Owning a restaurant looks simple from the outside: good food, a great location, and a dining room full of customers. But behind the scenes, restaurants operate on surprisingly thin margins. Rent, labor, food costs, equipment, utilities, turnover, payment processing, and delivery fees can all take a piece of the revenue.

In this video, we break down the real economics of owning a restaurant — from startup and construction costs to food and labor, prime cost, menu pricing, delivery platforms, customer reviews, expansion, and the difference between revenue and actual profit. We also look at why a restaurant making $1 million in annual sales can end up with only a fraction of that left as profit.

The restaurant business can absolutely work, but the numbers have to stay under control. A few percentage points in food cost, labor, churn, or operating expenses can be the difference between a healthy business and a year of losses.

So what does it really take to own a restaurant — and where does the money actually go?

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