These past few years, with no real argument, weighed differently on independents than they did larger chains. Operators weren’t going public, tapping credit lines to boost liquidity, or any of the other levers of scale that come with having 1,000 units versus one. The National Restaurant Association noted earlier the average restaurant had about eight weeks of cash on hand. So the notion of closing for four, five, six straight months provided a murky road, to put it lightly, during the depths of COVID. It was also why closing, reopening, closing, and repeating that cycle was so daunting considering the cost of inventory, staffing, past-due rent, and other complications that couldn’t be covered by a wider balance sheet.
Similarly, it’s difficult, if not foolhardy, to compare dynamics through more recent realities. TouchBistro, in its 2025 State of Restaurants Report, labeled this past year “out of the ordinary” for the independent full-service segment. With inflation high, spending on non-essentials low, and economic uncertainty looming, 2024 was certainly not your average stretch, the company said. Many operators fought to keep food and labor costs under control (more on that here) while also working to serve a customer carrying higher expectations to the table given how much they’re forking up to dine out.
However, all this isn’t to spin a negative cloud. Those factors, TouchBistro said, enabled full-service independents to deliver in a fashion that resonated with wary diners. Put differently, it gave them a chance to win from a smaller pool of occasions of discerning customers.
Despite back-office struggles, full-serves reported an increase in traffic and profit margins from the year prior. “Indeed, the [full-service] category proved to be a bit of a bright spot,” TouchBistro said, “while many QSR brands—particularly those that built a reputation on value that they could no longer sustain—struggled.”
Essentially, with price gaps blurred, and customers dining out less often, some prioritized restaurants that offered a full-service dining experience, even if it came with a higher price tag. A tag, as casual chains like Chili’s have had success marketing around, not all that different than what fast casual or even QSR brands are coming in at. If anything, it gave independents a chance to clarify “value” through more avenues.
TouchBistro’s report examined how full-service operators made the most of this “out of the ordinary” arena last year and what’s ahead. Can independents build on steadying sales while simultaneously working to keep expenses in check?
Starting with finances
Nearly a third of operators in TouchBistro’s survey (600-plus independent full-service restaurant owners, presidents, and area/general managers across all 50 states), said they observed a “significant” increase in traffic from 2023, while 58 percent reported a “slight” increase.
The most traffic came on Sundays, on average. And while there have been whispers of a new era for earlier dinner times, TouchBistro said, restaurants still appear busy during the late supper or “reverse happy hour” slot of 8–10 p.m. on Saturdays and Sundays. The earlier window (6–8 p.m.) was more popular during weekdays.
The traffic uptick, coupled with growing off-premises sales, translated into a profit bump. Average profit margins rose from 9.3 percent in 2023 to 9.8 percent. Although still down compared to 2021 and 2022, data suggests temporarily ceding a portion of profit margins to get consumers through the door pans out. Carrots like strategic LTOs or strong value.
Restaurant traffic, year-over-year
- Slightly increased: 58 percent
- Significantly increased: 30 percent
- Stayed about the same: 11 percent
- Slightly decreased: 1 percent
- Significantly decreased: 1 percent
Average profit margins by year
- 2024: 9.8 percent
- 2023: 9.3 percent
- 2022: 10.6 percent
- 2021: 10.2 percent
Most consistently busy days
- Monday: 5 percent
- Tuesday: 5 percent
- Wednesday: 6 percent
- Thursday: 5 percent
- Friday: 6 percent
- Saturday: 10 percent
- Sunday: 15 percent
Busiest days during the evening period (6–7:59 p.m.)
- Monday: 12 percent
- Tuesday: 11 percent
- Wednesday: 19 percent
- Thursday: 17 percent
- Friday: 17 percent
- Saturday: 15 percent
- Sunday: 14 percent
Busiest days during the late evening period (8–9:59 p.m.)
- Monday: 9 percent
- Tuesday: 13 percent
- Wednesday: 13 percent
- Thursday: 14 percent
- Friday: 14 percent
- Saturday: 17 percent
- Sunday: 17 percent
A GM from a bistro in NYC shared their belief work-from-home schedules have altered dining patterns. The old Monday to Friday lunch or happy hour crowds shifted since not everybody goes into the office. Monday and Fridays were down at their restaurant “significantly” because people clocking hybrid were heading in Tuesdays, Wednesdays, and Thursdays.
As noted earlier, even with finances sloping upward, rising costs have left little room on the margin front. More than a quarter (26 percent) of operators polled said food costs were their biggest source of financial strain in 2024. Eighteen percent added higher food costs were the No. 1 obstacle to growth. To keep things in line, 40 percent said they’ve sought new, less expensive suppliers and 39 percent tried to reduce food waste.
It also appears using price as a counter has bumped its wall. Only 25 percent of operators said they raised menu prices to increase revenue in 2024, and 29 percent implemented service charges. Instead, restaurants tried to balance costs by adding catering, investing in marketing, and changing tech providers.
The top three obstacles to growth from the data: food costs, attracting new customers, and economic uncertainty.
Here were the steps operators took to cut expenses:
- Finding new, less expensive suppliers: 40 percent
- Reducing food waste: 38 percent
- Eliminating certain menu items/inventory: 32 percent
- Limiting promotions/specials: 31 percent
- Swapping more expensive ingredients for less expensive substitutes: 30 percent
And these were the efforts taken to increase revenue:
- Adding new sales channels (catering, events, etc.): 37 percent
- Investing more in marketing efforts: 34 percent
- Adding more modifications/add-on options for an extra charge: 34 percent
- Introducing new technologies or changing existing technology providers: 34 percent
- Expanding seating capacity (adding patio space and so forth): 30 percent
Seventy-eight percent of full-service independent operators reported carrying some debt. The average of which was $51,040.
Many said they tackled expenses with loans or other types of financing. A lofty 42 percent said they took out loans in the past six months. That 78 percent figure overall was materially higher than last year’s 68 percent—a sign, TouchBistro said, cash flow could be an issue for many independents going into 2025.
Bank loans were the most common form of financing (45 percent), followed by a business line of credit (30 percent). Nineteen percent also reported accessing loans from a tech provider, which hinted operators were fairly comfortable working with less traditional lenders. Or, in the least, they’re seeking alternative means to funds (interest rates might be playing a role in creative sourcing).
And while the average figure of debt independents reported stayed relatively unchanged (it was $51,863 in 2023) the number of operators saddled with $30,000–$70,000 rose 11 percent from last year.
Type of loan or financing taken out in the past six months
- Bank loan: 45 percent
- Business line of credit: 30 percent
- Small Business Administration loan: 27 percent
- Loan from friends and/or family: 23 percent
- Equipment financing: 20 percent
- Purchase order financing: 20 percent
- Investor financing: 20 percent
- Loan from a tech service provider (like a POS): 19 percent
- Merchant cash advance: 16 percent
- Commercial real estate loan: 15 percent
- Crowdfunding: 13 percent
- Loan from an alternative lender (online lenders like Funding Circle): 12 percent
Still, optimism showed relatively high in the survey when compared to past years. More than half (52 percent) were somewhat optimistic about the future of their business, with 38 percent claiming to be very optimistic.
Those sentiments reflected in expansion; 49 percent said they planned to grow their business by adding catering and 45 percent wanted to tack on private events—two strategies that outline an appetite for growth, TouchBistro said, but primarily through a diversification of revenue streams.
Plans for expansion in the coming years
- Add catering services: 49 percent
- Add private events: 45 percent
- Add multiple new locations: 40 percent
- Add a new location: 38 percent
- Franchise the business: 36 percent
- Add a virtual brand (ghost kitchen): 32 percent
- Not planning on expanding: 3 percent
Spotlight on staffing
FSR covered rising minimum wages in this recent piece. The straightforward point being wages are lifting on a state-by-state basis. But even in cases where increases are not mandates, restaurants are being influenced to pay more to compete with other industries, or restaurants. California is one lead example. The FAST Act drove large-chain quick-service brands to $20 per hour. But it wasn’t a buttoned-up point. Doing so also led to independents paying more in the back of the house to hold talent. Restaurants in states where the tip credit vanished have had to adjust models and lift wages, too. And on the hurdles go.
Labor costs were cited in TouchBistro’s survey as the No. 1 staffing or labor challenge among operators. In fact, 99 percent of full-service independents said they spent more on labor in 2024 than the previous calendar.
Despite financial strain, reducing headcount was the least common strategy deployed to lower labor costs (a signal, perhaps, restaurants understand the stakes of service for price-weary consumers). Operators said they increased productivity (39 percent), improved staff retention (36 percent), and introduced fresh technology (35 percent) as ways to lessen labor costs.
Tech capable of freeing up staff time, like QR code payments or AI-powered voice ordering, proved valuable. Forty-one percent of operators reported more efficient front-of-house teams and 34 percent back-of-house after implementing these solutions.
As they navigated higher food costs, TouchBistro said, independents also adapted to today’s sky-high labor costs by finding digital efficiencies.
Strategies implemented to reduce labor costs
- Increase productivity: 39 percent
- Increase staff retention: 36 percent
- Introduce new technology: 35 percent
- Cross-train/repurpose staff: 30 percent
- Use restaurant scheduling software: 30 percent
- Create labor targets: 30 percent
- Use POS sales data to predict scheduling needs: 29 percent
- Reduce hours of operation: 28 percent
- Reduce staff headcount: 24 percent
Tech implemented to alleviate staffing/labor cost concerns
- Order-ahead or pre-schedule online ordering solutions: 49 percent
- QR code payments: 48 percent
- QR code menus: 46 percent
- AI-powered voice ordering solutions: 42 percent
- Self-serve kiosks: 36 percent
- Robotics: 30 percent
- We have not implemented any tech for this purpose: 2 percent
A quote rom an executive kitchen chef/restaurant manager at a fine-dining spot in Dallas: “Labor control is an issue because we don’t want to pay for overtime – it depletes our profits. It’s honestly been a battle for us, fighting overtime. Being a fine dining restaurant, we have to maintain a certain image, so the amount of people I [have per shift] doesn’t necessarily help profits, but it helps the aesthetic and the customer view of it.”
Forty-one percent of operators surveyed reported more efficient FOH teams after introducing automation. For BOH teams, it was 34 percent.
Technology, and simply adoption being a staple of the current operating climate, led to operators saying they have a better handle on staffing issues than some past years.
In 2024, 21 percent said they were not short even a single staff member—a large improvement from 3 percent in 2022. In total, operators said they were short an average of 3.8 positions, which was also an increase from 2022, when they were thin an average of five positions. As for which roles, bartenders and dishwashers were most in demand.
The picture was less rosy regarding turnover, with 44 percent of operators citing staff loss as their No. 1 labor concern in the past year. Many reported low morale as well. However, the average turnover rate did slide to 26 percent from 28 percent, year-over-year.
Number of positions restaurants are currently short
2024
- We are not short any positions: 21 percent
- Less than 5: 47 percent
- Five to 10: 30 percent
- 11-plus: 2 percent
2023
- We are not short any positions: 18 percent
- Less than 5: 44 percent
- Five to 10: 34 percent
- 11-plus: 4 percent
2022
- We are not short any positions: 3 percent
- Less than 5: 44 percent
- Five to 10: 30 percent
- 11-plus: 9 percent
Taking inventory
Inflation leveled off a bit down the stretch of 2024. That didn’t change the point, though, operators are trying to squeeze out profits against elevated costs, from supplier to plate. Operators in TouchBistro’s survey ranked rising food costs and inflation as their top inventory challenge. On average, they said they’re spending 34 percent more on food costs, which was a noticeable decrease from 2023, when it was 41 percent. Even depressed, it’s a sizable cut.
Additionally, vendor management surfaced as a growing concern, particularly for brasseries, bistros, and cafes—an issue, TouchBistro said, likely stemming from higher food costs and operators pushing for better contracts.
Biggest inventory challenges in the past year
- Rising food costs and inflation: 39 percent (37 percent in 2023)
- Vendor management: 23 percent (14 percent in 2023)
- Supply and ingredient shortages: 20 percent (24 percent in 2023)
- Food waste: 18 percent (22 percent in 2023)
Elaborating on the price-ceiling note, 47 percent of operators reported raising prices in the past six months. That was far fewer than 2023, when it was 67 percent.
Among those who did take, they did so by an average of 14 percent. Many said this came at a cost to their business. More than a third (38 percent) observed customers spending less overall after prices increased; 36 percent saw smaller tips; and 33 percent said customers started ordering less alcohol. More than a quarter (29 percent) of restaurants with five to 20 locations also noticed negative reviews after lifting price.
TouchBistro suggested, instead of going further on the price line, operators could save costs on inventory by using cheaper ingredients when possible. They could repurpose ingredients in multiple dishes to reduce waste. Restaurants might also strip low-profit or time-consuming dishes to simply operations.
Changes in consumer behavior following menu price increases
- 38 percent: Customers spending less overall
- 36 percent: Customers tipping less
- 33 percent: Customers ordering less alcohol
- 33 percent: Customers ordering fewer dishes
- 30 percent: Customers ordering takeout/delivery less frequently
- 26 percent: Fewer customers visiting on the weekend
- 25 percent: Fewer customers visiting during the week
- 23 percent: Negative reviews
- 5 percent: No significant change in customer behavior
A café owner in Chicago: “We’ve definitely seen changes in our customers. We actually used to have a bar at the cafe, which we shut down in January. It was supposed to be for the 25 to 40 crowd, but now that generation is not drinking as much, so there wasn’t a demand for that kind of thing anymore. We removed it, even though we were sad to see it go. That was one big thing we just kind of gave up on. It’s not worth chasing it anymore. We were spending money on three extra employees who were doing nothing in the evening.”
Akin to 2023, locally sourced ingredients and plant-based dishes sat atop operator’s most-popular menu changes. In the next six months, 42 percent said they planned to add more of the former and the same percentage expected to layer in vegan options; 41 percent said they’d add more vegetarian items.
Non-alcoholic drinks were another popular addition—40 percent of operators told TouchBistro it was likely they’d add in 2024. It’s a shift that makes sense, the company said, given a third (33 percent) of operators noted customers ordering less alcohol.
Planned menu additions in the next six months
- 42 percent: Locally sourced ingredients
- 42 percent: Vegan options
- 41 percent: Vegetarian options
- 40 percent: Non-alcoholic drink options
- 37 percent: Diet-specific options
- 35 percent: Gluten-free options
Off-premises gains
There’s little mystery why takeout and delivery climbed through COVID and post. Beyond the shift in consumer behavior, there are just more systems at play. Apps and mobile ordering are commonplace, even for independents, whether solutions are integrated with providers or built white-label. And now, at a time of high inflation, ordering-in continues to witness a rise in popularity, TouchBistro data showed, with many customers viewing takeout and delivery as a necessity rather than discretionary.
In turn, 25 percent of operators said their online ordering sales significantly increased in the past year. Fifty-seven percent said they slightly increased. Among those who noted a hike, operators reported off-premises sales upped 32 percent on average.
Off-premises is proving a habit guests are willing to pay for.
Change in takeout/delivery sales compared to last year
- Slightly increased: 47 percent
- Significantly increased: 25 percent
- Remained the same: 17 percent
- Slightly decreased: 1 percent
- Significantly decreased: zero percent
On average, operators said they used three online ordering solutions—the same as 2023.
Online ordering platform usage
- Uber Eats: 58 percent
- Grubhub: 44 percent
- Restaurant’s website: 39 percent
- Postmates: 36 percent
- DoorDash: 20 percent
- Other: zero percent
When asked about the biggest online ordering challenge of the past year, maintaining order quality and technical issues with online ordering apps/software led the list of concerns. Conversely, reliability was the No. 1 factor operators sought when choosing a new online ordering solution, following by the ability to integrate into their POS. All this points to restaurateurs, TouchBistro said, being aware optimizing the off-premises experience for speed, accuracy, and efficiency boasts major benefits for guests and operators alike, even if you have to switch tech providers to reap them.
Biggest online ordering challenges in the past year
- Maintaining quality: 18 percent
- Technical issues with online ordering apps or software: 18 percent
- Cost of third-party apps: 15 percent
- Order accuracy: 13 percent
- Preparing orders on time: 13 percent
Biggest considerations when choosing an online ordering solution
- Reliability: 28 percent
- Ability to integrate into POS: 21 percent
- Cost: 19 percent
- Popularity in my area: 17 percent
- Delivery options: 15 percent
Marketing to wins
Most full-service independents (69 percent) said they have a website for their restaurant. Those with three to 20 units were more likely (74 percent).
Even more common was having a social media footprint. A full 99 percent of operators said they tout at least one. Facebook was the most common, but TikTok witnessed a massive spike in usage. Nearly half (48 percent) said they now use the platform compared to 26 percent in 2023.
You can thank Gen Z’s preference for TikTok as a search engine, as well as the organic content that spreads through its “For Your Page” discovery tool.
Social media platforms used by restaurants
- Facebook: 73 percent
- Instagram: 59 percent
- Twitter: 57 percent
- TikTok: 48 percent
- Snapchat: 31 percent
Additionally, 63 percent of full-serves said they currently offer a loyalty program, which was down a bit from 67 percent in 2023. However, those with three to 20 locations lifted the number to 70 percent.
TouchBistro credited this decline to the changing role of loyalty programs and the need to make them more profitable for restaurants. Survey data showed many options in the market no longer match what today’s cost-conscious consumers want out of a loyalty program. “Of course, the challenge for operators is that running a very discount-oriented reward program can quickly eat into already thin profit margins,” the company said.
So in order to make these programs work both ways, operators are experimenting with their loyalty setups and trying to reframe the “idea of value.” One example being personalized offers; 56 percent said they send tailored messaging based on diner data, like a guest’s dietary preferences, and 51 percent send offered based on personal details, such as a birthday.
Types of personalized offers restaurants send
- 56 percent: Offers based on selected preferences
- 51 percent: Offers based on personal details
- 48 percent: Offers based on past-order history
- 46 percent: Offers based on current location
- 45 percent: Offers from related partners/brands
Tech check
The POS has become ubiquitous—97 percent of full-service independents reported using one in the survey. What’s started to change, though, is what restaurants demand from the staple.
About two-third (67 percent) said most of the software they use is available through their POS provider rather than third-party integrations. Also, 63 percent of independents and 80 percent of restaurant group operators noted they’re using a payments solution integrated with their POS.
With this in mind, TouchBistro said, it’s unsurprising the solution’s comprehensiveness was the top factor operators reported looking for in a new POS setup. And considering 86 percent said they use the same POS at all their locations, it’s clearly a priority for operators to find all-in-one systems capable of supporting their business as it scales.
Use of POS-integrated versus third-party software
- 67 percent: POS-integrated software
- 19 percent: Mix of both
- 15 percent: Third-party software
Top factors considered when choosing a new POS
- Comprehensiveness of the solution: 35 percent
- Multi-location management capabilities: 34 percent
- Ease of use: 30 percent
- System reliability: 28 percent
- Ability to increase sales: 26 percent
- Customer support: 26 percent
- Third-party software integrations: 25 percent
- Reporting an analytics feature: 25 percent
- Price/affordability: 24 percent
- Training and/or installation time: 23 percent
- Recommendations/reviews: 23 percent
Automation is a term gaining ground. Half of full-service operators said they’re automating everyday business operations, with online ordering being the most common example. Invoicing and email marketing followed.
Virtually all operators said they’ve seen some benefits from doing so, including more efficient teams, more productive staff, and an increase in sales.
Even among those who have not automated operations, interest is high. When asked about barriers to getting started, the most common responses were concerns with system reliability (29 percent) and POS integration (28 percent). Upfront costs (28 percent) were also a factor.
Interestingly, TouchBistro said, fewer operators reported feeling overwhelmed or confused by the technology, “suggesting that today’s operators are much more savvy and willing to embrace technology if they know they can rely on it.”
Benefits of automation
- 42 percent: More productive staff
- 41 percent: Increased sales
- 41 percent: More efficient FOH operations
- 40 percent: Business growth
- 37 percent: Faster service
- 36 percent: Saved time
- 34 percent: More efficient BOH operations
- 34 percent: Saved money
- 31 percent: Happier customers
Barriers to automation
- 29 percent: Concerned with system reliability
- 28 percent: Business is too small to justify the cost
- 28 percent: Concerned with POS integration
- 28 percent: High upfront costs
- 26 percent: Technology seems too complicated
- 25 percent: Already efficient without the use of automation
- 24 percent: Haven’t had the time to research/purchase
- 24 percent: Ongoing expense
- 23 percent: Don’t have the time to teach staff how to use it
- 17 percent: Don’t know where to begin
- 15 percent: Don’t know what technology to use
The always-grainy debate around AI caught the attention of full-service operators in 2024. Ninety-five percent of respondents said they’ve tried some form of AI in their restaurant, with the most common being BOH solutions like AI-assisted inventory management (35 percent) and AI menu optimization (35 percent).
AI was less used for tasks like answering the phone, a sign, TouchBistro said, full-serves are trying to preserve the human touch to clarify that aforementioned “value” of experience.
Yet, like automation, there’s interest to add AI from those not currently deploying it—89 percent said they felt extremely positive or somewhat positive about the potential in restaurants.
There are concerns about reliability and complexity, but, as a whole, there’s clear openness to the new tech. “Operators saw what tech could do for them then,” TouchBistro said, referring to the pandemic, “and now, at a time of historic increases in the cost of labor, food, and rent, they’re keenly aware that they cannot afford to miss out on the latest advancements, even if it comes with a bit of a learning curve.”
Current use of AI solutions
- 35 percent: AI inventory management
- 35 percent: AI menu optimization
- 32 percent: AI reservations/booking
- 31 percent: AI menu creation
- 30 percent: AI content creation for marketing purposes
- 30 percent: AI voice ordering
- 29 percent: AI phone answering
- 29 percent: AI sales forecasting
- 27 percent: AI staff scheduling
- 5 percent: We are not using any forms of AI
Operators are planning to invest. Seventy-one percent said they expect to spend more on technology in the next six months, and 20 percent project to fork up significantly more. Only 3 percent said they plan to spend less. Among those who are ready to pour funds into tech, 35 percent said they will do so toward online ordering software; 32 percent marketing software; and 32 percent accounting/bookkeeping software.
Planned investments among those who intend to spend more on technology
- 35 percent: Online ordering software
- 32 percent: Marketing software
- 32 percent: Accounting or bookkeeping software
- 30 percent: Kitchen display system
- 29 percent: Loyalty software
- 28 percent: Reservation platform
- 28 percent: Inventory management software
- 27 percent: Staff scheduling software
- 26 percent: Payroll software
- 24 percent: Physical and/or digital cards
“With food and labor costs unlikely to ease significantly in the coming year, 2025 will likely be defined by a similar battle to keep expenses low,” TouchBistro said. “The good news is that operators appear much better equipped to tackle these issues than ever before. Not only are operators starting to move away from strategies that no longer serve them (like raising menu prices), they are also embracing tech-driven solutions with unexpected gusto.”
