How Much Do Chinese Restaurants Make?

No matter which city or town you go to, it’s almost always certain you’ll find a Chinese restaurant. It could be a cozy spot with hand-written specials, a bustling buffet, or a high-end take on dim sum.

If you’re thinking about opening one, you’ll want to learn about how much you can expect to earn. Let’s break down the average income of Chinese restaurants, the factors that affect profitability, and how you can forecast sales to determine your potential success. 

How much do Chinese restaurants earn?

Most Asian or Chinese restaurants earn between $5,000 and $50,000 per month in revenue. There’s a wide range because not all operate the same way.

Some are small, family-run businesses with limited seating. These are often located in suburban or small-town areas and rely mostly on local regulars.

Others are large, high-end restaurants with full bars and premium menus. These spots make their money by offering an extravagant experience, like lobster dim sum, private rooms, and curated wine lists.

These revenue ranges aren’t fixed. Chinese restaurant earnings can go up or down based on season, cost control, menu strategy, and local trends. Knowing where your restaurant fits on this spectrum is the first step toward building a more profitable operation.

Factors that affect Chinese restaurant profits

How much a Chinese restaurant makes depends on more than just how busy it looks on a Friday night. Location, staff wages, and your pricing strategy can affect profitability. The good news is that most factors are in your control, so implementing the right strategies can improve your bottom line.

1. Location

Where you set up your Chinese restaurant plays a huge role in how much revenue and profit you can bring in. Your local demographics set the tone. If you cater to mostly young professionals, you might want to offer quick meals.

Meanwhile, suburban families look for convenient dining options that cater to kids. Additionally, you can run late hours in a college town, where students are more likely to order takeout or dine late at night.

Foot traffic and accessibility matter too. A busy street corner near office hubs makes it easy to grab takeout lunches, while a strip mall with lots of parking is better for family groups.

There’s also price sensitivity. If your restaurant sits in a college area with budget-conscious students, a $10 lunch combo can fly. But in an affluent town, you may be able to charge $20 to $22 for craft dim sum or premium specialties.

Now, consider competition. If you’re the seventh Chinese spot in four blocks, it’s hard to stand out. Your profit margin will likely drop. You can set yourself apart with unique dishes and memorable experiences.

Before you start a restaurant, run a local survey. Visit nearby establishments, check social media for what people are saying, and compare prices. See what customers are already paying for lunch, whether takeout or sit-down.

Use that information to shape your menu, pricing, and hours. It’s a simple step, but it could protect your net margin and boost your owner income down the road.

2. Menu pricing strategy

For Chinese restaurants, focusing on a regional cuisine, like Sichuan hot pot or authentic Northern dim sum, can really pay off. Take a look at Xi’an Famous Foods, which started by selling food from the ancient capital of China. Last year, they bought a 20,000 square foot central kitchen in Queens, showing just how far they’ve gone from a hole-in-the-wall serving workers, and a stall in the Golden Shopping Mall in Flushing, NY.

Another strategy is to bundle meals for better value. Pairing spicy chicken with rice, soup, and a side dish encourages customers to spend more. People see it as getting more for less, even when your profit margin stays healthy.

For Chinese restaurants, try a “family feast” bundle at dinner or a “lunch combo” during the week. Customers love the convenience, and you lock in an increased spend per order.

Use your POS or feedback forms to spot high-profit items that are easy to prep. Follow menu engineering best practices to highlight them and nudge customers in the right direction.

3. Labor

While family members often help reduce staffing needs, most Chinese restaurants still rely on a mix of full-time and part-time employees. They cover prep, cooking, and service hours, especially during peak times.

Skilled chefs can also demand higher wages, especially those specializing in regional cuisines or traditional cooking techniques. These costs can add up fast.

For instance, FOH staff in Chinese restaurants earn an average of $39.64 per hour, while line cooks average $3,240 per month and managers about $4,800 per month.

For a single location, the labor cost percentage can easily range between 29% and 33%. It becomes more challenging with multiple locations or during busy seasons.

Use restaurant scheduling software to assign shifts efficiently and reduce the need for overtime. Cross-training staff can also help you manage labor costs by having employees who can work multiple roles.

4. Ingredient costs

Keeping restaurant costs in check, especially when it comes to ingredients, is key to strong restaurant profitability. The trick isn’t just buying cheap. It’s choosing dishes with high margins and optimizing how you source, portion, and sell them.

Many Chinese restaurants build their menus around dishes that are both popular and low-cost to make. Take chow mein, for example. It has one of the highest profit margins in the industry, around 80% to 90%.

The ingredients, noodles, cabbage, carrots, onions, and basic proteins, cost just $1 to $2 per serving, but the dish sells for $10 or more. That’s around $8 gross profit on a single order.

Other high-margin dishes are egg fried rice and General Tso’s chicken. These dishes are fast to prep, easy to batch-cook, and consistently popular, making them revenue drivers for many restaurants. Plus, offering custom add-ons (like shrimp or tofu) can further boost ticket size without raising costs dramatically.

The average food cost percentage is between 25% and 35%, but some restaurants manage to keep it even lower. Make sure to nurture relationships with suppliers and choose local produce for better quality.

You can also set inventory alerts to flag when costs for a dish rise above target. Additionally, track waste and train staff on portion sizes and proper storage to stop leaks in your profit stream. 

5. Operational costs

These fixed and semi-fixed expenses can quietly eat into your net margin, so you should know how to handle them with purpose. Reducing operational or overhead costs can improve your margins by as much as 12%.

First, there’s rent, which should stay between 6% and 10% of your revenue. If you’re in a prime city center, rent may go up 9% to 15%. Utilities, like electricity, gas, water, and internet, should ideally just take around 3% to 5% of your revenue.

Don’t forget recurring costs like insurance and cleaning services. Business owner’s policy ($251), general liability insurance ($141), and workers’ compensation insurance ($113) can add up to around $505 per month or approximately $6,000 annually.

Enlisting restaurant cleaning service providers costs around $85 per hour. If you want your staff to do it, you’ll still need to buy cleaning solutions. Even if you switch to cost-effective ones to reduce restaurant expenses, you’ll still need to spend $63 to $200 per month.

These might seem small, but they add up quickly. A monthly review helps you spot services that aren’t delivering value. Tally up your fixed costs (rent, insurance, software) separately from variable ones (energy, supplies).

Watch for upward trends. If rent climbs or utilities spike, it’s time to take action by negotiating lease terms or upgrading to energy-efficient appliances.

6. Tech stack and tools

The right set of tools can be a major boost to your restaurant’s profitability and reduce stress. A good POS system can help you find high-margin dishes quickly and track inventory in real-time. It costs between $60 and $250 per month for software, and around $700 (one-time) for hardware.

As mentioned, you should invest in tools that automate staff scheduling and pay calculations. Restaurant payroll software can help you avoid errors, which can cost you hundreds or thousands of dollars.

Make sure you find tools that integrate with each other. For instance, Toast and 7shifts sync payroll and sales data so you get better insights into your restaurant’s performance.

How to forecast Chinese restaurant sales

Accurate forecasting is important to maintain profitability. Tracking sales trends and breaking down revenue streams can help you make smarter decisions around labor, inventory, and promotions. 

1. Start with your sales data

Your own sales numbers are the best foundation for forecasting and improving restaurant profitability. Start by gathering at least six to 12 months of daily or weekly sales data from your POS. That gives you enough history to spot patterns and seasonal shifts.

Next, identify patterns. Look at how you perform during different parts of the day, like lunch or dinner rush, and check for dips during winter or spikes around Lunar New Year. You might see delivery demand jump on rainy days or during events.

With this history, you can break down your revenue into chunks and forecast more accurately, rather than guessing. This lets you adjust staffing, stock, and marketing strategically.

If you’re still starting out, visit local Chinese restaurants in your area and see what times customers flock to them. You can also talk to wait staff and owners to get insights into customer behavior.

2. Segment by sales channel

Tracking all your revenue together makes forecasting too vague. Split your revenue into categories like dine‑in, takeout, delivery, catering, and events. Each channel performs differently, and knowing how each one performs gives you a better idea of your earnings and profitability.

For instance, if delivery sales spike during winter months, you might want to invest more in online marketing or partner with more delivery platforms.

Additionally, if catering events are particularly lucrative for your restaurant during holiday seasons, you could create special menu packages or promotional deals to make the most of those opportunities.

3. Factor in customer traffic and average check size

Your sales come down to two simple numbers: how many customers you serve (traffic), and how much they spend each visit (ticket size). Multiply those together, and you get your total revenue.

Break it down by time of day and day of week. Track lunch rush vs. dinner service, and weekdays vs. weekends.

Let’s say your average weekday lunch customer spends $12, and you typically serve 50 customers during that time. Your lunch revenue would be $600. For dinner, you might see 75 customers spending an average of $22, totaling $1,650.

That tells you that your dinner service is significantly more profitable than lunch. Now, you can strategically adjust your operations. Consider extending dinner hours, so you can cater to more diners.

You can also create special lunch promotions to increase traffic or revamp your lunch menu to boost average ticket size. Then, check your data again to see whether the changes improved revenue.

4. Use rolling averages to smooth out spikes

Your weekly sales can be unpredictable. One event, holiday, or playoff game can skew the numbers. To avoid reacting to one-off bumps or dips, use rolling averages in your forecasting.

Take your current week’s sales and compare them to the trailing 4-week average. Also, check the 8-week average to see broader trends.

Then, compare this week not just to recent history but also to the same week last year. That adjusts for seasonality. For example, a post-holiday slowdown might look bad, unless you see that traffic always dips by 10% in early January. These insights help stabilize your forecasts.

Once a month, update your forecast model to include recent data. Add the latest 4-week and 8-week figures, and drop the oldest week. This keeps your forecast responsive to changes, like a new competitor in town or a recent menu change.

5. Account for upcoming promotions, events, and seasonality

To accurately forecast your restaurant’s revenue, plan ahead for major events and seasonal trends. For instance, Lunar New Year often brings a major pop in demand as families gather. Last year, the most popular items were egg rolls (18.23%), General Tso’s chicken (14.84%), crab rangoons (10.92%), and sweet and sour chicken (10.05%).

Even book-ended celebrations like graduation or birthday weekends in your local high schools or colleges can be predicted and staffed accordingly for private party bookings.

When you see a known spike on the horizon, like Lunar New Year or graduations, you can shift your staffing and pre-order ingredients to match. That stops overtime, prevents food shortages, and keeps the experience smooth. It also avoids overstaffing and spoilage.

Keep an annual calendar of holidays, local events, and promotions. Then tweak your forecast models each month to reflect what’s coming, so you boost service and cash flow, not stress.

Success in the right cuisine

As you start your Chinese restaurant, optimize aspects that you can control, such as your location and operational flow. Stay on top of data, so you can create strategies to maximize your business’s potential.

Spend more time cooking (literally and figuratively) and less time calculating with 7shifts. Our restaurant scheduling software helps you reduce labor cost by making sure you have the right number of people for each shift. It also keeps your team in sync with real-time updates, time-off requests, and shift swaps in a single app.

FAQ

Why are Chinese restaurants so successful?

Many Chinese restaurants offer large portions at a reasonable price, which appeals to budget-conscious families, students, and workers. Dishes like lo mein, egg rolls, and sesame chicken are popular across a wide range of age groups and cultural backgrounds. This broad appeal helps maintain steady customer traffic.

Chinese cuisine is also incredibly versatile. Restaurants can offer takeout, delivery, dine-in, catering, and even buffet formats, all of which diversify revenue streams. Many Chinese restaurants adapt their menu based on local tastes, which makes them more competitive in different markets.

Additionally, many Chinese restaurant owners take a hands-on approach, working long hours and making sure every part of the business runs smoothly. That level of involvement often leads to better quality control and customer satisfaction, both of which fuel long-term success.

How profitable are Chinese buffets?

Chinese buffets can be highly profitable, but they come with higher overhead and risk. The main advantage is volume. A buffet restaurant might serve 200 to 400 guests per day, with average ticket sizes ranging from $12 to $20 per person. That can bring in $2,400 to $8,000 in daily revenue, depending on traffic and location.

What makes them work financially is bulk cooking and controlled ingredient costs. Many buffet dishes, like fried rice, noodles, and stir-fried vegetables, have low food costs and are prepared in large batches, keeping labor efficient. Buffets also encourage upselling on drinks, which have high margins.

However, buffets require more space, equipment (like warming stations and sneeze guards), and staff to keep food fresh and safe. Rent and utility costs are typically higher, and food waste can cut into margins if not managed carefully.

Is takeout or dine-in more profitable for Chinese restaurants?

Both takeout and dine-in have their advantages, but profitability depends on how each is managed.

Takeout is often less expensive to run. It requires less space, fewer servers, and lower overhead costs. Since Chinese food travels well, dishes like orange chicken or chow mein maintain quality even after 20 to 30 minutes in transit.

Many restaurants make 60% to 70% of their revenue from takeout, especially in urban or commuter-heavy areas. You can also handle more orders per hour compared to dine-in.

However, average ticket sizes for takeout are typically lower, about $12 to $18 per order, depending on location and offerings. Delivery services can also take a 15% to 30% commission, cutting into your profit margin unless you set your prices accordingly.

Dine-in, on the other hand, can generate more revenue per guest, especially if you sell drinks, appetizers, and desserts. An average dine-in customer may spend $20 to $25, with higher tips and add-ons. The challenge is higher staffing, cleaning, and rent costs.

How do I price my Chinese restaurant menu for profitability?

Pricing your menu is one of the most important factors in running a profitable Chinese restaurant. The goal is to set prices that cover your food costs, labor, and overhead, while still feeling like a good deal to the customer.

Start with food cost percentage. Most restaurants aim to keep food costs between 25% and 35% of the menu price. If a plate of kung pao chicken costs $3 in ingredients, you should price it at $9 to $12 minimum to maintain profitability.

Next, factor in labor and operating costs. Include prep time, cooking difficulty, and portion size. Dishes that take longer or require skilled chefs (like hand-made dumplings) should be priced higher.

Then, look at your competitors. See what similar dishes cost at nearby restaurants. If you’re in a high-rent area or offering premium quality, you may need to charge more. However, you must make sure your presentation, service, or ingredients reflect that value.

Also, consider menu engineering. Highlight high-margin dishes using placement, photos, or call-outs. Bundle meals (e.g., lunch combos or family-style dinners) to increase perceived value while improving your average check size.

Don’t forget add-ons. Extra protein, sauces, or sides can significantly increase order value. For example, adding shrimp to fried rice might cost $1.50 extra in ingredients, but you can charge $4 more, giving you over 60% margin on that upsell.