Most eating places function on such slender revenue margins {that a} dangerous month can wipe out a worthwhile yr.
“Many full eating rooms nonetheless finish the month with skinny or unfavorable margins,” in line with Restaurant Mode.
Throughout the trade, common restaurant internet revenue margins vary between 3 and 10%.
A 2024 Nationwide Restaurant Affiliation survey confirmed that many eating places fall on the decrease finish of that scale.
“Amongst full-service respondents to the survey, earnings earlier than taxes represented a median of two.8% of gross sales in 2025. For limited-service respondents, earnings earlier than taxes was a median of 4.0% of gross sales,” in line with NRA’s 2025 Restaurant Operations Data Abstract.
Rising prices have additionally created a scenario the place eating places want to boost costs, however that may additionally ship clients elsewhere.
“With across-the-board rising enter prices, if the typical restaurant operator hadn’t raised their costs within the final 5 years, their margin would have gone from 5% of gross sales pre-2020, to a pre-tax lack of practically 24% in the present day,” in line with NRA research on inflation.
It is a difficult working atmosphere that has led to many restaurant operators closing their doorways, and Pihakis Restaurant Group, which has closed over a dozen eating places, has been struggling to keep away from shutting down utterly.
Pihakis Restaurant Group faces $13.8 million in debt
Birmingham-based Pihakis Restaurant Group (PRG), which incorporates eating places in Atlanta, faces $13.7 million in lawsuits and liens, in line with a report by AL.com.
The chain, which operates quite a lot of ideas, together with Little Donkey Mexican Restaurant, Rodney Scott’s BBQ, Hero, Magnolia Level, and Psito, has already closed a lot of places.
“Since mid-April, the group has each briefly and completely closed 12 eating places throughout the Southeast, together with Psito in Summerhill and Hero Diner in Fayetteville. Google and the group’s restaurant web sites at present listing the Atlanta places of Psito and Hero Diner as ‘briefly closed,'” reported Rough Draft Atlanta.
Various the chain’s Hero doughnut retailers, typically known as Hero Diner, have closed earlier than the present troubles.
“At its peak, there have been no less than ten Hero places throughout 4 states. The corporate closed short-lived places in Charleston and Nashville in 2024 and after opening in Montgomery in Might 2025, closed it, too, earlier this month,” Tomorrow’s News Today Atlanta reported.
As well as, all eating places on the firm’s multi-eatery Valley Submit undertaking have closed, after a lawsuit was filed in opposition to quite a lot of Pihakis Restaurant Group manufacturers and founder Nick Pihakis.
