Calculate optimal menu prices based on food costs and desired profit margins
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Setting the right menu prices is crucial for restaurant profitability. Here are common approaches:
Price = Food Cost ÷ (1 - Desired Margin). This ensures your target margin is achieved.
Research competitors' prices for similar dishes and price accordingly.
Price based on perceived value to customers rather than just costs.
Industry benchmarks for food cost percentages:
Note: These are general guidelines. Your ideal costs may vary based on location, concept, and other factors.
The calculator uses this formula:
Example for $5 food cost at 30% margin: