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Failure rates, margins, cost structure, delivery commissions and the NZ numbers
Short answer: the restaurant numbers most often repeated are wrong, and the real ones are more useful. Restaurants do not fail at 90% in year one (real first-year closure measurements run from under 1% to 17% depending on study and year); the industry nets 3–5% on average with bars at 10–15% and cafés nearer 2.5%; prime cost belongs under 65% of sales; delivery marketplaces take a published 15–30% that often lands at 30–40% all-in; and internal theft quietly consumes about 4% of sales in unmanaged venues. This page collects the statistics we cite across every guide on this blog, each with its source and a link to the deep dive. Bookmark it, and steal it for your business plan.

| Statistic | Figure | Source |
|---|---|---|
| First-year closures (US, 2025) | 0.9% | Datassential Sales Intelligence |
| First-year failure rate | ~17% | UC Berkeley study |
| Long-run average failure rate | ~30% | National Restaurant Association |
| Closed within five years | ~49% | Industry studies (multi-year) |
| “90% fail in year one” | Myth | Traced to an unsourced TV ad; repeatedly debunked |
The honest reading: hospitality is genuinely risky, and roughly half of venues do not see year six, but the odds are nothing like the folklore, and the failures cluster around known causes: undercapitalisation, rent set above the 8% occupancy test, and owners flying without weekly numbers. The business plan guide shows how lenders actually read these risks.
| Benchmark | Figure | Deep dive |
|---|---|---|
| Industry average net margin | 3–5% | Profit margins |
| Full service / QSR / bar / café / truck | 3–6% / 6–10% / 10–15% / ~2.5% / 6–9% | same guide |
| Food and beverage cost | 28–35% of sales | Food cost |
| Labour | 25–35% of sales | Labour |
| Prime cost target | under 65% | Prime cost |
| Occupancy target | 6–10% of sales, ideally ~8% | Lease |
| Statistic | Figure | Source |
|---|---|---|
| DoorDash commission tiers | 15% / 25% / 30% (+6% pickup) | DoorDash published plans, 2026 |
| Uber Eats tiers after March 2026 change | 20% entry (was 15%); 25% plus surcharges; 30% premium | Uber Eats fee schedule, 2026 |
| Measured all-in marketplace cost | 30–40% per order with promos and fees | Industry analyses, 2026 |
| Direct online ordering (Plattr) | from 2.5% commission | Plattr pricing |
Channel mix is the least visible margin lever in the industry: identical venues with identical sales can net wildly different profits purely on where orders arrive. The full rate breakdown and a savings calculator live in the delivery commissions guide, and the strategy in delivery strategy.
| Statistic | Figure | Deep dive |
|---|---|---|
| Small-venue valuation multiple | 1.5–2.5× owner earnings | Buying a restaurant |
| Franchise initial fee | commonly $20k–50k | Franchise maths |
| Franchise ongoing stack | 8–12% of gross (royalty + levy) | same guide |
| Retailer margin on food products | 30–50% | Wholesale |
| Distributor margin | 20–30% | same guide |
| Conventional grocery net margin | ~2.2% | industry benchmark |
| Statistic | Figure | Source |
|---|---|---|
| Internal theft, share of sales | ~4% (QSR up to ~7%) | Loss-prevention industry estimates |
| Share of shrinkage that is theft | ~75% | same |
| Gift card sales landing in holiday weeks | 40–60% of annual | Industry gift-card studies |
| Cooling window for cooked food (NZ) | 60°C to 5°C within 6 hours | MPI guidance |
| Statistic | Figure | Source |
|---|---|---|
| Adult minimum wage from 1 April 2026 | NZ$23.95/hour | MBIE |
| Starting-out and training wage | NZ$19.16/hour (80%) | MBIE |
| GST | 15% flat; registration at $60,000 rolling turnover | IRD |
| Moderate commercial fit-out (Auckland) | ~NZ$3,216/m² | JLL fit-out guide 2026 |
| Basic commercial fit-out | NZ$800–1,200/m² (+$500–1,000/m² for kitchens) | fit-out industry guides |
| Food licensing tiers | Food Control Plan or National Programmes 1–3 | MPI, Food Act 2014 |
Deep dives for each: hiring and wages, GST, opening costs, and licences.
What percentage of restaurants fail in the first year?
Far fewer than folklore says. The famous “90% fail in year one” line traces back to an unsourced TV commercial and has been debunked repeatedly: a UC Berkeley study measured about 17% first-year closures, the National Restaurant Association’s long-run average failure figure is around 30%, and Datassential measured US first-year closures at just 0.9% in 2025. Roughly half of restaurants are still trading after five years. Risky, yes; a coin-flip against you nine times over, no.
What is the average restaurant profit margin?
Industry-wide, roughly 3–5% net. By format: full-service restaurants 3–6%, quick service 6–10%, cafés around 2.5% on average with a wide spread, bars 10–15%, food trucks 6–9%. The spread inside each format is bigger than the spread between formats, which is why operators compare themselves to their own format’s band and then hunt the one cost line that explains their gap.
How much do delivery apps take from restaurants?
Published tiers run 15–30% of the order: DoorDash lists 15/25/30% plans (6% for pickup), and Uber Eats moved its entry tier from 15% to 20% in early 2026, with surcharges pushing effective rates on many orders to 30%. Once promotions, ad placements and assorted fees are counted, many venues measure a true 30–40% cost per marketplace order, which usually exceeds the entire net margin of the dish.
What should a restaurant’s prime cost be?
Under 65% of sales, with strong operators nearer 60%. Prime cost is food and beverage cost (typically 28–35% of sales) plus total labour (25–35%), and it is the single best weekly predictor of profitability because it captures the two costs management can actually move. Above 65% for more than a couple of weeks, the bottom line is almost certainly negative, whatever the till says.
How much revenue do restaurants lose to theft?
Industry loss-prevention estimates put internal theft around 4% of restaurant sales, up to about 7% in quick service, and attribute roughly 75% of inventory shrinkage to theft rather than genuine waste. Against a 3–9% net margin, that means an unmanaged venue can lose most of its profit line to shrinkage without a single dramatic incident, which is why counting stock and POS controls pay like a marketing campaign.
Where do these statistics come from?
Each figure on this page names its source in the table beside it: platform rate cards for commissions, MBIE for NZ wage rates, JLL’s 2026 fit-out guide for build costs, the UC Berkeley and Datassential studies for survival rates, and industry association estimates for margins and shrinkage. Ranges are quoted where sources vary. Statistics move; where a number is time-sensitive we date it, and the deep-dive guide linked beside each section holds the full working.
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