Measure to Manage - 25 Most Important KPIs for All Restaurant Businesses

Whether you disliked assessments during your school life or not, as a businessman you would know that the corporate world doesn’t really provide an option.

Continuous evaluation and assessment of organizational operations is a MUST if you want your business to survive and prosper. A successful business requires its owner to be data-driven. And the restaurant industry is no exception to this rule.

Determining whether your restaurant is doing well goes much farther than your customers leaving with a satisfied appetite and giving positive reviews. Also, a busy kitchen and fully occupied tables are not sufficient in predicting that you will make higher profits and continue to excel.

The food industry is highly dynamic and vast by its very nature. Therefore, most of the top restaurateurs analyze their business performance by using several different metrics. These Key Performance Indicators (KPIs) are essential in finding out which areas in your restaurant need improvement and which areas hold promising returns.

However, did you know that there are several different KPIs in the restaurant industry besides the traditional cash flows and the cost of raw materials? In fact, there are special KPIs for different categories in a restaurant business that can help you manage the operations smoothly and make informed decisions within the right time frame.

Read on to find out what they are.

Sorted category-wise for easier tracking, following are the 25 most important KPIs for all restaurant businesses.

Category: Revenue (measured in $)

1. Revenue Per Available Seat Hour (RevPASH)

As the name suggests, this is a measure of the revenue earned by your restaurant per available seat hour.

Available seat hours mean the number of seats available during the regular hours of operation. Therefore, the higher the value of this KPI, the higher your restaurant is earning from its given seating capacity.

This helps you identify the top-selling time intervals and the effectiveness of the current seating arrangement.

RevPASH can be calculated as follows.

RevPASH = revenue earned / available seat hours

2. Revenue Per Available Square Meter (RevPAM)

Divide the total sales by the total dining area of your restaurant and you get the revenue per available square meter.

RevPAM = total sales / total dining area in square meter

A large figure of RevPAM signifies a good generation capability of the serving division in your restaurant.

3. Revenue Per Table

This KPI measures the average sales from each restaurant table on any given day.

Needless to say, that this figure should be as high as possible as it shows the capability of your restaurant to earn well.

Revenue per table = (revenue / number of tables) / number of days in the reporting period

4. Amount Of Dining

The KPI of the amount of dining speaks volumes about the customers of your restaurant and how much they generally spend. It denotes the effectiveness of deals, discounts and other combos offered by your restaurant.

Amount of dining = total revenue (including take away etc.) / number of checks or bills

Category: Service (usually expressed as a % or as a number)

5. ​Tables Served Per Waiter

This KPI signifies the average number of tables served by a waiter in a given period of time.

The appropriate value for this indicator will vary from restaurant to restaurant. Consider factors such as the total seating capacity in your restaurant, the total number of wait staff, the peak service hours, and so on in order to decide whether the workload on each waiter is justified or not.

Formula = tables served / number of waiters

6. Unavailability Of Menu Items

No one likes it when you order a dish but are denied service because the required food items are unavailable or out of stock.

Therefore, make sure that such a scenario never arises in your restaurant by using this KPI that shows the number of uncompleted orders.

Formula = number of unavailable menu items / total orders x 100

7.Time Per Table Turn

As the name suggests, time per table turn is the amount of time for which the guests normally occupy a table.

This should be usually lower because customers seated for a long time is likely to mean more talking and chatting among each other and idle occupancy for your restaurant seats.

This, in turn, also affects your RevPASH.

Use the following method to calculate this KPI.

A = number of times table I was occupied, where i ranges from 1 to n

n = number of tables occupied

B = number of turns (group of guests)

Formula = (A1 + A2 + … An) / B

8. New Menu Items

Change is constant-especially when it comes to food trends and customers’ preferences and eating habits.

Restaurateurs must adapt to the variations by continuously introducing new menu items in order to keep the customers hooked to the place. New dishes mean that people will be interested to keep coming back for more.

However, the number of new items in your menu should be within a decent range. Too little new items mean that you do not welcome innovation and are likely to fall behind in the business. On the other hand, too many new items tend to confuse the customers and will probably lead to increased costs as well.

Track this KPI by noting down the number of new food items that your restaurant introduces in a given time period.

9. Front Of House Labor

Front of house labor is a KPI that expresses the percentage of workers in your total workforce who were stationed for managing the front of house activities.

It should be within a considerable range depending on the needs of your restaurant. If too many workers are assigned the front of house operations, then other areas in your restaurant’s management might face a setback.

Formula = hours of front of house work / total work time in hours x 100

Category: Occupancy (expressed as a % or as a simple number)

10. Canceled Reservations

It goes without saying that this KPI should be as low as possible.

Regardless of the reason behind it, a canceled reservation means potential revenue that only disappeared into thin air.

Percentage of canceled reservations = (canceled reservation / total reservations) x 100

11. Reserved Tables

If your restaurant tables are frequently booked be it through a phone call or online booking, then needless to say that you occupy a prominent place in not just your local area but even beyond.

This is an indicator of such popularity that customers book a table in advance because they don’t want to face the disappointment of coming to their favorite diner only to find all the seats occupied already.

Formula = tables occupied with prior reservation / total tables occupied x 100

12. Guests per table

This is the number of guests seated per table or the number of guests who paid a certain bill.

This KPI can help you monitor the number of customers as well as the size of each group that you served. Depending on your restaurant and the type of food items that you serve, this value should fall within an acceptable range.

For instance, two people ordering a steak or paying a bill of say $100 might be a considerable sale. But ten people who only placed an order worth $50 in a five-star restaurant definitely means that a table was occupied for a long duration yet couldn’t earn a profitable amount.

Guests per table = individual guests served / bill paid

13. Foodservice Strike Rate

The food service strike rate KPI should show a higher percentage on your data records.

It is a measure of the number of times customers visit your restaurant and actually place a genuine food order.