NAICS 722511 Quarterly Industry Report
Full-Service Restaurants
Comprehensive industry research for valuation professionals, business owners, buyers, and lenders
NAICS Code: 722511Sector: Accommodation and Food Services (72)Updated: Q1 2026
About This Report
This industry profile for Full-Service Restaurants (NAICS 722511) draws on data from the Bureau of Labor Statistics[6], U.S. Census Bureau[8], FDA food safety regulations[9], and SBA size standards database[7]. Published by Fair Market Value and updated quarterly, it provides valuation professionals, restaurant analysts, and business brokers with current market data. The editorial analysis reflects the independent assessment of FairMarketValue.com's research team, with all quantitative claims sourced to publicly verifiable databases.
Industry Snapshot
Key metrics for the full-service restaurants industry.
NAICS Sector
72
Accommodation and Food Services
Industry Definition & Overview
Full-Service Restaurants (NAICS 722511) encompasses establishments primarily engaged in providing food services to patrons who order and are served while seated and pay after eating per the U.S. Census Bureau[5]. These restaurants may provide alcoholic beverages, takeout service, live entertainment, and catering in addition to in-house dining operations.
The Bureau of Labor Statistics[6] reports roughly 253,000 establishments employing more than 5.5 million workers, making full-service restaurants one of the largest employer categories in the U.S. economy. Average profit margins run 3 to 5 percent at the industry level, with well-managed operations achieving 8 to 12 percent. Food costs typically represent 28 to 35 percent of revenue, while labor costs consume 25 to 35 percent depending on service level and market conditions.
Per the SBA Table of Size Standards[7], the size standard is $11.5 million in average annual receipts. Health department food safety compliance, alcohol licensing for beverage programs, and employment law requirements including tip credit regulations create a dense regulatory environment. Staffing challenges persist across the sector, with server, cook, and management positions facing high turnover rates. Delivery platforms have expanded the addressable market but carry commission costs of 15 to 30 percent that compress margins on off-premise orders. Independent operators and multi-unit franchise groups both compete for market share across every major U.S. metropolitan area.
What's Included in This Industry
- Table service dining with server-attended meal ordering and delivery
- Bar and alcoholic beverage program operations
- Takeout and delivery order preparation and fulfillment
- Kitchen operations including food preparation, cooking, and plating
- Menu development, pricing strategy, and seasonal rotation planning
- Front-of-house management including hosting, table turnover, and guest relations
- Catering and private event dining services
- Reservation system management and waitlist coordination
- Staff hiring, training, and tip-credit payroll administration
- Food safety compliance, health inspection readiness, and kitchen sanitation
NAICS Classification Hierarchy
| Level | Description | Code |
|---|---|---|
| Sector | Accommodation and Food Services | 72 |
| Subsector | Food Services and Drinking Places | 722 |
| Industry Group | Restaurants and Other Eating Places | 7225 |
| NAICS Industry | Restaurants and Other Eating Places | 72251 |
| National Industry | Full-Service Restaurants | 722511 |
Related NAICS Codes
| Code | Description | Relationship |
|---|---|---|
| 722513 | Limited-Service Restaurants | Limited-Service Restaurants share food preparation operations but use counter service rather than table service, typically operating with lower labor costs and higher customer throughput per seat |
| 722514 | Cafeterias, Grill Buffets, and Buffets | Cafeterias and Buffets offer self-service dining at lower price points, sharing kitchen operations but using a different service delivery format than the server-attended table model |
| 722515 | Snack and Nonalcoholic Beverage Bars | Snack and Nonalcoholic Beverage Bars serve a more limited menu focused on beverages and snacks, competing for consumer food spending in a lighter-service format |
| 722410 | Drinking Places (Alcoholic Beverages) | Drinking Places share beverage program operations and compete for evening customer traffic, with many full-service restaurants maintaining active bar programs as supplemental revenue |
| 722320 | Caterers | Caterers share kitchen operations and culinary staff capabilities, with many full-service restaurants offering off-premise catering as an additional revenue stream using existing infrastructure |
| 311812 | Commercial Bakeries | Commercial Bakeries supply bread, dessert, and pastry products to full-service restaurants, serving as wholesale ingredient vendors for operations that do not produce all baked goods in-house |
Geographic Concentration
Top states by share of national establishments.
| # | State | % Est. | Total Est. |
|---|---|---|---|
| 1 | California | 12.2% | 31,374 |
| 2 | Texas | 7.9% | 20,238 |
| 3 | New York | 7.5% | 19,384 |
| 4 | Florida | 7.0% | 18,055 |
| 5 | Illinois | 3.9% | 9,899 |
| 6 | Pennsylvania | 3.7% | 9,459 |
| 7 | North Carolina | 3.3% | 8,385 |
| 8 | Georgia | 3.1% | 7,918 |
| 9 | New Jersey | 3.1% | 7,895 |
| 10 | Ohio | 3.0% | 7,699 |
% Of Establishments
0%
12%
Source: County Business Patterns, U.S. Census Bureau[3]
SBA Lending Summary
28,496
Total SBA Loans
$14.2B
Total Loan Volume
$499K
Average Loan Size
12 yrs
Average Loan Term
10.12%
Average Interest Rate
556,232
Jobs Supported
Source: SBA 7(a) Program Data, U.S. Small Business Administration — FY 2025[4]
Key Insight: Per the SBA Table of Size Standards[7], Full-Service Restaurants (NAICS 722511) has a size standard of $11.5 million in average annual receipts for federal contracting purposes. SBA 7(a) loans[10] support restaurant acquisition, kitchen equipment upgrades, and working capital for qualifying operators in this capital-intensive food service segment. Additionally, 504/CDC loans[11] provide long-term, fixed-rate financing for major fixed assets such as real estate and equipment.
Top SBA Lenders
| # | Lender | Loans | Volume | Avg Loan |
|---|---|---|---|---|
| 1 | The Huntington National Bank | 2,472 | $844.5M | $342K |
| 2 | Newtek Bank, National Association | 2,008 | $807.9M | $402K |
| 3 | Celtic Bank Corporation | 640 | $485.8M | $759K |
| 4 | Readycap Lending, LLC | 888 | $483.9M | $545K |
| 5 | Northeast Bank | 2,640 | $454.0M | $172K |
Frequently Asked Questions
Common questions about this industry.
What types of businesses are classified under NAICS 722511?
NAICS 722511 covers establishments providing food services to patrons who order and are served while seated and pay after eating per the U.S. Census Bureau[5]. Restaurants may serve alcoholic beverages, offer takeout and delivery, provide live entertainment, and operate catering services. Counter-service restaurants where customers pay before eating are classified under NAICS 722513.
How large is the U.S. full-service restaurant industry?
The Bureau of Labor Statistics[6] reports roughly 253,000 establishments employing more than 5.5 million workers, making full-service restaurants one of the largest employer categories in the national economy. Operations range from single-location independent restaurants to multi-unit chains with hundreds of locations. Independent operators account for the majority of establishments by count.
What profit margins do full-service restaurants achieve?
Average profit margins run 3 to 5 percent at the industry level, with well-managed operations achieving 8 to 12 percent per industry benchmarking data. Food costs typically represent 28 to 35 percent of revenue, while labor consumes 25 to 35 percent depending on service level. Beverage programs generally carry higher margins than food service, making bar revenue an important profitability contributor for restaurants with alcohol licenses.
What is the SBA size standard for full-service restaurants?
Per the SBA Table of Size Standards[7], the size standard is $11.5 million in average annual receipts calculated over the preceding five fiscal years. Most independent restaurants fall below this threshold. SBA 7(a) loans are commonly used for restaurant acquisition, kitchen equipment purchases, and leasehold improvement financing.
What staffing challenges affect restaurant operations?
Server, cook, and management positions face persistent high turnover rates across the industry per BLS employment data[6]. Tip credit regulations, split-shift scheduling, and seasonal demand fluctuations complicate workforce management. Labor costs of 25 to 35 percent of revenue make staffing the second-largest expense after food costs. Competitive wages, benefits, and workplace culture have become critical retention tools.
How do delivery platforms affect restaurant profitability?
Third-party delivery platforms charge commissions of 15 to 30 percent per order, compressing margins on off-premise sales relative to in-house dining per industry analysis. Delivery has expanded the addressable customer base but creates dependency on external platforms for order volume. Some operators have invested in direct ordering systems to reduce commission costs while maintaining delivery capability for customers who expect the convenience.
What regulatory requirements apply to full-service restaurants?
Health department food safety compliance requires periodic inspections and food handler certifications per the FDA Food Code[12]. Alcohol licensing from state ABC commissions is required for beverage service. Employment law compliance including minimum wage, tip credit, and overtime regulations affects labor cost structures. ADA accessibility standards apply to all dining facilities serving the public.
How are full-service restaurants valued for acquisition?
Restaurant valuations typically apply multiples of 2 to 3 times seller's discretionary earnings (SDE) per industry transaction data, with adjustments for lease terms, equipment condition, brand strength, and location quality. Revenue multiples of 0.3 to 0.5 times are common for independent restaurants. Franchise restaurants may command higher multiples based on brand recognition and system support. Lease term length and transferability are critical factors because relocation costs can exceed the value of the business itself.
Sources & References
Government datasets and editorial sources used in this report.
- [1]U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages bls.gov
- [2]U.S. Census Bureau, Economic Census census.gov
- [3]U.S. Census Bureau, County Business Patterns census.gov
- [4]U.S. Small Business Administration, SBA 7(a) Loan Program Data data.sba.gov
- [5]U.S. Census Bureau census.gov
- [6]Bureau of Labor Statistics bls.gov
- [7]SBA Table of Size Standards sba.gov
- [8]U.S. Census Bureau data.census.gov
- [9]FDA food safety regulations fda.gov
- [10]SBA 7(a) loans sba.gov
- [11]504/CDC loans sba.gov
- [12]FDA Food Code fda.gov
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