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.
Related Terms
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.
Labor Cost Percentage
Total labor expenses (wages, benefits, payroll taxes) as a percentage of sales. QSR benchmarks typically range from 25-35%, varying by service model and automation level.
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.
Related Articles
The QSR Operator's Playbook: 50 Tactics to Increase Profitability
Proven strategies to improve restaurant profitability across food cost, labor efficiency, revenue optimization, and operational excellence. Actionable tactics every QSR operator can implement.
Operations & ManagementThe Ultimate QSR Franchise Comparison Chart: 50 Chains Side by Side
Compare investment costs, fees, support, and requirements for 50 major QSR franchises. The most comprehensive franchise comparison resource available.
Finance & EconomicsBest Low-Cost QSR Franchises Under $100K: 2026 Guide
You don't need half a million dollars to enter franchising. We identify legitimate low-cost QSR opportunities under $100K and explain what you're really getting for your investment.
Finance & EconomicsSubway vs Jersey Mike's vs Jimmy John's: The Sub Sandwich Franchise Wars
Three sandwich giants compete for franchise dominance. We compare investment costs, profit potential, and operational differences to reveal which sub shop offers the best franchise opportunity.
Industry AnalysisDunkin' vs Starbucks Franchise: Which Coffee Giant Is the Better Investment?
Coffee shop franchising comes down to two major players with vastly different models. We compare costs, profits, operations, and growth potential to help you choose the right brew.
Finance & Economics