Why this matters
A menu priced by gut feel can lose money on its best sellers, and you will not know until the bank account tells you. Before you commit to a lease or commissary (the next steps in this checklist), you need proof that every item earns its place at a price customers will pay.
What "done" looks like
- Every menu item has a recipe card with ingredient quantities and current costs
- You know the food cost percentage of each item, not just the menu average
- Prices hit your target margin after waste and trim
- You know which items drive profit and which drive traffic
How to do it
- Build a recipe card per item: every ingredient, exact portion, and current supplier price, including oil, garnishes, and packaging.
- Calculate plate cost, then food cost percentage: plate cost divided by menu price.
- Set a target range. Industry benchmarks generally run 28% to 35% food cost, quick-service concepts often sit lower, fine dining higher.
- Price backward from the target: plate cost divided by target percentage gives a starting price; round to what the market supports. Add a waste factor rather than assuming perfect yields.
- Re-cost quarterly or when a key ingredient price moves.
Common mistakes
- Costing only the protein and ignoring sides, sauces, packaging, and condiments
- Copying competitor prices without knowing their costs, portions, or purchasing power
- Never re-costing after supplier increases, so margins quietly erode
Real-world examples
- The widely cited restaurant industry benchmark keeps food cost between roughly 28% and 35% of an item's selling price, varying by concept
- Menu engineering, classifying items by profitability and popularity to decide what to promote, reprice, or cut, has been standard practice for decades, on food trucks as well as restaurants
From a founder's point of view
Pricing is a design decision, not an afterthought. Once the numbers are on paper, cutting a beloved money-loser stops feeling like betrayal and starts feeling like business.
Rule of thumb
If you cannot state the food cost of your top three sellers from memory, your prices are guesses.
