Methodology & sources

Food cost %

food_cost_percent = food_cost / revenue

Industry guidance places target food cost between 28–32% for most full-service operations, with limited-service often running 25–30%. Above 35% sustained typically signals pricing, purchasing, waste, or theft issues. Source: National Restaurant Association — restaurant operations guidance.

Menu price

menu_price = recipe_cost / target_food_cost_percent

The plate-cost method assumes recipe cost is the sum of all ingredient costs at the portion size sold. Charm rounding (e.g., $7.95 instead of $7.83) is a display convention, not a math change. Source: ServSafe Manager textbook; standard menu costing practice.

Prime cost

prime_cost = food_cost + beverage_cost + labor_cost
prime_cost_percent = prime_cost / revenue

Labor cost is fully loaded: wages + payroll taxes + benefits + workers' comp + paid time off. Industry rule of thumb: ≤ 60% prime cost is healthy for full-service; limited-service can target ≤ 60–65%. Source: National Restaurant Association.

Recipe cost

total = sum(quantity_i × unit_cost_i)
cost_per_serving = total / servings

Unit consistency is the operator's responsibility — if quantity is in grams, unit cost must be $/gram. The calculator does not convert units. Source: ServSafe Manager textbook; standard plate-costing methodology.

Labor cost %

labor_cost_percent = labor_cost / revenue

Includes all wages, salaries, payroll taxes, benefits, and paid time off over the same period as revenue. Industry rule of thumb: 25–35% for full-service, 20–25% for limited-service. Source: U.S. Bureau of Labor Statistics + National Restaurant Association.

Regional segment bands

Several calculators show a "regional segment estimate" alongside the headline number. These are estimates composed from public-data sources, not measured peer benchmarks from operator data. The composition rule:

regional_band_low  = nra_segment_band.low  × (bea_rpp / 100)
regional_band_high = nra_segment_band.high × (bea_rpp / 100)

For the suggested-price band on the menu-price and recipe-cost calculators, a 12-month BLS CPI-FAFH adjustment is also applied to capture menu-pricing drift:

peer_band_low  = (recipe_cost / segment_band.high) × rpp_factor × (1 + cpi_fafh_12mo)
peer_band_high = (recipe_cost / segment_band.low)  × rpp_factor × (1 + cpi_fafh_12mo)

Inputs and uncertainty labels:

• NRA segment bands (qsr / casual_fsr / fine_dining / cafe / bar) — published industry guidance for food cost %, labor cost %, and prime cost %. Uncertainty: estimated.
• BEA Regional Price Parities — Bureau of Economic Analysis state-level RPPs, averaged to U.S. Census region (Northeast / Midwest / South / West). Resolution: region, not city. Uncertainty: observed (annual release).
• BLS CPI-FAFH (Food Away From Home, 12-month) — Bureau of Labor Statistics Consumer Price Index for food consumed away from home, used only on the suggested-price band. Uncertainty: observed.

Sanity floors and ceilings: every composed value is checked against an operator-plausibility range (food cost 15–45%, labor cost 15–45%, prime cost 35–80%). A value outside the range signals a composition bug, not real variance — the UI suppresses it instead of showing a misleading number.

Limitations: state-level RPP averaged to four Census regions undersells variance inside a region (e.g., NYC vs. upstate NY). Don't read region precision as city precision. Always verify against your local market before pricing or budgeting decisions.

Diagnostic content

The "What this likely means" section on each calculator is operator-judgment content, not statistical inference. Each band has a small set of likely causes ranked by approximate operational frequency, with one concrete first step.

These are diagnostic prompts ("most often caused by..."), not prescriptions. Your books are authoritative — the calculator's job is to point at the candidate causes worth investigating. Editorial review enforces operator vocabulary and avoids generic "X tips for restaurants" framing.

Update policy

• If a primary source updates its industry-band guidance, this page is updated within 30 days.
• Each calculator carries its own "Last reviewed" date.
• Reported errors are fixed and the change is logged in the public decision log.