Food Cost Percentage Explained

Food cost percentage tells you what share of each menu dollar is spent on ingredients. It is one of the fastest ways to catch margin problems before they show up in monthly reporting.

What is food cost %?

The formula is simple: Plate Cost / Menu Price = Food Cost %. If your plate cost rises and menu price stays flat, your percentage increases and profit tightens.

Simple example

If a dish costs $5.20 to make and sells for $18.00, then $5.20 / $18.00 = 0.289, or 28.9%.

How operators use this number

Most operators set a target range by concept and location costs. They review high percentages first, then adjust portion size, vendor choice, or menu price.

Common mistakes

• Using old vendor pricing for key ingredients.
• Ignoring garnish and small add-ons in plate cost.
• Comparing percentages without considering concept differences.