Food Cost Percentage
The ratio of food and beverage costs to total sales revenue, typically expressed as a percentage. QSR industry benchmarks range from 25-35% depending on concept.
Related Terms
COGS
Cost of Goods Sold - the direct costs attributable to the production of food and beverages sold, including ingredients, packaging, and direct labor costs. Typically expressed as a percentage of sales.
Prime Cost
The sum of food costs and labor costs, representing the two largest controllable expenses in restaurant operations. Typically targeted at 55-65% of sales in QSR.
Gross Margin
Sales revenue minus cost of goods sold, representing the profit available to cover labor and other operating expenses. Expressed as a percentage.
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