
  • Food Costs 
  • Labor Cost
  • Occupancy Costs
How are these defined and best controlled when finding profitable restaurants for sale? Food Costs are the direct costs to produce the food sold at the customer level.  For most CPA's that means the cost of raw ingredients and paper sleeves to hold the food are direct costs.  For most, it does not include the direct labor costs of those preparing the food. On average, food costs should range from 28 - 32% of sales as a rate to sales but that varies based on the concept and type of food.  Mexican and Italian restaurants have lower food costs as they use fewer proteins than a steakhouse for example. 

Labor costs are the costs in any profitable restaurant for sale reflecting both the hourly and salaried employees- the entire workforce.  When reviewing profitable restaurants for sale, it's important to make sure that all the workers in the restaurant are being paid legally and all the hourly workers needed are reflected in the payroll.  For the most part, you can count on labor costs being about 25% as a rate to total sales.

The last huge component of a profit and loss statement for any business and, profitable restaurants for sale like these, are the occupancy costs.  Occupancy includes rent, CAMS (Common Area Maintenance Charges), Taxes, and Insurance paid to the landlord. The entire amount is counted in occupancy.  As restaurant brokers, those of us at We Sell Restaurants, like to see occupancy costs at no more than ten percent as a rate to total sales.

If you are in the market to find profitable restaurants for sale, it's a good idea to become familiar with these common ratios and apply them to the business opportunities you review.  This is an industry where high earnings can be found but doing your homework upfront is a good way to be ready to sort out the best from the rest.

Want more information on buying profitable restaurants for sale?  Visit us online at this link to see our restaurants for sale or at this link for articles and information on buying a restaurant.

Profitable Restaurants for Sale

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