Industry Description
The Full-Service Restaurant industry consists of establishments primarily engaged in providing food services to patrons who order and are served while seated (i.e., waiter/waitress service) and pay after eating. These establishments may provide this type of food service to patrons in combination with selling alcoholic beverages, providing carryout services, or presenting live nontheatrical entertainment (NAICS 722511).
The following are some basic characteristics of the of the industry:
- Total U.S. restaurant and foodservice sales (all segments, not full-service alone) are projected at $1.55 trillion for 2026, up from about $1.4 trillion in 2025. The National Restaurant Association (NRA) projects real sales growth of just 1.3%, so most of the growth is price inflation.
- The Census Bureau’s data shows about 257,000 full-service establishments employing about 5.2 million people.
Industry Trends
Full-Service Restaurants are a fully mature industry, and most U.S. markets are saturated. This means (i) thin margins, because price-based competition is common to attract customers, and (ii) restaurants must compete intensively for high-profile locations. For future growth, many larger companies are looking to foreign markets for expansion opportunities.
Before the pandemic, Full-Service Restaurants generally experienced rising revenue as per capita income increased. During the pandemic, revenue fell sharply as closures, stay-at-home orders, and mask mandates made operations impractical. Many restaurants pivoted to takeout and delivery, some with outdoor space began reduced operations, and others laid off employees to cut costs.
The industry has since recovered in nominal terms. The National Restaurant Association projects total restaurant and foodservice sales of $1.55 trillion in 2026, up from about $1.4 trillion in 2025. However, the Association forecasts real, inflation-adjusted growth of only 1.3%, so much of the growth reflects higher menu prices rather than higher volume.
Current conditions facing Full-Service Restaurants include the following:
- Margin pressure. A cooling labor market, persistent cost pressures, and cautious household spending continue to challenge operator margins
- Soft traffic and value competition. Circana anticipates less than 1% traffic growth in 2026, and consumers may trade down from casual dining to quick-service restaurants. In response, many casual dining chains are competing at a price point of roughly $10 to $12, taking share from quick-service brands. Prices at full-service restaurants have also risen faster than at limited-service restaurants: full-service meal prices rose 4.6%, compared with 3.2% for limited-service meals
- Food costs and tariffs. Beef is the principal pressure point. In 2025, 82% of operators reported higher food costs, and 68% said tariffs drove those costs higher. Texas Roadhouse and First Watch have both cited beef costs as a drag on margins
- Labor. The acute shortage of the Great Resignation period has given way to a retention and cost challenge. Full-service employment was still 174,000 jobs, or 3.3%, below its pre-pandemic level as of May 2026. At the same time, several casual chains, including BJ’s Restaurants, The Cheesecake Factory and LongHorn Steakhouse, have reported improved turnover
- Performance is diverging across concepts. Large operators with strong value positioning continue to grow, while others struggle. Darden’s fiscal first quarter ended August 30, 2026 showed sales up 5.1% to $3.2 billion and same-restaurant sales up 3.1%, but net income fell to $233.4 million. Management cited consumer food-safety concerns and the World Cup as short-term drags on sales. Analysts expect Cracker Barrel to see negative revenue growth, falling same-store sales, and near-zero profitability, while First Watch is expected to grow revenue about 13%, driven mainly by new units
- Technology and off-premise sales. Operators are increasingly investing in technology to improve efficiency, including AI-assisted labor scheduling and handheld point-of-sale systems. Off-premise revenue (delivery, takeout) now reaches 30% to 40% of sales at well-run concepts
Going forward, full-service restaurants should see continued nominal sales growth, but profitability will depend on managing food and labor costs while keeping prices competitive against quick-service alternatives. Companies with scale, strong value perception, and low employee turnover are best positioned.
Key Performance Metrics
In evaluating an Full-Service Restaurants , the following metrics can provide useful information in comparing a subject company to guideline companies and transactions:
- Food/Liquor Costs – wisdom is these should be approximately 33% of revenue
- Labor Costs – another 33% or revenue
- Rent Costs – somewhere less than 10% of revenue
- Break-even point
- Historic sales by day, week, month and year
- Employee Turnover
- Sales per Labor Hour
- Sales per Square Foot
- Server Benchmarks
Industry Organizations & Publications
The following organizations publish useful information:
- National Restaurant Association
- Restaurant News Resource
- Nation’s Restaurant News
Guideline Information: Private Purchase Transactions
Most Full-Service Restaurants are privately owned. While there are publicly traded companies, data regarding the sale of 100% of closely-held Full-Service Restaurants is generally the best source of information to appraise a subject company. However, because there are so many, the multiples are generally too variable to be meaningfully applied without further analysis.
The following are typical appraisal multiples from sale of full-service restaurants:
- Revenue multiples between 0.14 and 0.60 times
- Gross Profit multiples between 0.21 and 1.0 times
- EBITDA multiples between 0.9 and 10.8 times
In selecting guideline transactions, it is of critical importance to select transactions that are similar to the subject company. Unique factors for any subject company must be considered to yield credible results. Additionally, industry economic conditions also vary over time, which must also be considered.
Guideline Information: Publicly Traded Companies
The five largest publicly traded full-service restaurant companies by market capitalization (mid-September 2026) are:
- Darden Restaurants (DRI): about $23 billion.
- Texas Roadhouse (TXRH): about $11.2 billion.
- Brinker International (EAT): about $8.8 billion.
- The Cheesecake Factory (CAKE): about $4.8 billion.
- Cracker Barrel (CBRL): about $1.3 billion.
The Price-to-Earnings ratios of these five companies range between 17.2 times to 29.2 times.
Appraisal Rules of Thumb
Please note: you should never use a Rule of Thumb in place of a professional appraisal. You will never see a competent professional appraiser do their work using a Rule of Thumb. The professional standards that govern professional appraisal practice, which all professional appraisers should follow, specifically prohibit the use of Rules of Thumb.
Full-Service Restaurants are businesses sold based on sound economics. These economic considerations can be measured using the key performance indicators described above, but such economics cannot be accurately summarized in these simple formulae.