Menu pricing and food cost percentage: the formula owners actually use

To price a menu item, add up the cost of every ingredient on the plate, then divide by your target food cost percentage. At a 30% target, a dish that costs $5 to make should sell for about $16.67 ($5 ÷ 0.30). Then adjust for what guests in your area will pay, and check your real food cost every month.

The menu price formula

Menu price = plate cost ÷ target food cost %

And the reverse, to check a price you already charge:

Food cost % = plate cost ÷ menu price × 100

If you prefer a multiplier, divide 1 by your target:

Target food cost	Multiply plate cost by
25%	4.00
28%	3.57
30%	3.33
32%	3.13
35%	2.86

Resy gives the same method: a chicken parmesan that costs $5 to make, at a 30% target, gives a baseline price of about $16.70.

What food cost percentage should you aim for?

Resy cites US Foods saying the average food cost percentage for full-service and limited-service restaurants is between 28% and 32%. Catering software company Galley Solutions gives a wider 28% to 35% range for catering menus.

For context, the National Restaurant Association described a typical pre-pandemic restaurant in 2022 where food and labor each took about 33 cents of every sales dollar. Those two costs together are your prime cost, so a higher food cost leaves less room for labor. See our restaurant profit and loss statement guide for how they fit together.

Your right target depends on your concept:

• Higher food cost, lower labor: simple menus, counter service, high-volume dishes.
• Lower food cost, higher labor: dishes with long prep, scratch sauces, table service.
• Different targets by item: drinks, rice and bread often run low; steak and seafood often run high.

Step by step: cost one plate

1. List every ingredient on the plate, including oil, butter, spices, sauce and garnish.
2. Weigh each portion the way your cooks actually plate it.
3. Find the cost per unit from your latest invoice (per pound, per ounce, per each).
4. Adjust for yield. If you buy 10 lb of chicken thighs and get 8 lb after trimming, your usable cost is higher than the invoice price.
5. Add a small amount for waste and extras like to-go containers if it is a takeout item.
6. Add it up. That is your plate cost.

Worked example: a chicken curry plate

These are example costs. Use your own invoices.

Ingredient	Portion	Cost
Boneless chicken thigh (after trim)	7 oz	$1.75
Curry sauce (onion, tomato, cream, spices, oil)	6 oz	$0.95
Basmati rice (cooked)	6 oz	$0.35
Bread	1 piece	$0.30
Garnish and side salad	—	$0.25
Waste allowance (5%)	—	$0.18
Plate cost		$3.78

Now price it at three targets:

Target food cost	Formula	Menu price	Rounded
28%	$3.78 ÷ 0.28	$13.50	$13.99
30%	$3.78 ÷ 0.30	$12.60	$12.99
32%	$3.78 ÷ 0.32	$11.81	$11.99

At $12.99, the real food cost is $3.78 ÷ $12.99 = 29.1%. You can try this with your own numbers in the menu price calculator.

Don’t stop at the percentage

Food cost percentage is a guide. What pays rent and wages is the dollars left after food, sometimes called contribution margin.

Dish	Plate cost	Price	Food cost %	Dollars left
Vegetable curry	$2.10	$11.99	17.5%	$9.89
Chicken curry	$3.78	$12.99	29.1%	$9.21
Lamb curry	$6.40	$17.99	35.6%	$11.59

The lamb has the worst food cost percentage but leaves the most dollars per plate. Don’t drop a dish just because its percentage looks high. Look at how many you sell and how much each one leaves.

Check the price against your market

The formula gives you a floor, not the final price. Resy suggests comparing 5 to 10 similar restaurants in your area on portion, price and quality. Then ask:

• Is my portion bigger, smaller or the same?
• Do guests see this as a value dish or a special dish?
• Can I make the dish cheaper without guests noticing, such as a smaller garnish or a different cut?

If the formula price is too high for your market, change the recipe or portion. Don’t just accept a thin margin.

Prices for online ordering and delivery apps

Takeout adds containers, bags and utensils. Add those to the plate cost for takeout items.

Delivery apps take a commission on each order. Some restaurants charge higher prices on apps to cover it. Work out what a dish really leaves you after the app’s commission with the delivery fee calculator, and read delivery app fees for restaurants before you set app prices.

Pricing combos, meals and specials

Combos and set meals bundle a few items at one price. Cost them the same way:

1. Add the plate cost of each item in the combo.
2. Pick a target for the combo. You might accept a slightly higher food cost on a combo if it raises the check size.
3. Check the dollars left compared with selling the main dish alone.

For example, using the costs above: a chicken curry plate ($3.78) plus a drink ($0.40) and a dessert ($0.90) has a combo cost of $5.08. Priced at $16.99, food cost is 29.9% and $11.91 is left. The curry alone leaves $9.21. If the combo makes guests add items they would have skipped, it is a win, even with a small discount against buying each item separately.

Specials work the same way. Cost them before they go on the board. A special made from items you already stock, and that would otherwise go to waste, can carry a lower price and still leave good dollars.

Common menu pricing mistakes

• Pricing from a competitor’s menu without knowing your own plate cost.
• Forgetting the small stuff: oil, sauces, garnish and to-go containers add up.
• Costing once and never again. Supplier prices change.
• Looking only at the percentage, not the dollars each plate leaves.
• Big, rare price jumps instead of small, regular checks.

Check your real food cost every month

Plate costing tells you what food cost should be. Your inventory tells you what it was.

Food cost % for a period = (beginning inventory + purchases – ending inventory) ÷ food sales

Resy’s example: $14,000 starting inventory, plus $2,000 purchases, minus $13,000 ending inventory, divided by $10,000 food sales = 30%.

If your real food cost is well above your plate-costing number, look for:

• Portions growing on busy nights.
• Waste and spoilage.
• Comps and staff meals not recorded.
• Supplier price increases you haven’t priced in.
• Theft.

When and how to raise prices

• Recost your top sellers whenever a key ingredient moves, and at least a few times a year.
• Raise in small steps. Resy suggests small, frequent increases, such as about 3% several times a year, rather than one big jump.
• Change price and plate together when you can, such as a new side or better description.
• Watch sales for two weeks after a change.

Menu pricing checklist

• Every dish has a plate cost from current invoices.
• Portions are weighed and written on a recipe card.
• I picked a target food cost for each category.
• I checked prices against 5 to 10 local competitors.
• Takeout items include container costs.
• I count inventory and check real food cost monthly.

For more ways to grow profit, not just sales, see how to increase restaurant sales.

How WhatsTable helps

WhatsTable’s menu price calculator turns plate cost and a target food cost into a suggested price. Inside WhatsTable, Money shows a daily P&L, so food cost and sales stay in view every day, and purchasing lets your chef approve vendor orders before they are emailed. WhatsTable works with Clover POS. It costs $0 a month plus 5–10% of sales through WhatsTable, and nothing is added to guests’ bills. Book a demo.