Four-wall EBITDA
A location’s earnings before interest, taxes, depreciation and amortization (EBITDA) after relevant site operating expenses and before allocated corporate overhead. It is a site-level earnings measure, not a complete test of economic viability or cash flow.
Four-wall EBITDA in round numbers
Hypothetical annual amounts: US$2m of revenue at a 22% contribution margin gives US$440,000 of contribution. Assume US$300,000 of additional site operating costs were not already deducted in that contribution and exclude depreciation and amortization. Four-wall EBITDA is then US$140,000. Corporate overhead and capital needs still matter to the business’s total economics.
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| Measure | US$ thousands unless stated |
|---|---|
| Revenue | 2,000 |
| Contribution at 22% | 2,000 × 22% = 440 |
| Additional site operating costs | 300; not already deducted; excludes D&A |
| Four-wall EBITDA | 440 − 300 = 140 |
Terms Related to Four-wall EBITDA
Contribution margin · Unit economics · Same-store sales · Facility rationalization · EBITDA · All of the glossary