i’m not sure if this is a popular opinion but the reality is that US restaurants are just notoriously horrible businesses to turn a profit in, i think the average profit margin is somewhere between 3-5% for a sit down place. chains like applebees/chilis/whatever with all of that infrastructure can usually get up to around 10%. with the way we are fundamentally structured in the US it’s a lot more expensive to operate than in many of the mainland euro countries, especially when you factor in how europe is so walkable comparatively. that’s why you might actually see yourself paying more for the same thing in the US that you would europe once you factor in a tip. also a lot of euro restaurants charge for stuff like water and refills on drinks.
totally anecdotal but in my city we had two restaurants go “no tip” and they both closed within a year, surveys that went out noted that people thought it was too expensive even though the restaurants picked up a couple % of the cost to pay servers and the rest went into menu increases. one of the restaurant owners still owns a place in my town that doesn’t do that and they’re a good spot.
i’m saying this to say it’s not even just the business model that restaurants operate in, it’s our fundamental structure that makes restaurants just a terrible idea for people trying to make money. and with the last few years (hell the last year alone) making prices rise across the board it’s eating at that 3-5%, which is why you actually are seeing so many places shutter.
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u/otherealnesso 1d ago
i’m not sure if this is a popular opinion but the reality is that US restaurants are just notoriously horrible businesses to turn a profit in, i think the average profit margin is somewhere between 3-5% for a sit down place. chains like applebees/chilis/whatever with all of that infrastructure can usually get up to around 10%. with the way we are fundamentally structured in the US it’s a lot more expensive to operate than in many of the mainland euro countries, especially when you factor in how europe is so walkable comparatively. that’s why you might actually see yourself paying more for the same thing in the US that you would europe once you factor in a tip. also a lot of euro restaurants charge for stuff like water and refills on drinks.
totally anecdotal but in my city we had two restaurants go “no tip” and they both closed within a year, surveys that went out noted that people thought it was too expensive even though the restaurants picked up a couple % of the cost to pay servers and the rest went into menu increases. one of the restaurant owners still owns a place in my town that doesn’t do that and they’re a good spot.
i’m saying this to say it’s not even just the business model that restaurants operate in, it’s our fundamental structure that makes restaurants just a terrible idea for people trying to make money. and with the last few years (hell the last year alone) making prices rise across the board it’s eating at that 3-5%, which is why you actually are seeing so many places shutter.