How Menu Pricing Works
The formula is simple: divide your recipe cost by your target food cost percentage expressed as a decimal.
Example: Dish costs $8.50 to make. Target food cost is 30%. Menu price = $8.50 ÷ 0.30 = $28.33. Round to $28 or $29 in practice.
The calculated price is a floor, not a ceiling. If your market supports a higher price, charge more — your food cost percentage will improve and your gross profit per plate increases.
Target Food Cost % by Restaurant Type
| Format | Typical Target | Implication for Pricing |
|---|---|---|
| Fine Dining | 30–38% | Higher cost ingredients, higher prices |
| Full-Service Casual | 28–32% | Standard full-service target |
| Fast Casual | 25–30% | Tighter margins, lower check average |
| Bar Food | 22–28% | Higher alcohol revenue subsidizes food |
Lower your recipe cost to improve your pricing power
If your calculated menu price is higher than your market will support, the answer is to reduce recipe cost — not to price below your target and erode your margin. The fastest way to reduce recipe cost on high-volume dishes is to compare distributor prices on your key proteins and produce.
Reduce Recipe Cost by Shopping Distributor Prices
A 10% reduction in your chicken breast cost directly reduces recipe cost on every chicken dish. FrillPick shows you where you are overpaying — item by item.
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Frequently Asked Questions
How do you calculate menu price from food cost?
Menu Price = Recipe Cost ÷ Target Food Cost Percentage. For example, if a dish costs $8.50 to make and your target food cost is 30%, the menu price = $8.50 ÷ 0.30 = $28.33. Round to a practical price point — $28 or $29 in this case.
What food cost percentage should I use to price my menu?
Most full-service restaurants target 28–32% food cost when pricing menus. Fast casual targets 25–30%. Fine dining can price at 30–38% because higher revenue per cover absorbs the higher cost. Use a consistent target across your menu, then use menu engineering to promote your highest-margin items.
Should I round my menu prices?
Yes. The calculated price is a floor, not a fixed number. Round to a psychologically effective price point — $28, $29, or $28.50 rather than $28.33. In fine dining, round numbers ($28, $32, $45) are standard. In casual dining, prices ending in .99 or .95 are common. Never price below your calculated minimum or you are selling at a loss relative to your food cost target.
What is the difference between menu price and recipe cost?
Recipe cost is the total cost of all ingredients in a single serving of the dish, including proteins, produce, dairy, garnishes, sauces, and any other consumable components. Menu price is what the guest pays. The ratio between them is your food cost percentage for that dish.
How do I lower my recipe cost without changing the dish?
The two levers are ingredient sourcing and portion size. On sourcing: compare distributor prices on your key proteins and produce — even a 10% reduction in your chicken cost meaningfully reduces recipe cost on chicken-based dishes. On portion: verify actual weights against your recipe card spec during a service audit.