Food Cost & Margins
Food cost is the number that tells the truth about your restaurant. Revenue lies — a packed Saturday can hide a Tuesday that's bleeding cash. Labor costs fluctuate with the schedule.
But food cost percentage sits there on the page and tells you exactly how much of every dollar you're handing back to your suppliers. The formula is simple. What you spent on food, divided by what you sold.
Most concepts need that number between 28 and 35 percent to survive. The problem is that almost nobody calculates it often enough to catch the drift before it becomes a crisis. These videos cover the real mechanics — how to run the formula, how to price a menu that protects your margins, and what to do when the numbers start moving in the wrong direction.
The Drift Nobody Catches in Time
Here's how it usually goes. You open. The menu gets priced on instinct and a rough sense of what the neighborhood will pay.
For a while, the register fills up and nobody questions the math. Then your chicken supplier raises prices by eight percent. A new prep cook starts overportioning the salmon.
A popular special runs for three weeks and never gets costed. Each one is small. Together they move your food cost from 31 to 37 percent, and you don't notice until the quarterly P&L arrives and the money isn't there.
The fix is boring. Cost your recipes. Update the costs when your invoices change.
Weigh your portions. Calculate food cost weekly, not monthly — monthly is an autopsy. Weekly gives you time to adjust.
The Drift Nobody Catches in Time
Here's how it usually goes. You open. The menu gets priced on instinct and a rough sense of what the neighborhood will pay.
For a while, the register fills up and nobody questions the math. Then your chicken supplier raises prices by eight percent. A new prep cook starts overportioning the salmon.
A popular special runs for three weeks and never gets costed. Each one is small. Together they move your food cost from 31 to 37 percent, and you don't notice until the quarterly P&L arrives and the money isn't there.
The fix is boring. Cost your recipes. Update the costs when your invoices change.
Weigh your portions. Calculate food cost weekly, not monthly — monthly is an autopsy. Weekly gives you time to adjust.
“You don't go broke all at once. You go broke a half-percent at a time.”
The Numbers, the Formulas, and the Operators Who Use Them
256 videosVideos on food cost calculation, menu pricing strategy, margin analysis, and the franchise economics behind the biggest brands in food.
Every time a supplier raises a price, your recipe costs change. If you're not updating them, your menu prices are fiction. Second: portion control that's enforced, not suggested.
The difference between a 30 and a 36 percent food cost is often one cook who eyeballs the protein instead of weighing it. Scales are cheaper than going under. Third: a waste log that gets used.
Not a punishment system — a diagnostic one. When you know where product disappears, you can fix the cause instead of guessing at it.
The numbers here connect to everything else. Kitchen Systems covers the workflow and prep structures that prevent waste before it happens. When the margins collapse entirely, Restaurant Failures shows you what the end looks like — and why it was usually avoidable.