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Restaurant Food Cost And Pricing Methods- How to Price a Menu For Profit?

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Restaurant Food Cost And Pricing Methods- How to Price a Menu For Profit?

Subject: Food Cost and Pricing Methods Used in the Restaurant Industry Like Simple Mark-Up Multiplier Method, Prime Ingredients Mark-Up Method,Ratio Pricing Method and Contribution Margin Pricing Method

Running a restaurant can be an expensive and complex procedure. To make sure you are on top of the business, figuring out food cost is one of the most important things. Food Cost is the ratio between how much it costs the restaurant in raw materials to make a dish and how much revenue the restaurant generates from it. Always remember that food cost changes every day. Best restaurants try to put food cost under 30 %. The four methods used in the restaurant industry:

FOOD COST


SIMPLE MARK-UP MULTIPLIER METHOD


SIMPLE MARK UP MULTIPLIER

PRIME INGREDIENTS MARK-UP METHOD

PRIME INGREDIENTS MARK UP METHOD

NOTE: The prime ingredients here are Ham, Bread and Cheese. I used the food cost method Ham(1.26) + Bread(0.60) + Cheese(0.75)=2.61


RATIO PRICING METHOD


RATIO PRICING METHOD

CONTRIBUTION MARGIN PRICING METHOD


CONTRIBUTION MARGIN PRICING METHOD

Author: (Abhi Chauhan-The Restaurant Academy Professor. ''Cutting the food cost is an art.''-Abhi)
Date: 29/02/2020

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