What is a good EBITDA margin for a small business?

Most healthy small businesses run an EBITDA margin between 10% and 20%. Service businesses and SaaS often run higher (20–35%+), while restaurants and retail typically run 10–15%. CFO Grade compares your EBITDA margin to industry-specific benchmarks across 16 sectors.

What DSCR do lenders look for?

Most SBA and commercial lenders require a Debt Service Coverage Ratio (DSCR) of at least 1.25x. Construction surety bonds often require 1.5x or higher. A DSCR below 1.0x means your EBITDA does not cover your annual debt payments.

How does CFO Grade calculate the letter grade?

CFO Grade scores 24+ financial ratios across profitability, liquidity, leverage, and efficiency — weighted by industry. The composite score maps to a letter grade from A+ to F. The full methodology and benchmark sources are described in the report and the disclaimer page.

Yes. The full analysis, 24+ ratios, letter grade, and industry benchmarks are completely free with no signup. Optional paid features include a $9 PDF export and a $19 Pro Pass with AI-generated CFO memo and 30 days of unlimited PDFs.

Do I need to create an account?

No account is required. Your numbers stay on your device unless you explicitly opt in to anonymized peer benchmarking. Pro entitlements are bound to your device with a restore link you can email yourself.

Is CFO Grade financial advice?

No. CFO Grade provides educational insights for business owners and analysts. It is not financial, tax, legal, or investment advice. Always verify the output with a qualified professional before making business decisions.

How does CFO Grade estimate what my business is worth?

Every report includes an Enterprise Value range built from your industry's typical EV/EBITDA multiple applied to your EBITDA, adjusted for size (Duff & Phelps size-discount methodology) and quality (your CFO Grade). The paid report unlocks the lender view vs. buyer view breakdown, implied equity to owners, sensitivity analysis, and full source-cited methodology. The dedicated valuation calculator lives at /valuation with industry-specific pages for 11 sectors.

Why does my business valuation change when I rerun the report?

The range moves with three things: your EBITDA (the biggest driver), your revenue size band (which sets the size discount), and your CFO Grade quality factor. When you run a second report in a later period, the Enterprise Value delta is shown prominently — 'You built $220,000 of value since Q3' or 'You lost $180,000 this quarter' — so you can watch the number that actually matters to lenders and buyers over time.

Benchmark · Restaurants & food service

What's a healthy EBITDA margin for restaurants & food service?

Short answer

For restaurants & food service, a healthy EBITDA margin is around 10–15%. Below the low end and you're subsidising the customer; above the high end and you're likely mispricing.

Real peer data

Community median publishes once we have 5+ anonymous submissions from restaurants & food service. Currently at 0. Run your numbers below to help build it — your ratios are shared, your business name and dollar amounts are not.

Formula

EBITDA Margin (%) = EBITDA / Revenue × 100

Take EBITDA (operating cash earnings), divide by revenue, multiply by 100.

Why EBITDA margin matters for restaurants & food service

EBITDA margin lets you compare businesses across sizes and industries. A 5% EBITDA margin on a grocery store is healthy; a 5% EBITDA margin on a SaaS company is alarming. CFO Grade scores it against industry-specific medians.

EBITDA margin is where cost of goods, pricing, and operating leverage meet. For restaurants & food service, small changes here compound — a 2-point improvement typically doubles owner take-home over a year.

EBITDA Margin across other industries

Professional services15–25%Healthcare practice20–35%Manufacturing10–18%Transportation & logistics12–20%Hospitality & lodging20–35%

Common questions about EBITDA margin for restaurants & food service

What is a good EBITDA margin for restaurants & food service?+

For restaurants & food service, a healthy EBITDA margin is around 10–15%. The exact number depends on scale, region, and business model, but this is the range most banks, acquirers, and industry consultants treat as "healthy."

How is EBITDA Margin calculated?+

Take EBITDA (operating cash earnings), divide by revenue, multiply by 100.

Why does EBITDA margin matter more for restaurants & food service?+

Below this range, you're typically not generating enough profit per dollar of revenue to reinvest in growth, pay owners fairly, or weather a bad quarter.

What's the fastest way to improve my EBITDA margin?+

Run your numbers through CFO Grade — the free memo pinpoints the two or three levers that move EBITDA margin fastest for a business your size, in your industry. Common fixes for restaurants & food service include pricing reviews, menu / SKU rationalization, and cutting the bottom 15% of unprofitable products or customers..

See your EBITDA margin — graded against restaurants & food service peers.

Paste your P&L. CFO Grade computes this — plus 23 other ratios — in seconds, with the restaurants & food service benchmark already loaded.

Other restaurants & food service benchmarks

Food Cost Percentage (Restaurants)

Target: 28–32%

Labor Cost Percentage (Restaurants & Services)

Target: 28–35%

Prime Cost (Restaurants)

Target: ≤ 60%

All benchmarks for this industry

Restaurants & food service financial health hub

Every metric that matters for restaurants & food service — margins, coverage, efficiency — with plain-English explanations.

Open hub