10 Most Profitable Restaurant Types

With full-service restaurant profit margins averaging only 3-5%, opening an establishment in one of the more profitable niches is critical to financial success in the industry. If you’re not sure which areas have the most money-making potential, this list of the 10 most profitable restaurant types will help you make an informed decision.

Bars & Pubs

High demand for alcohol, along with its long shelf life, make bars and pubs the most profitable restaurant type. In fact, some estimates put the gross profit margin of bars as high as 80%, far above that of other foodservice operations. Even if your establishment’s primary focus isn’t alcohol, adding beer, wine, spirits and cocktails to your menu is sure to increase your money-making potential.

Pizzerias

Considering that a 15% profit margin is attainable for most pizza restaurants and up to 25% for the most successful ones, it’s clear that pizzerias are among the most profitable types of restaurants. If you want to be near the upper end of that range, small things like charging a good markup on extra toppings and promoting deals on social media can make a big difference.

Breakfast Diners

Since their menus are based on inexpensive ingredients that can be used in multiple dishes, breakfast diners can be great business ventures. To maximize profitability, build your menu around the most profitable breakfast items, such as eggs, pancakes, toast, potatoes and coffee. Also, consider staying open late if all of your competitors close early: when people get a craving for waffles and sausage at 3:00 a.m., your diner will be the obvious–and only–choice.

Cafes

As explained in an EposNow.com article, coffee shops are profitable because of the high markups on relatively inexpensive foods and beverages, especially coffee. Although many people will look far and wide for a good cup of joe, location is still key for a successful cafe. So, be sure to look for a spot near a train station or busy highway to cash in on the morning rush or next to a library or university to give students their caffeine fix while studying.

Food Truck

With minimal overhead and streamlined menus, food trucks are among the most profitable restaurant types. If you want to maximize your revenue-generating potential, focus on the most profitable food truck menu items, like gourmet burgers, artisanal pizzas and loaded fries. In addition, don’t forget to leverage social media to let your fans know where you’ll be: regular updates and engaging posts can help draw a crowd that’ll keep your customer base growing.

Fast Food

Known for speedy service and low prices, fast food restaurants are profitable due to high demand and inexpensive ingredients. Even though increases in labor costs have eaten into quick service profits in recent years, these establishments can still be great money-makers if you focus on cost-control measures, such as consolidating food suppliers, adjusting portion sizes and automating repetitive tasks.

Fast Casual

Occupying the middle ground between quick-service and sit-down, fast-casual establishments can be some of the most profitable types of restaurants because of the large customer volume. Since they’ve faced many of the same cost increases as fast food businesses, a SpotOn.com article suggests using tools such as online ordering and loyalty programs to increase fast casual profit margins.

Ghost Kitchens

By eliminating dining rooms and offering delivery or pickup only, ghost kitchens reduce their footprint–and expenses–significantly. When combined with niche menus that command high prices, this business model can be very lucrative, so it should be no surprise that ghost kitchen profit margins range from 15-25%, far above the 3-6% industry average.

Bakeries

According to POS system developer OVVI, the average bakery generates $450,000 in revenue per year and makes 5-10% in profit. While standard commercial bakeries may have margins as low as 2-3%, those that sell specialized products, such as gluten-free or vegan options, may reach 15%. If you want to maximize your business’ money-making potential, be mindful of expenses such as rent and labor, and consider offering made-to-order wedding and birthday cakes–charging a higher markup on these specialty desserts can be quite lucrative.

Vegan/Vegetarian

Although plant-based restaurants target a smaller market and use specialized ingredients, they can be very financially successful because of the loyal customer base. To make your establishment more profitable, minimize the use of expensive ingredients, such as jackfruit, cashews and avocado, and expand marketing efforts to non-vegans or vegetarians, too.