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Comment by maxxxxx | Hacker News Reader

Is the margin that thin even in that price range? I would think the 5% number is for cheaper restaurants but not for higher prices ones.

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The most profitable restaurants are typically the ones with cheap food. It is counterintuitive, but true.

Profit and margin aren't the same thing though.

There's a difference between profit and profit margin. A cheap restaurant with a low margin can be more profitable due to volume.

Yes, and fine dining is typically worse in every metric imaginable. That's why there is no McDonald's of fine dining. Besides being an oxymoron, the business model is terrible.

You turn over fewer tables with more expensive food, more staff, more real estate, more everything. Then the landlord raises your rent, sucks out all the profit, and you're done.

Exactly. The part where the owner raises the rent and eats the profit is a horrible thought. But it made me think. Take a look at the World's 50 Best Restaurant list Top 10 [0]. 4 out of the Top 10 are located in cities that I expect the rent to be below national average. I myself have dined at Azurmendi, which currently sits at a hill top somewhere in the Basque countryside, really remote. Maybe they can afford to be remote and pay less rent because they are on this list or strive to be on there.

[0] http://www.theworlds50best.com/list/1-50-winners

I find it absurd to rate restaurants from best to less best. I prefer the michelin rating star.

That's called revenue, not profit.

That's not called revenue at all. A business with a small profit margin can be more profitable than a business with a large profit margin, not just have higher revenue (although higher revenue would be required).

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