Fixed Costs
Expenses that remain constant regardless of sales volume, including rent, insurance, management salaries, and equipment depreciation.
Related Terms
Variable Costs
Expenses that fluctuate with sales volume, primarily food costs, hourly labor, and packaging. Expressed as a percentage of sales.
Break-Even Analysis
Calculation of the sales volume required to cover all fixed and variable costs, the point at which a restaurant becomes profitable.
Occupancy Costs
Total real estate expenses including rent, property taxes, insurance, and common area maintenance (CAM) charges. Typically 6-10% of sales in QSR.
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