Margin
Example: When a lender tells a neighborhood diner its "margin looks thin," the owner asks which one, because gross margin after food cost can read healthy while operating margin after rent and payroll on the same plate tells a much tighter story.
sales minus costs; several kinds
Sales minus costs. Gross margin = sales − food cost. Contribution margin = sales − variable costs (food + hourly labor + card fees). Operating margin = sales − (food + labor + fixed costs). The word alone is ambiguous — always ask which margin.
Why it matters
Consultants, lenders, and vendors use "margin" loosely. Knowing which one is on the table in a specific conversation prevents you from agreeing to a number that sounds right but refers to a different line. When Margin Math says "contribution per cover," it means gross margin minus variable costs, which is the right input for break-even math — not operating margin.
Frequently asked
What is margin?
Margin is sales minus costs. Gross margin = sales − food cost. Contribution margin = sales − variable costs (food + hourly labor + card fees). Operating margin = sales − (food + labor + fixed costs). The word alone is ambiguous — always ask which margin.
Why does margin matter for a restaurant?
Consultants, lenders, and vendors use "margin" loosely. Knowing which one is on the table in a specific conversation prevents you from agreeing to a number that sounds right but refers to a different line. When Margin Math says "contribution per cover," it means gross margin minus variable costs, which is the right input for break-even math — not operating margin.
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