How to use this restaurant EBITDA calculator

1. Enter Total Revenue ($) — annual food, beverage, catering, and ancillary sales for the period you are analyzing. Use the same period (month, quarter, or year) for every other input.
2. Enter Cost of Goods Sold ($) — food plus beverage purchases consumed during the period. Pull from your P&L; do not include labor here even if your accountant blends prep labor into COGS.
3. Enter Labor Costs ($) — gross wages, payroll taxes, workers' comp, health insurance, and management salary. Restaurant labor is usually the largest controllable expense, so treat it as its own line, not lumped into other operating expenses.
4. Enter Occupancy Costs ($) — rent or mortgage interest, common-area maintenance, property tax, building insurance, and utilities. Keep occupancy separate so you can also read ROPBO (operating profit before occupancy).
5. Enter Other Operating Expenses ($) — marketing, supplies, repairs, credit-card fees, music licensing, and third-party delivery commissions. Anything operating that is not COGS, labor, or occupancy.
6. Enter Depreciation ($) and Amortization ($) — non-cash charges for kitchen equipment, leasehold improvements, and any amortized lease or franchise rights. These come from your fixed-asset schedule, not the P&L expense line.
7. Click Calculate EBITDA to see restaurant EBITDA, EBITDA margin, gross profit, and total operating expenses. Compare the margin against the benchmark table for your concept type.

Examples

How it works

When to use this calculator

• Valuing a single-unit restaurant for sale or purchase. Independent restaurants typically change hands at 3-5x trailing EBITDA, sometimes lower if the buyer is also buying the lease and inventory. Running the seller's P&L through this calculator gives you the denominator quickly and exposes whether the asking price implies a multiple the segment supports.
• Benchmarking a multi-unit portfolio across concepts. Comparing a QSR to a fine-dining unit on net income is misleading because lease structures, depreciation schedules, and capital structures differ wildly. EBITDA margin normalizes those out and shows which concept is actually generating the most operating cash per dollar of sales.
• Negotiating a lease or refinancing existing debt. Landlords increasingly ask for trailing EBITDA when underwriting percentage rent or rent-relief deals, and SBA 7(a) lenders use debt-to-EBITDA ratios to size restaurant loans. Knowing your number lets you walk into both conversations prepared.
• Tracking operating health quarter over quarter. Because EBITDA strips out one-time tax items and equipment depreciation, watching the trend month over month shows whether menu changes, pricing actions, or staffing decisions are improving the underlying business or just masking weakness with non-recurring items.
• Pitching investors on a new concept or expansion. Private equity and family-office investors in food service speak the language of unit-level EBITDA and EBITDA margin almost exclusively. A pitch deck without those numbers — or with numbers that do not tie to the P&L — will not get a second meeting.

Common mistakes

• MistakeSubtracting depreciation and amortization from EBITDA.
  FixThe whole point of EBITDA is that it is before D&A. Enter depreciation and amortization for context only — the calculator reports them separately so you can compute EBIT if you need it. Do not include them in the operating-expense lines.
• MistakePutting cooks' wages into COGS to match a manufacturing-style P&L.
  FixRestaurant industry studies (National Restaurant Association, Technomic) keep all wages in Labor and food/beverage purchases in COGS. Mixing them inflates COGS, deflates labor, and breaks every benchmark you might compare against.
• MistakeForgetting to add back the owner's above-market salary on an owner-operated unit.
  FixIf the working owner pays themselves $200k when a hired GM would cost $90k, the extra $110k is effectively a distribution, not an operating expense. Use adjusted EBITDA (SDE) for valuation in that case — add back the excess compensation so the buyer sees the true earning power.
• MistakeMixing periods — using trailing-twelve-month revenue with last-month operating expenses.
  FixEvery input must come from the same period. If you are computing trailing-twelve-month EBITDA, all four expense buckets and revenue must be TTM. Mixing scales the margin in a way that is essentially meaningless.
• MistakeTreating EBITDA as cash flow.
  FixEBITDA ignores working capital, capital expenditures on new equipment, principal payments on equipment loans, and lease deposits. For a restaurant doing $2M with a kitchen remodel, free cash flow can be a small fraction of EBITDA. Cross-check with the cash flow statement before making decisions about distributions.
• MistakeComparing your EBITDA margin to a different segment's benchmark.
  FixA 12% margin is below average for a fast-casual unit but above average for a full-service white-tablecloth restaurant. Always compare against peers in your own segment — QSR, fast-casual, casual dining, fine dining, or bars.

Frequently asked questions

Sources

• Restaurant Industry Operations Reports and Performance Benchmarks · National Restaurant Association
• Publication 535, Business Expenses (Depreciation, Amortization, and Interest) · Internal Revenue Service
• Industry Statistics and Trends — Food Services and Drinking Places (NAICS 722) · U.S. Bureau of Labor Statistics
• SBA Industry Reports — Food Services (NAICS 722) Loan Performance and Benchmarks · U.S. Small Business Administration
• Margins by Sector — Restaurant/Dining Industry Data · NYU Stern (Aswath Damodaran)
• Final Rule: Conditions for Use of Non-GAAP Financial Measures (Regulation G) · U.S. Securities and Exchange Commission