Should every restaurant location have its own P&L?

Why one P&L for the group isn't enough

A group P&L tells you the total. It can't tell you that one location is carrying two others, that the newest one hasn't broken even, or that labour at one site has crept up three points. Those are the questions owners need answered, and they all need location-level numbers.

What goes on a location P&L

• Sales by channel: dine-in, takeout, delivery, catering.
• Cost of goods: food, beverage and packaging used at that location.
• Labour: the hours worked there, including people shared with other locations.
• Operating costs: rent, utilities, repairs, supplies and card fees for that site.
• Location profit: what's left before any shared overhead. Some groups call it four-wall profit.
• Shared costs: the location's share of central costs, allocated by rule.

Allocating shared costs

Office, owners' salaries, a commissary, shared managers, software and insurance all need splitting. There's no single correct method. What matters is that the rule is sensible, written down and applied the same way every period:

• By sales: simple, and fair for most overhead.
• By hours or headcount: better for shared managers and payroll services.
• By use: best for a commissary, where each location's orders can be tracked.
• By square footage: sometimes used for shared space.

Change the rule mid-year and you can't compare one period to the next. Pick one, write it down, and stick to it.

When locations are separate companies

If each location is its own company, money moving between them (a shared payroll, one company paying another's bill, a loan to fund an opening) creates intercompany balances. Track them in both companies' books, so they match and can be cleared.