| reply to CylonRed
Re: Bull $hit said by CylonRed:And yet their average profit margin is less than 5% Which means - most of the items do not have that much markup. Certainly alcohol and desserts also have high markups but most of that is eaten by the costs of everything else needed to run a restaurant. With markups like that - they would not be the #1 business to go under in less than 1 year. You're confusing gross margin with net earnings. Food always has to be marked up at least 300% (although you're correct that they make the most on drinks and desserts) which is a gross margin, but net earnings are based on revenue after all costs, including rent, fixtures, labor, insurance, etc. are considered. |
