What should food cost be in a fast food restaurant?

To run a profitable restaurant, most owners and operators keep food costs between 28 and 35\% of revenue.

What should food and labor cost be in a restaurant?

Restaurants should aim to keep labor costs between 20\% and 30\% of gross revenue. Once you have your staff all divvied up, you can compare what each team costs you and see if you can tinker with the combination of staff you schedule during each shift to bring your restaurant’s labor costs down.

How much should cost of goods be for a restaurant?

What should COGS be for a restaurant? The Food Service Warehouse recommends your restaurant cost of goods sold (COGS) shouldn’t be more than 31\% of your sales .

How do you calculate food selling price?

For someone new to the food service industry, pricing food for sale in a cafe or restaurant may appear as simple an equation as: ‘Cost of ingredients’ + ‘An adequate profit margin’.

Why is food a variable expense?

Not all variable expenses are discretionary expenses, however. Variable expenses are defined as such because the amount you spend may vary each month. Grocery shopping is also a variable expense. Your utility bills may also be variable expenses because they may change from month to month.

What is a good labor to sales ratio?

You can determine what’s a good labor to sales ratio and whether or not to decrease labor costs to get there. Labor cost should be around 20 to 35\% of gross sales. Cutting labor costs is a balancing act.

Does food cost include labor?

They are: Labor costs: These include paying your servers, cooks, dishwashers, cashiers, greeters, and managers. Food costs: This includes how much you need to pay for your food and beverage supplies and can fluctuate with the cost of your menu items. It can be calculated as a restaurant’s cost of goods sold.

What is cost of sales in restaurant?

For restaurants, cost of goods sold is the total cost of all the ingredients used to make menu items, right down to the garnishes and condiments. As a general rule, roughly one-third of a restaurant’s gross revenue goes towards paying for COGS.

What is a good cost of sales percentage?

Find Your Ideal Ratio As a general rule, your combined CoGS and labor costs should not exceed 65\% of your gross revenue – but if your business is in an expensive market, you should aim for a lower percentage.