Restaurant profit margins vary sharply by service model, cost structure, and measurement definition. In 2024, U.S. fullservice respondents reported median wages and benefits at 36.5% of sales, while limited-service respondents reported 31.7%. Public restaurant companies reported restaurant-level margins from 17.1% at Texas Roadhouse to 26.7% at Chipotle, but those figures are not the same as corporate operating or net margins.
Contents
- 2024 benchmarks by service model
- Public-chain restaurant margins
- Margin changes over time
- Food and beverage costs
- Labor costs
- Occupancy and other costs
- Restaurant margins versus corporate profitability
2024 benchmarks by service model
The National Restaurant Association’s 2024 survey describes U.S. respondents and separates fullservice from limited-service operators. Its statistics are medians, not a universal “average restaurant margin,” and the labor comparisons are especially useful for seeing how profitable and loss-making operators differed.
Among fullservice restaurant respondents, median salaries and wages, including benefits, were 36.5% of sales in 2024. Fullservice operators reporting a pre-tax profit had median labor costs of 34.2% of sales, compared with 42.9% among operators reporting a loss. The gap between those two groups was 8.7 percentage points, making labor control a notable differentiator in the survey.
Limited-service respondents reported median salaries and wages, including benefits, of 31.7% of sales in 2024. Limited-service operators reporting a pre-tax profit had median labor costs of 30.0% of sales, while operators reporting a loss had median labor costs of 34.1%.
The source does not establish that labor cost alone caused profitability. It does show a consistent pattern: the profitable group had lower median labor costs in both service models. These survey medians should be used as operating benchmarks for U.S. respondents, not as a target that applies equally to every location, menu, or concept. National Restaurant Association, “Elevated labor costs had a significant impact on restaurant profitability in 2024”
Public-chain restaurant margins
Public-company filings provide another view: restaurant-level operating or profit margins for named chains. These measures generally describe the economics of operating restaurants before some corporate-level costs, so they are not automatically comparable with net income margins.
| Company and period | Restaurant-level measure |
|---|---|
| Chipotle, fiscal 2024 | 26.7% |
| First Watch, fiscal 2024 | 20.1% |
| Shake Shack, fiscal 2024 | 21.4% |
| Texas Roadhouse, fiscal 2024 | 17.1% |
| Portillo’s, fiscal 2024 | 8.2% operating income as a share of revenue |
Chipotle reported a 26.7% restaurant-level operating margin for the year ended December 31, 2024. Its restaurant-level operating margin was 24.8% in the three months ended December 31, 2024. First Watch reported a 20.1% restaurant-level operating profit margin for the fiscal year ended December 29, 2024. Shake Shack reported a 21.4% restaurant-level profit margin for the fiscal year ended December 25, 2024.
Texas Roadhouse reported a 17.1% restaurant margin as a percentage of restaurant and other sales for the fiscal year ended December 31, 2024, and generated $915.8 million in restaurant margin dollars. Portillo’s reported operating income equal to 8.2% of total revenue for the fiscal year ended December 29, 2024. Brinker International reported operating income equal to 5.2% of total revenue for the fiscal year ended June 26, 2024. The Portillo’s and Brinker figures in this paragraph are consolidated operating measures, not the same restaurant-level definition used for the first four comparisons.
McDonald’s reported that franchised restaurants generated approximately 90% of its total restaurant margin dollars in 2024. That is a business-model statistic rather than a margin percentage, but it illustrates why ownership mix matters when interpreting restaurant profitability. Chipotle, “Reconciliation of Non-GAAP Financial Measures”; First Watch, 2024 Annual Report; Shake Shack, Q4 2024 Shareholder Letter; Texas Roadhouse, 2024 Annual Report; Portillo’s, Fourth Quarter and Full Year 2024 Earnings Release; Brinker International, 2024 Annual Report; McDonald’s, 2024 Annual Report
Margin changes over time
The 2024 figures also show how margins changed for several public chains. Chipotle’s restaurant-level operating margin rose from 26.2% in 2023 to 26.7% in 2024. First Watch’s restaurant-level operating profit margin rose from 20.0% in 2023 to 20.1% in 2024. Texas Roadhouse’s restaurant margin increased from 15.4% of restaurant and other sales in 2023 to 17.1% in 2024.
Shake Shack’s reported restaurant-level profit margin moved through several fiscal years: 14.3% in fiscal 2020, 16.8% in fiscal 2021, 17.5% in fiscal 2022, and 19.9% in fiscal 2023, before reaching 21.4% in fiscal 2024. These are fiscal-year figures, and the source’s period labels should be retained when comparing them.
McDonald’s reported that total restaurant margins increased 1% in 2024 versus 2023, both on a reported and constant-currency basis. The statement describes a change in total restaurant margins, while the Shake Shack, Chipotle, First Watch, and Texas Roadhouse figures above are stated as percentage margins.
Food and beverage costs
Food, beverage, paper, and packaging costs consume a large share of restaurant sales before labor and other operating expenses are paid. The exact label differs by company, so the figures below should be compared with their stated denominator and cost definition.
Chipotle’s food, beverage and packaging costs were 29.8% of total revenue for the year ended December 31, 2024, and 30.4% of total revenue in the fourth quarter. First Watch reported food and beverage costs of 22.2% of restaurant sales for the fiscal year ended December 29, 2024. Shake Shack reported food and paper costs of 28.2% of Shack sales for the fiscal year ended December 25, 2024.
Texas Roadhouse reported food and beverage costs of 33.4% of restaurant and other sales for the fiscal year ended December 31, 2024. Brinker International reported food and beverage costs of 25.3% of company sales for the fiscal year ended June 26, 2024. Portillo’s reported food, beverage and packaging costs of 34.0% of revenue for the fiscal year ended December 29, 2024.
McDonald’s reported $2.995 billion in food and paper costs for company-owned and operated restaurants in 2024. That is a dollar amount, not a percentage of total restaurant sales, and therefore should not be substituted for the percentage benchmarks above.
Labor costs
Labor is a second major operating cost and the clearest cross-company comparison available in the supplied 2024 filings. Chipotle’s labor costs were 24.7% of total revenue for 2024 and 25.2% in the fourth quarter. First Watch reported labor and other related expenses of 33.4% of restaurant sales.
Shake Shack reported labor and related expenses of 28.1% of Shack sales for fiscal 2024. Texas Roadhouse reported restaurant labor expenses of 33.1% of restaurant and other sales. Brinker International reported restaurant labor costs of 33.6% of company sales. Portillo’s reported labor costs of 25.5% of revenue.
McDonald’s reported $2.959 billion in payroll and employee benefits for company-owned and operated restaurants in 2024. As with its food-and-paper figure, this is an absolute cost and not a margin percentage. The company-level dollar disclosures and the chain percentage disclosures answer different questions: one describes spending scale, while the other describes cost intensity relative to a stated sales base.
Occupancy and other costs
Occupancy and other operating costs further separate a restaurant’s sales from its restaurant-level margin. Chipotle reported occupancy costs of 5.0% of total revenue and other operating costs of 13.9% for 2024. Shake Shack reported occupancy and related expenses of 7.7% of Shack sales and other operating expenses of 14.8% for fiscal 2024.
Texas Roadhouse reported restaurant rent expense of 1.5% of restaurant and other sales and other restaurant operating expenses of 14.9% for 2024. Portillo’s reported occupancy costs of 5.2% of revenue and other operating expenses of 11.7% for fiscal 2024.
The different occupancy percentages reflect more than rent policy alone: the denominators, property strategies, accounting classifications, and operating models differ. A low rent percentage is not by itself evidence of a higher total profit margin, just as a higher percentage does not identify the source of every cost difference.
Restaurant margins versus corporate profitability
Restaurant-level margins are not the same as corporate or GAAP profitability. Public filings explicitly warn that non-GAAP restaurant-level measures can exclude corporate, depreciation, pre-opening, or other costs and are not directly comparable across companies.
Chipotle’s income from operations was 16.9% of total revenue for the year ended December 31, 2024, below its 26.7% restaurant-level operating margin. First Watch reported an adjusted EBITDA margin of 11.2% of total revenue for the fiscal year ended December 29, 2024.
For fiscal 2024, Shake Shack reported an adjusted EBITDA margin of 14.0% of total revenue, operating income margin of 0.2%, and net income margin of 0.9%. Those three corporate measures are materially different from its 21.4% restaurant-level profit margin. Texas Roadhouse reported income from operations of 9.6% of total revenue for 2024. Brinker International reported income before income taxes of 3.7% of total revenue for fiscal 2024. Portillo’s reported net income of 4.9% of revenue for fiscal 2024.
For restaurant operators, the practical reading is to keep the layers separate: use survey medians to benchmark labor by service model, restaurant-level measures to study unit economics, and corporate or GAAP measures to understand what remains after broader business costs. The 2024 data supports comparisons within a definition and period; it does not support treating every percentage as one standardized restaurant profit margin.