Why a restaurant is not making money: the checks to run on the numbers
There are five checks: actual food cost, labor by time band, rent, prices and break-even point. They use documents the restaurant already has: invoices, inventory, sales, payroll summary and lease.
In brief
- A full restaurant can still earn nothing: what counts is what is left after costs.
- The first number to know is the break-even point, in daily sales.
- In this guide's example: €1,573 a day, about 58 covers with an average check of €30 including VAT (IVA).
What are the 5 checks?
| Check | Documents | Warning sign |
|---|---|---|
| 1. Actual and theoretical food cost | Invoices, inventory | Gap of over 2 points |
| 2. Labor by time band | Payroll summary, shift schedules | Staffing per service well above average |
| 3. Rent | Lease, sales | Rent above the sustainable share |
| 4. Prices | Menu, supplier price lists | Prices unchanged for over a year |
| 5. Break-even point | Monthly sales | Sales close to break-even |
The thresholds are those ACRA uses in its work with restaurants. Two points of food cost, on €600,000 of revenue, are worth €12,000 a year.
How is the break-even point calculated?
Break-even point = fixed costs ÷ (1 − variable costs as % of revenue)
| ACRA calculation (example) | Value |
|---|---|
| Fixed costs: labor, rent, other fixed | €312,000 |
| Variable costs: raw materials and others | 36% of revenue |
| Annual break-even point | €487,500 |
| Per day, over 310 days | €1,573 |
| In covers, average check €30 including VAT | 58 |
Example values, not market averages.
What happens if sales fall?
| Annual sales | Operating margin |
|---|---|
| €600,000 (forecast) | €72,000 |
| €510,000 (−15%) | €14,400 |
| €450,000 (−25%) | −€24,000 |
Fixed costs stay the same. This is why a 15% drop takes away 80% of the margin.
Are prices unchanged?
In August 2026, unprocessed food cost 3.8% more than a year earlier (Istat, Italy's national statistics institute). In 2025, restaurant menu prices rose 3.2% (FIPE, Italy's restaurant trade association). A menu unchanged for a year has lost margin, dish by dish.
Further reading: food cost · labor · rent.
Frequently asked questions
The restaurant is full but not making money: why?
Usually because of one of these items: actual food cost too high, labor sized for full services, prices unchanged, rent too high for sales.
How is the break-even point of a restaurant calculated?
Fixed costs divided by one minus the share of variable costs. With €312,000 of fixed costs and 36% variable: €487,500 a year, €1,573 a day.
Which documents are needed to understand why a restaurant is not making money?
Income statement (P&L), monthly sales, purchase invoices, inventory, payroll summary and lease.
Sources
- Prices of unprocessed food, August 2026: Istat, press release of September 16, 2026 (in Italian).
- Businesses, spending, prices and employment in the restaurant industry, 2025: FIPE-Confcommercio, Rapporto Ristorazione 2026, summary of April 9, 2026 (in Italian).
- The calculation examples are elaborations by AC Retail Advisory on hypothetical values, consistent with the example income statement in the food cost guide.
Updated October 9, 2026.
Author
Andrea Calistri, founder of AC Retail Advisory. I have 20 years of experience in food retail and the food industry and have opened more than 200 locations. I have run operations for restaurant networks, served as CEO in Italy, France and the Netherlands, and advised restaurant chains and food companies as a consultant.
Restaurant check-up
Where the restaurant loses margin, in euros.
For a complete read of the restaurant's numbers: restaurant check-up.
