Revenue minus the direct cost of goods sold (food and beverage). Gross profit does not account for labor or overhead expenses.
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Gross Profit
Revenue minus the direct cost of goods sold (food and beverage). Gross profit does not account for labor or overhead expenses.
Related terms
- Net Profit Margin — The percentage of revenue remaining after all expenses, including food costs, labor, rent, and utilities. Most sub-$2M operators target 5-15%.
- Food Cost Percentage — The ratio of food costs to food sales, expressed as a percentage. Most independent operators target 28-35% for profitability.