Food costs make up a large portion of the money needed to run your restaurant. For example, if you sold a basket of chicken wings worth $3 for ingredients including chicken, celery, sauce, and cheese, you would set the price for that dish at more than $3. So your percentage of food expenses is an essential restaurant metric to keep an eye on constantly. With suitable recipes and resources, you can easily calculate your food cost equation. From there, you can lay the groundwork for optimizing your restaurant finances.
The most successful restaurant chains and franchises also understand the value behind keeping a close eye on food costs. For example, if McDonald’s sells 70 million burgers a day and takes a penny off COGS, they lose $700,000 per day or $255 million per year. Therefore, your restaurant food cost percentage is crucial because monitoring and optimizing it can help you maximize your profits.
