How to set your limit for costs
Last Updated: February 26, 2025
About your Food / Beverage Cost Limit
The Food / Beverage Cost Percentage is calculated by dividing the cost of goods sold by the Recipe's Menu Selling Price. This percentage is compared to your Food / Beverage Cost Limit to assess if your Menu Selling Price is sufficient to cover the cost of goods sold while still generating a profit.
Tip: The average food cost percentage for restaurants falls between 28% and 35%.
By default your Food / Beverage Cost limit will be set to the following percentages:
- Anything up to 30% is fine and dandy, great job!
- Greater than 30% is getting a bit high...
- More than 50%? Are you nuts??
The Food / Beverage Cost Ideal Limit is then used as a benchmark to determine whether your Recipes are suitably priced based on the Food / Beverage Cost %. Any recipes that exceed the Ideal Limit will be flagged with an exclamation mark in the top right corner:
The Ideal Limits and Acceptable Limits are used in the Food Cost Statistics / Gross Profit Statistics tile on the Home page to allow you to monitor whether your purchase percentages align with your revenue goals:
Updating your limit
To make any changes to your current limit, from the navigation bar, expand the Admin heading and open the Settings page:
Begin by ticking the Enable Food / Beverage Cost % Limit setting:
Set your Ideal and Acceptable limits by dragging the handles on the gauge slider or by entering them manually in the text boxes:
The gauge on the settings page reflects the gauge shown on the dashboard tile.
In the example shown below, you can see the cost of purchases for this week are all within our Ideal Limit (0-20%) and are in the green.
The purchases for the month are a bit over the Ideal Limit and are Acceptable (20-40%).
It looks like we went a bit too wild with the cost of purchases over the year and those are in the danger zone (over 40%)!
When ready, go ahead and click Save down the bottom-right to apply your changes.
Please Note: When changing your limit, this may cause some Recipes to exceed the new margin. It is recommended that a Recipe Limit Report (located under the Recipes Reports page) be generated to discern which Recipes may require review.
Display Cost or Gross Profit on the Dashboard
You can also choose how your cost limit percentage is used on the Dashboard tile:
By default the dashboard is set to Display Food / Beverage Cost on Dashboard. With this setting enabled, the percentage gauge will reflect the proportion of your purchase costs relative to your total revenue:
If you want to focus more on whether your profits are on track, then you can choose Display Gross Profit on Dashboard to highlight the proportion of revenue instead:
Still have questions? Should you require further assistance, please Contact Us or start a live chat today!