How to Charge for Free Food in a Restaurant

 In 1. David Scott Peters, budget, Food Costs, The Numbers, Video Blog

Have you ever wondered how how to charge for free food in a restaurant? Do you offer something for free in your restaurant? For example, chips and salsa? Or bread and butter? Or even condiments? Any product that leaves your shelves that you don’t get money for still affects your food cost. Watch this video for a full explanation of how to charge for free food in a restaurant.

Food cost is beginning inventory plus purchases minus ending gives you use and use divided by sales gives you food or pour cost. Then the more you use that doesn’t bring in money, then the higher your food cost is going to be.

That’s why I operate with the mantra “don’t give any food away for free.” That doesn’t mean you change your menu or restaurant style or your culture. And it definitely doesn’t mean you add it to the ticket. It just means you have to incorporate the cost of that free product into your food cost somehow.

So how do you incorporate the free product into the cost of the menu item where it’s incorporated? Create a consumable factor. Apply the same COGS calculation to only the free products. Combine that with some reports from your POS system, come up with a total number that becomes a line item on every recipe costing card.

Charge enough to cover whatever you gave away for free. It’s a game changer. You can break it all the way down to fryer oil and have a fryer oil consumable factor on fried foods.

Watch this video for the answer to how to charge for free food in a restaurant. You’ll learn how to come up with the cost of goods sold calculation, what reports from your POS you’ll need and how to make it all work together. Next your free product for guests will be paid for because nothing is free!

If you would like to learn more about systems for food cost controls and achieving your target cost of goods sold, read our free special report, Breaking Away from the Insanity: How to easily take control of your restaurant and make more money. Download it here. Be sure to visit our YouTube channel for more helpful restaurant business management video tips. 

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