Menu Pricing with Target Food Cost

Target food cost gives you a pricing guardrail. It helps you avoid pricing too low just because competitors are nearby.

Set a realistic target

Targets often land between 25% and 35%, but your labor model and fixed costs should drive the final number.

Simple example

If plate cost is $4.50 and target food cost is 30%, suggested price is $4.50 / 0.30 = $15.00.

Use status bands for decisions

Green dishes are inside target, yellow dishes need attention, and red dishes usually require action on portion, cost, or price.

Common mistakes

• Using one target for every menu category.
• Ignoring taxes/fees impact on final guest spend.
• Keeping old prices after vendor cost increases.