What are restaurant fixed costs?

A fixed cost is a cost that does not change with the activity of the company. A restaurant's fixed costs include rent, utilities, labor, and food costs. They are only dependent on how much business the restaurant has and not how much profit it makes. Fixed costs also include any other expenses that do not change with the amount of business a restaurant does. Restaurant fixed costs are important because they help determine how profitable a restaurant will be and whether or not it will stay in operation for an extended period of time. The higher these fixed costs are for a particular restaurant, the less likely the restaurant is to be profitable or stay in business long-term.