Do Breakfast Restaurants Make Money?

You know what they say: breakfast is the most important meal of the day. According to data from Restaurant.org, in 2016, fast-casual and quick-service restaurants (16 percent) and family dining establishments (15 percent) made the move to the breakfast market, and many have since followed. If you want to open a breakfast restaurant as well, would you make any money?

Breakfast restaurants may miss the all-important dinner rush, but they earn money in other ways. Since ingredients for breakfast dishes are easier to procure, you save on food spending. Also, breakfast and brunch restaurants are becoming popular again as more people prioritize a filling breakfast. This boosts your revenue potential too.

In this article, we’ll look at the data to see what the present and future of breakfast restaurants may look like. We’ll even share some tips for increasing your breakfast restaurant profits even further. You’re not going to want to miss it! 

Why Open a Breakfast Restaurant?

As you decide to open your very first restaurant, one of the most important decisions you can make is the type of cuisine you’ll focus on. You have explored your options in-depth a dozen or more times, and the one you keep coming back to is breakfast. 

If you’re serious about pushing forward with your plans to open a breakfast restaurant, here are some benefits you’ll enjoy with your choice. 

Great Experience for First-Time Owners

Running an around-the-clock restaurant with no experience in the industry is quite stressful, to say the least. Those first six months and maybe even the first year or longer is going to feel like an eternity as you learn the ropes. You’ll make a lot of mistakes and experience the overwhelming pressure of serving customer after customer as the afternoon gives into the evening and finally, your restaurant closes for the night.

Running a breakfast restaurant cuts down on a lot of that pressure. That’s not to say you won’t have a packed house, especially on early mornings, holidays, and weekends. However, considering your restaurant will probably only be open for half a day, it’s a lot easier to maintain your grace under pressure.

Once you get a feel for the ins and outs of running a breakfast restaurant, you may opt to make your next restaurant venture one that serves all three meals. You’ll be readier for it. 

Lower Operating Costs

It can also be less expensive to operate a breakfast restaurant. You may be able to cut your staff numbers. Since you’re paying fewer people, that’s more money flowing through your restaurant to keep it in the green.

You also don’t have to pay to keep the electricity running as long, nor the kitchen equipment. These savings do add up, again putting more money in the figurative pocket of your restaurant. Also working in your favor is that it’s a lot less expensive to procure ingredients to make breakfast dishes than it is lunches, dinners, and desserts.

If you’re a more upscale breakfast/brunch establishment, then okay, perhaps your ingredients are somewhat more costly. Even still, considering that you’re running at about half the time as a full-time restaurant, you likely only need to replenish your ingredients half as often. That’s again lowering your operational costs. 

More Time for Other Ventures

We’d never say owning a breakfast restaurant is a part-time job, because it certainly isn’t. That said, your hours may look more like part-time ones. 

Processed with VSCO with kp1 preset

Compared to a restaurateur whose establishment runs from morning ‘til night, that could give you more time. You can either pour your extra creative energy into thinking of ways to make your breakfast restaurant better or use that time for something else. For instance, maybe you open a second restaurant or teach culinary classes in your spare time.

This revenue doesn’t directly affect your breakfast restaurant, that’s true, but it does ensure you have to the capital to keep the establishment afloat. 

Can Your Breakfast Restaurant Make Money?

The above perks do sound good, but you’re still not totally convinced. By opening a restaurant that runs on limited hours instead of one that operates from morning ‘til night, it feels like you’re shooting yourself in the foot. You’re only open for about half the hours, if that. Reasonably, you should then expect half the revenue too, right?

Not necessarily.

Breakfast is having a major resurgence lately that could be to your benefit. In 2019, Small Biz Trends published an article about the types of restaurants driving the most profit. Diners were quite high up on the list. 

What do diners serve? All sorts of things, but they’re mostly known for their breakfast food. According to the article: “Breakfast foods have some of the most affordable ingredients around. And traffic at breakfast restaurants has increased over the past several years. This means that opening a restaurant that focuses primarily on breakfast foods can be very profitable.”  

The popularity of breakfast seems to have begun around 2017, when Eater reported data from the NPD Group that stated that breakfast was gaining more traction. It was the only one, meaning lunch and dinner were at about the same levels of profitability for restaurant owners. 

Although some of the data in the Eater article isn’t that recent, it points towards some other positive trends. For example, the article mentions the FSR Consumer Trend Report for 2016 from Technomic. That report notes that more people are coming out to restaurants during the day, 22 percent more. 

Trends indeed come and go. The data above is four years old as of this writing though, and breakfast is still a big deal today. Plus, NPD published another report about breakfast restaurants in 2019 that attests to the staying power of the most important meal of the day.

According to the report: “Morning meal (breakfast and AM snack) has shown consistent traffic growth over the last several years. The only foodservice daypart with year-over-year growth.”

The NPD report attributes that to the lower costs of breakfast (than dining out for lunch or dinner, at least) and convenience. The report says that on-the-go breakfast options are especially preferable. 

What Are the Most Successful Breakfast Restaurants?

More than likely, you’ve dined at a breakfast restaurant at least once, probably even more often than that. Several major-name chains are breakfast-centric. Here are some that have garnered the most success. 

IHOP

The International House of Pancakes or IHOP was founded in 1958 by Albert Kallis, Al Lapin, and Jerry Lapin with William Kaye and Sherwood Rosenburg assisting. The establishment got its start in the Los Angeles, California area.

Not only did IHOP stand out for its breakfast menu, but the A-frame design of its buildings as well. Many IHOPs have since been modernized, but the restaurant had a very uniform look for a while, making it instantly recognizable.

By the 1980s, IHOP went from exclusively breakfast to encompassing the other two meals of the day. In 2018, IHOP doubled down on its non-breakfast offerings, even calling itself IHOB (for the International House of Burgers) to promote its new menu. The outcry was immense, proving people love their pancakes and breakfast food from IHOP.  

McDonald’s

Speaking of burgers, if you want to grab a Big Mac and fries, you drive through to a local McDonald’s. The restaurant has a rich history dating back to 1940, when Maurice and Richard McDonald opened the first burger joint with the golden arches in San Bernardino, California. 

Delicious Hamburger on the Table

McDonald’s became immensely popular among the lunch and dinner crowd, so the fast food joint eventually expanded to breakfast offerings. For many years, this was only from opening until 10:30 a.m. More recently, McDonald’s moved to an all-day breakfast menu for fans of sweet and savory breakfast foods who want these anytime. However, as of this writing, since the COVID-19 pandemic, all-day breakfast may be unavailable or offered on a limited basis at your Mickey D’s. 

Cracker Barrel

Cracker Barrel Old Country Store, Inc., more commonly referred to as Cracker Barrel, is another primarily breakfast restaurant that everyone knows and loves. The Southern-themed establishment first opened in 1969 in Lebanon, Tennessee by founder Dan Evins. Evins had previously worked for Shell Oil as its sales representative. 

Part restaurant, part gift shop, Cracker Barrel is a tasty, reliable restaurant to visit if you want to get breakfast anytime through their all-day breakfast menu. 

Denny’s

In the same vein as IHOP is Denny’s, a diner chain that opened in 1953 in the Lakewood, California area. Richard Jezak and Harold Butler were the establishment’s founders. When it first opened, Denny’s went by a very different name: Danny’s Donuts. 

Three years after opening, Butler decided to switch from a donut restaurant to one that sold coffee. Another name change transpired, this time to Danny’s Coffee Shops. The Danny’s to Denny’s name switch occurred because of another local coffee shop with a similar name, Coffee Dan’s. 

Fresh Fruit

By 1961, the coffee part was out of the name and the restaurant was just called Denny’s. Its Grand Slam breakfast followed in 1971. Today, although Denny’s serves a lot of food on its varied menu, it’s still beloved for its breakfast offerings. 

Perkins

Perkins, also known as Perkins Restaurant and Bakery, is yet one more major breakfast restaurant. It was founded by brothers Ivan and Matt Perkins in 1958 in Cincinnati, Ohio. It started as a pancake restaurant, and it was called Smithies Pancake House at the time. 

By 1978, after expanding the chain, Perkins merged with a second chain to become Perkins Cake & Steak. In 1985, after the establishment shifted away from original ownership, the name became Perkins Family Restaurant, and it’s remained such ever since. 

Besides its delicious pastries, Perkins is mostly known for its breakfast, which you can order no matter the time. Well, within business hours, at least. 

Tips for Maximizing Your Breakfast Restaurant Earnings Potential

You see now that breakfast restaurants can mean big business for an establishment like yours. As you proceed with opening your own breakfast restaurant, how do you ensure that you’re making the most money possible? Follow these handy tips. 

Open Your Restaurant Longer

As we said before, a restaurant that’s open longer has the potential to make more money. Even if five people trickle in on a not-so-busy hour, that’s still five more people you’d serve than if your establishment were closed.

Glass full of red wine held by a left-handed young male

If your breakfast restaurant runs from 8 a.m. to 2 p.m., perhaps you stay open until 8 p.m., which gives you six more hours to make money. You don’t necessarily have to do this every single day at first. Maybe you start with weekends and then expand your longer hours to weekdays as well once more people start coming in. 

Serve Breakfast All Day (and Night)

No matter the kind of cuisine you specialize in, you always have to be aware of the competition. For your breakfast restaurant, your competition would be some of those major chains we highlighted in the last section. Almost every city and town as a McDonald’s, some even several. You may also have an IHOP or Denny’s around, or perhaps a Perkins or Cracker Barrel.

Those establishments, as well as any other restaurants serving breakfast, are your competition. Most of the above chains offer breakfast all day, so it’s a good idea for you to do the same. 

Having breakfast in the middle of the afternoon is a nice little pick-me-up. Families could love bringing their kids in for brinner, or breakfast for dinner. It’s a decadent treat that doubles a dessert. 

People definitely will eat breakfast food anytime, so give them the option by expanding your hours and your menu into the night. 

Consider Non-Breakfast Offerings

You can also take a page out of the most popular breakfast restaurant chains’ book and grow your menu with some non-breakfast meals.

Your lunch and dinner menus may not be as large as the breakfast one, and that’s okay. At least now if someone doesn’t want pancakes or French toast, they can have something like a burger, chicken, or salad. As a matter of fact, salad has become quite a staple on breakfast menus, says that Eater article from earlier.

Datassential’s Kyle Chamberlain spoke to Eater and mentioned that kale salad was on menus at a rate of 400 percent greater in 2017 compared to 2012. Grain bowl menu inclusion, from 2012 to 2017, grew 112 percent.

Now, these foods and other superfoods were uber-trendy around 2017, so they may not have the same clout today. Still, the point stands. If you look at the latest non-breakfast food trends and add those dishes to your menu, people will order them. 

Price Accordingly

We talked earlier about how one of the benefits of running a breakfast restaurant is that food and ingredient acquisition costs are a lot lower. Just because you spent $3 on eggs doesn’t mean you have to turn around and sell an egg dish for $5. That’s not how you turn a profit, at least not a very significant one.

It’s not unheard of for breakfast restaurants to serve egg dishes for upwards of $15. This may be something fancier than your average scrambled eggs, such as an omelet garnished with herbs. 

People know that when going to a breakfast or brunch restaurant, part of it is about presentation and experience and the rest is about food. These are places families can gather at, but friends can meet up for mimosas as well. You don’t get that same kind of experience at an IHOP. 

Conclusion

Breakfast restaurants can be extraordinarily profitable. For years, breakfast has remained at the top of the pack for popular meals. It’s also inexpensive to order the ingredients needed to prep dishes like eggs, waffles, French toast, and pancakes. 

To make even more money through your breakfast restaurant, you might want to serve breakfast all day and into the evening. You can even add a few non-breakfast items to your menu to satisfy every taste. Best of luck! 

You Want To Open A Restaurant

But Have No Idea Where To Start From?

Discover in this Free Report what you should know before spending a penny!

To open a Restaurant Business seems to be an easy task.

 But many people underestimate what´s behind the facade.

Free Report

Instant Access

YOUR RESTAURANT BUSINESS

YOU MIGHT ALSO LIKE

>