Question

You work with a local charity to sponsor a Run For The Cure in your community. You are a platinum sponsor and contribute $2,000. Although it's impossible to predict exactly, you know that about 0.8% of the 8,000 runners try your restaurant within a week. If your average check is $45 and your gross margin percentage is 80%, does the sponsorship pay for itself just based on this immediate business?

Answer 1

Yes, the sponsorship will pay for itself just based on this immediate business.

What is average check?

Average check is known to be a metric common in the restaurant industry which restaurateurs use to determine the value of their customers.

We can see here that the individual sponsors with $2000.

So, if 0.8% of 8,000 runners come to the restaurant, it means that: 0.008 x 8,000 = 64 runners.

Then an average check of $45:

If the 64 runners spend $45 each = 64 x $45 = $2,880.

Also, considering the fact that the gross margin percentage is 80% which is a good profit margin.

Therefore, the sponsorship will pay for itself just based on this immediate business.

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