GGB Operating profit
What remains after COGS, labour and operating expenses. The number the whole operating system exists to defend.
Operating profit is revenue minus cost of goods, labour and all operating expenses, before financing and owner drawings. It is the truest recurring measure of whether the restaurant works as a business. Healthy percentages vary by concept and lease, which is why it is managed through its components: prime cost first, occupancy second.
Operating profit = revenue - COGS - labour - operating expenses
Exclude loan interest, depreciation policy choices and owner drawings to see the operation itself.
Illustrative: revenue of AED 180,000 with prime cost at AED 108,000 (60%) and other operating costs at AED 54,000 (30%) leaves AED 18,000 of operating profit, 10% of revenue. Two points off prime cost is AED 3,600, lifting profit to AED 21,600, a 20% jump.
See where your margin sits