What's a healthy food cost percentage for restaurants & food service?
Short answer
For restaurants & food service, a healthy food cost percentage is around 28–32%. It's the range most lenders, acquirers, and consultants use as the "healthy" band for restaurants & food service.
Real peer data
Community median publishes once we have 5+ anonymous submissions from restaurants & food service. Currently at 0. Run your numbers below to help build it — your ratios are shared, your business name and dollar amounts are not.
Formula
Food Cost (%) = Cost of Food Sold / Food Sales × 100
Take the cost of the food you used during the period, divide by food sales (not total revenue), multiply by 100.
Why food cost percentage matters for restaurants & food service
Food cost is the largest controllable expense in a restaurant. Industry-leading restaurants target ~28–32%. Anything above 35% and you're either pricing too low, wasting too much, or stealing from yourself.
Understanding your food cost percentage in the context of restaurants & food service lets you see whether you're mid-pack, exceptional, or at risk — before your bank or accountant tells you.
People also ask
Common questions about food cost percentage for restaurants & food service
What is a good food cost percentage for restaurants & food service?+
For restaurants & food service, a healthy food cost percentage is around 28–32%. The exact number depends on scale, region, and business model, but this is the range most banks, acquirers, and industry consultants treat as "healthy."
How is Food Cost Percentage calculated?+
Take the cost of the food you used during the period, divide by food sales (not total revenue), multiply by 100.
Why does food cost percentage matter more for restaurants & food service?+
Food Cost Percentage is one of the top metrics used to underwrite restaurants & food service. Lenders, buyers, and even landlords tend to check it before signing anything.
What's the fastest way to improve my food cost percentage?+
Run your numbers through CFO Grade — the free memo pinpoints the two or three levers that move food cost percentage fastest for a business your size, in your industry. Common fixes for restaurants & food service include pricing, cost discipline, and cash-cycle tightening in that order..
See your food cost percentage — graded against restaurants & food service peers.
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