This is why your food cost feels "off." #restaurantprofits #restaurantmanagement #foodcost

16 Jul 2025 · 1 min

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0:30

Short video (Donald Burns) explaining the difference between theoretical (perfect-world) food cost and actual food cost. Theoretical food cost is the ideal per-menu-item cost calculated down to the penny; actual food cost is what operators usually measure. Burns states restaurants should typically run about 2% above theoretical and uses an example (30% actual vs 28% theoretical) to illustrate that a small gap can still indicate good performance.

Questions this video answers

Theoretical (perfect-world) food cost is the ideal cost when you cost out everything on your menu down to the penny.

Around 2% above theoretical.

Two numbers you have to know. There's theoretical food cost and actual food cost. Actual food cost is how most restaurant owners operate. Theoretical food cost is what we call perfect world, ideal food cost. It's when you cost out everything on your menu down to the penny. That gives you what's called theoretical or perfect world. Now, the world is not perfect, so you can't ever run theoretical, but you can run around 2% above theoretical. So that person who called me and said my food cost is 30%, if they said my theoretical is 28, is my food cost good? I'd say, yeah, your food cost is really good because you should be able run around 2% above theoretical.