• Ceterus

Restaurant Accounting for Franchisees

Updated: Nov 1, 2018


We know restaurant accounting and bookkeeping is tough more than anyone.

Inventory is harder in restaurants than in most small businesses, and there are many more people to manage and keep track of than in other business models. Things move fast, and doors are open for long hours.

A Few Key Restaurant Accounting Terms


There are a few things that you can focus on optimizing to keep your restaurant franchise business on track.

  • COGS (Cost of Goods Sold). This includes only the ingredients that make up the items on your menu, which is unique to restaurants.

  • Prime Cost. Prime Cost is your COGS plus your labor costs, which makes up the bulk of your expenses. Keeping an eye on Prime Cost is critical if you want to increase profitability.

  • Revenue. Revenue is simply how much money your restaurant brings in each period or month.

A great way to see if you’re on track with these financial metrics is to benchmark your restaurant franchise locations against each other if you’re a multi-unit franchise owner and to benchmark your locations and your group against your peers in your restaurant franchise. Knowing how your Prime Cost stands relative to others in your franchise will give you an idea as to whether that is an area where you can cut costs to improve profitability for your franchise group, or if you should look elsewhere, like at your revenue or operating costs to improve margins and EBITDA.

The Accounting and Benchmarked Reporting Solution for Restaurant Franchisees


That’s why we created Edge for Restaurants - a full accounting solution for restaurant franchisees. We do your accounting in the software, and you have full access to your period-based or monthly financials as well as financial benchmarks in revenue, margin, prime cost, and other expense categories so you can easily tell if you have areas where you can improve to maximize your business’s profitability.


Edge for Restaurants gives restaurant franchisees the data they need to maximize their business's profitability.

Learn more about Edge for Restaurants here.

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