Restaurant Break-Even ROAS
Break-even ROAS = 1 / contribution margin
Gather recipe sheets, supplier invoices and stock counts. Include ingredients, service labour, and facility overhead. The starting figures are examples. Replace them with your own records.
Formula and worked example
Break-even ROAS = 1 / contribution margin
| Input | Example |
|---|---|
| Contribution margin before advertising | 40 % |
| Calculated result | 2.5 × revenue / ad spend |
Choose reliable inputs
Track purchased quantities, usable yield, labour and waste before deciding on a selling price. For this restaurant calculation, use recipe sheets, supplier invoices and stock counts and a consistent definition of one cover.
- Ingredients: include the portion belonging to this cover or reporting period, and record where the value came from.
- Service labour: include the portion belonging to this cover or reporting period, and record where the value came from.
- Facility overhead: include the portion belonging to this cover or reporting period, and record where the value came from.
Use the same currency for every money input. Do not mix weekly costs with monthly revenue, or count the same expense in both an itemised cost and allocated overhead.
Why is a ROAS above one sometimes unprofitable?
Revenue must also pay delivery costs. At 40% contribution margin, 2.5 times ad spend is needed just to fund that spend.
Assumes attributable sales and a stable contribution margin; fixed costs are excluded.
What if this input changes?
If contribution margin before advertising rises by 10%, this example changes by -0.2273 × revenue / ad spend. This shows the effect of one change; it does not predict what will happen.
Open the calculator, save your baseline, then change the input supported by the least reliable estimate in your records. Compare both scenarios before committing to a price or capacity promise.