Question

The author discusses the fact that the average restaurant has 5 percent profit margin to illustrate that

Answer 1

The rest has to pay for rent, advertising, utilities, maintenance, equipment, etc. A really good restaurant might be able to keep payroll and cost of goods down to a total of 55–60%, but most hover in the low 60’s. The average profit margin for these restaurants will be 3–5%. (A really well managed restaurant might be able to eek out 10%, but they are definitely not average.)