Start with operating drivers, not a growth percentage
A restaurant projection should explain how revenue will be produced. Seat count, table turns, dayparts, days open, average check, menu and beverage mix, private events, takeout, delivery, and seasonality provide a more testable foundation than applying a percentage increase to the prior year.
The level of detail should fit the dispute. More detail is not automatically better; unsupported precision can create false confidence. The goal is a model whose material assumptions can be traced to records, market evidence, or a clearly explained operating judgment.
Capacity and demand are different questions
Physical capacity establishes what might be served. It does not establish that customers would arrive. A credible projection separates the ability to produce from the market demand required to fill that capacity.
Location, concept, price point, competition, reviews, marketing, local traffic, seasonality, and historical capture all bear on demand. A projection that assumes full or near-full use without examining these factors usually overstates what the operation could reasonably achieve.
Margins must move with the business
Food and beverage cost, direct labor, credit-card cost, supplies, utilities, and other expenses respond differently as sales change. Management payroll, occupancy costs, insurance, and other expenses may remain comparatively fixed over the relevant range.
A supportable model states how each significant cost behaves and avoids borrowing a margin from a different concept, market, or stage of development without a reasoned comparability analysis.
Openings and turnarounds require a ramp
New and repositioned restaurants do not ordinarily begin at a stabilized level. Hiring, training, menu refinement, marketing, operational learning, reviews, and customer awareness affect the path to stabilization. The model should address both the time required and the working capital needed to get there.
Similarly, a turnaround projection must confront the reason the restaurant underperformed. A new operator, renovation, menu, or marketing plan can change results, but the analysis should identify the specific mechanism rather than assume that a change in ownership cures every constraint.
The practical test
Counsel evaluating a restaurant projection can ask whether another experienced operator could follow the assumptions, understand the evidence supporting them, and see how changes in the key drivers affect the result. If the answer is no, the projection may be a calculation—but it is not yet a persuasive operating case.