Guide2026-04-25

How to Calculate Food Cost Percentage for Your Restaurant

Food cost percentage is the backbone of your restaurant's profitability. It tells you how much of your revenue goes into raw ingredients. The formula is simple: (Cost of Ingredients ÷ Menu Price) × 100. For example, if your paneer tikka costs 80 to make and you sell it for 250, your food cost percentage is 32%.

Most profitable restaurants in India maintain a food cost percentage between 28-35%. If yours is above 40%, you're likely losing money on every plate. Track this weekly for your top-selling dishesdal makhani, biryani, tandoori itemsand adjust portion sizes or suppliers accordingly.

Three Quick Wins to Lower Food Costs

Negotiate bulk rates with your sabzi mandi suppliers. Use every part of ingredientsmethi stems, leftover rotis for breadcrumbs. Most importantly, reduce wastage by tracking what gets thrown out daily. Even saving 500/day adds up to 15,000 monthly.

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