Food Cost Management: How to Reduce Expenses While Increasing Profits

Excellent food cost management is crucial to the success of a restaurant. Learn how franchising can help you with this and increase your business' profit.

The Cost of Doing Food Business

Food cost management refers to the process of controlling the expenses associated with purchasing and storing ingredients and other food-related inventory. This also includes the preparation and serving of menu items. Understanding how to effectively manage these costs is essential to the success and longevity of any food service business.

Since food is a constant expense for restaurants, and often one of the largest, even a small increase in food costs can have a significant impact on your bottom line. By controlling these costs, you can ensure that you are purchasing ingredients at the best possible prices, minimizing food waste, and pricing your menu items appropriately. If food costs are too high, it will be difficult to generate a profit, even if you are selling a high volume of product. On the other hand, if food costs are low, you will be able to offer menu items at a lower price point and increase the number of guests you serve. Additionally, controlling food costs gives you more flexibility in your menu offerings, allowing you to experiment with new menu items and ingredients without worrying about the financial impact.


Strategies for Managing Food Cost

If you own or operate a restaurant that is already in business, one effective way to help control food costs is to regularly review your inventory against sales and cut back on or eliminate any items that are not selling well or approaching their expiration date. You pay for your inventory whether it gets used or not, so finding ways to limit unnecessary spending will ultimately increase your profits. Instead of over-stocking your restaurant (which can lead to food spoilage and other forms of waste), examine previous years’ sales numbers to help predict the products you require the most of, most frequently. Your restaurant management software can help you track inventory as it pertains to specific menu items, account for dishes that sell the most, and which non-food items—like paper napkins and takeout containers—you may need more of.

In terms of making sure your menu items are priced appropriately, be sure to monitor portion sizes and how much food is returning to the kitchen. This can help you ensure that each dish is being prepared with the appropriate amount of ingredients. Additionally, you can work on negotiating better prices with suppliers by purchasing some items in bulk or by committing to long-term or exclusive partnerships.

As an even more comprehensive strategy, owning a franchise can be a great way to manage your restaurant’s food costs. Many franchisors have established relationships with suppliers and can secure better pricing for ingredients that help ensure brand-wide consistency. Franchisees can benefit from the collective buying power of the entire franchise system, resulting in even greater savings. Beyond that, the detailed operations manuals and training programs utilized by franchises can help you more effectively manage food costs than if you were doing it on your own.


Wayback Burgers: The Perfect Recipe for Lower Costs and Higher Profits

While independent restaurant owners may have to learn how to manage food costs on the fly, franchise owners benefit from years of hard-won trial and error experience and success before they even open their doors. Menu pricing at Wayback Burgers is driven by great relationships with national brands and vendors. We focus on national contract pricing and distribution to streamline your purchasing to one distributor that carries all the products you need for ease of ordering. As one of the nation’s leading burger restaurant franchises, Wayback Burgers has food cost down to a science, and our growing network of franchise owners are reaping the benefits.

Since 1991, Wayback Burgers has been perfecting its business model. Now, the brand has over 170 locations worldwide. Those interested in franchising with Wayback Burgers must have $200,000 in liquid capital.

To learn more about franchising opportunities with Wayback Burgers, get started.