What is average restaurant food cost?

Definition

Average restaurant food cost or food cost percentage is a way to regulate the profit on any given dish in a restaurant. An item's average food cost is the ratio of ingredients and the revenue that those ingredients generate when sold. It is always expressed as a percentage. A restaurant's average food cost determines its profitability. It is one of the best methods to make a profit and shield your business from unnecessary losses. Calculating the average food cost per month ensures that you stay within your budget, helps in determining menu pricing, and optimizes the prime cost as well.