Practical Tools
Restaurant

Menu Item Profit Optimizer

Enter your food cost (COGS) for a menu item, your target food cost percentage, and the delivery platform commission rate if applicable. The calculator suggests the correct selling price for dine-in, takeaway, and delivery - and shows gross profit and food cost percentage for each channel so you can price each one correctly.

Enter food cost, target food cost %, and delivery commission rate to see suggested prices.
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Suggested prices are mathematical estimates based on food cost and target percentage. They do not account for market pricing, customer price sensitivity, or your full cost structure. Use as a starting point and validate against your local market.

How to use this tool

  1. 1Enter the total food cost (COGS) for one portion of the item - include every ingredient including sauces, garnish, and any packaging for takeaway.
  2. 2Enter your target food cost percentage - most restaurants target 28-35% for food items.
  3. 3Enter the delivery platform commission rate if you sell on delivery - most platforms charge 20-30%.
  4. 4Read the recommended prices for dine-in, takeaway, and delivery. These are the prices at which your food cost hits your target percentage.
  5. 5Adjust the target percentage to model different pricing scenarios - a lower percentage means a higher price but better margin.

Formula used

Selling price = food cost / target food cost percentage. Delivery price = food cost / target food cost percentage / (1 - commission rate). Gross profit = selling price - food cost. Food cost % = food cost / selling price x 100.

Example

Chicken burger: food cost 4.80, target 32%, platform commission 25%

Dine-in price should be 15.00 (4.80 / 0.32). Takeaway is the same unless you add packaging. Delivery price should be 20.00 to hit 32% food cost after the 25% commission takes 5.00 from each order, leaving 15.00 to cover food and generate profit.

Pasta dish: food cost 3.20, target 28%, platform 20%

Dine-in price is 11.43. Delivery price is 14.29 to achieve 28% food cost after 20% commission. If this feels high for the market, the operator can accept a higher food cost percentage on delivery (say 35%) and set a delivery price of 11.43 / 0.35 / 0.8 = 15.24, then round to 14.90.

Common use cases

  • Setting a new menu price when you launch a dish and need to hit a target food cost percentage
  • Reviewing existing prices to find items that are underpriced for their actual ingredient cost
  • Deciding on a separate delivery menu price that accounts for platform commission
  • Training new managers to understand the relationship between food cost and selling price
  • Quickly testing the impact of a 10% ingredient cost increase on recommended selling price

Common mistakes

  • Not including all ingredients - food cost must cover every component including sauces, garnish, oil used in cooking, and any takeaway packaging.
  • Using the same price for delivery and dine-in - delivery orders have platform commission on top, so a dine-in price will produce a much higher food cost percentage on delivery.
  • Targeting too low a food cost percentage without accounting for labor - a 25% food cost sounds great, but if you achieve it by underpricing and losing volume, prime cost suffers.
  • Rounding prices down aggressively - a price of 14.99 feels cheaper than 15.00 but the 0.01 difference is negligible; erratic rounding across a menu creates pricing that feels inconsistent.

Frequently asked questions

What food cost percentage should I target?

Most full-service restaurants target 28-35%. Quick service and high-volume concepts often target 25-30%. Fine dining may run 35-40% because plate prices are high. The right target is the one that, combined with your labor cost, keeps prime cost below 65% of total sales.

Why is the delivery price higher than the dine-in price?

Delivery platforms take a commission of typically 20-30% on each order. If you charge the same price on delivery as dine-in, the platform commission comes entirely out of your margin. Pricing delivery higher offsets the commission so your effective food cost percentage stays at your target.

Can I use this calculator for drinks and desserts?

Yes. The formula works for any menu item. Drinks often have lower food cost percentages (15-25%) because the ingredient cost is low relative to the selling price. Desserts vary widely. Use the target percentage appropriate for each item category rather than a single blanket target.

What if the suggested price is too high for my market?

If the suggested price feels too high, you have three options: accept a higher food cost percentage for that item (and compensate with lower-cost items), reduce the food cost by finding a cheaper supplier or adjusting the recipe, or remove the item if it cannot be priced profitably at market rates.

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