Understanding Restaurant Profits and Prime Cost in 2026
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Prime Costs: Calculation, Formula & Real-World Examples
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Understanding Prime Cost: Definition, Formula, and Calculation Explained
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investopedia.com
The No.1 secret to a wildly profitable restaurant? Stop guessing and focus on the Prime Cost! This single metric, which combines your total food costs and your total labor costs as a percentage of sales, is the golden rule of restaurant finance. To secure a healthy net profit margin of 10% to 20%, your prime cost needs to stay strictly under 60% of your total sales. Hitting that target guarantees you at least 40% of gross profit on every single order you sell. Plus, here’s a simple rule for menu
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