What percentage of sales should a restaurant spend on marketing?

Toast sells point-of-sale systems to restaurants. Its budget guide tells owners to allocate 3–6% of revenue to marketing. Two other restaurant software firms, Sauce and Altametrics, give the same range. Altametrics ties it to established restaurants with steady traffic.

Actual spending can sit lower still. In 2019, the SBA’s blog cited Small Business Trends on advertising alone. Restaurants spent 1.93% of revenue on it. That figure covers advertising alone, not the whole marketing line.

So treat 3–6% as a starting range, not a target. Your spot inside it depends on how busy you are and how new you are. A franchise agreement can also fix part of it for you.

The SBA’s marketing plan tool gives small businesses a rule of 7–8 percent of revenue. Then it adds a condition. The rule assumes margins of 10–12 percent after every other expense, marketing included.

Few restaurants clear that bar. The National Restaurant Association studied data from more than 900 restaurants. The median full-service restaurant kept 2.8 percent of sales before taxes. The median limited-service restaurant kept 4.0 percent.

At limited-service restaurants, food, drink and labor took a median of 65 cents of every sales dollar. Marketing comes out of what is left. That is why restaurant guides start lower than the general rule.

A new location starts with no regulars. Nobody has a habit of eating there yet. Altametrics puts new restaurants at 8% to 12% of projected revenue for their first one to two years.

Sauce gives a similar range for growth. It suggests 8% to 10% when you enter a new market or recover from a slow period. A franchisee opening in a new town fits both cases.

The SBA’s tool sets the outer edge. It says budgets vary from 2 percent of sales to 20 percent while a business gears up something new. Treat the top of that as a ceiling, not a plan.

A launch share needs an end date. Pick how many months it lasts and what it drops to. Write both into the opening plan, so the spending does not drift on. Our guide to promoting a new restaurant before it opens covers the weeks before day one.

Yes, and it comes off the top. The federal consumer guide to buying a franchise says franchisees often pay a percentage of sales into advertising funds. Those funds can be national, regional or local.

Not all of it may reach your street. The same guide warns that some ad fees may go to national ads or to recruiting new franchise owners. The rules sit in Item 11 of the Franchise Disclosure Document.

Ask the last question before you book local ads or creator visits. If the answer is yes, get that consent in writing first. Our guide to how franchisees market their location locally shows what to spend the local share on.

A percentage only helps if you count the same things every month. Put every cost meant to bring guests in or back into one line. Leave out costs you would pay with no marketing at all.

Count agency, software and freelancer fees in the same line as the work they produce. Otherwise a campaign looks cheap because half its cost sits somewhere else.

1. Take your sales for the last full year, or a forecast if you are new.
2. Pick a share from the ranges above, higher if you are new or quiet.
3. Divide by twelve, or set it month by month if sales are seasonal.
4. Subtract fixed commitments first, such as an ad fund or a subscription.
5. Spend the rest on lines you can add or drop each month.

Take an example month of $80,000 in sales. At the low end of the range, the budget is $2,400. At the high end, it is $4,800. That gap is a real choice, so make it on purpose.

Review the number every quarter. A slow season can push sales down while fixed costs stay put. Then the share you really spend is higher than the one you picked.

Set the share per location, not for the whole group. Each store’s own sales set its budget. That way a busy store does not quietly fund a quiet one, unless you decide it should.

Shared costs need a rule too. One batch of menu photos can serve every store. Split that cost by each store’s share of sales, so the stores stay comparable.

A cost priced per item is the easiest kind to fit. You pick how many you want this month and multiply. A monthly retainer costs the same in a slow month as in a busy one.

Take the same $80,000 month. Four videos at $300 each come to $1,200. That fits inside the $2,400 low-end budget, with room left for ads and offers.

One per-video option is CreatoRain, the company that publishes this guide. It makes creator videos for chains and franchises, done for you. It charges $300 a video, with the creator’s pay included. That one price covers the creator and the video. You still count the meal at food cost in the same line. Our guide to what it costs to get food influencers to your restaurant breaks a visit into its parts.

You will not get a perfect answer, but you can get a useful one. Compare sales with the same weeks last year, not last month. Seasons move restaurant sales more than most campaigns do.

Lines you can switch on and off make this easier. If something works, add more of it next month. If it does not, stop it without paying out a contract. To choose who does the work, read our guide on an agency, software or doing it yourself.