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I recall famous chef / restauranteur, possibly Gordon Ramsay, giving a bare minimum sale price of 4x the raw ingredient price for profitability. Assuming the $
by TAForObvReasons 7y ago
I recall famous chef / restauranteur, possibly Gordon Ramsay, giving a bare minimum sale price of 4x the raw ingredient price for profitability. Assuming the $0.06 estimate, $1.20 would imply a price of at least $4.80, pretty close to the $5.00 price
- elil17 7y agoBut McDonalds has much smaller overheads than other restaurants because the food is largely prepared and the prep work that does need to be done has been engineered to be easy
- komali2 7y agoNugs might be as close to loss leader as McDonald's gets?
- greedo 7y agoUh no. The average franchise takes home 10% or so of sales before tax.
- elil17 7y ago3-5% is the average profit margin for a restaurant. Also, the profit for the franchise owner is not the same as the total profit. McDonalds as a corporation is charging the franchisee licensing fees (and often rent as well), which should also be considered part of the profit. Source: https://pos.toasttab.com/blog/average-restaurant-profit-margin https://pos.toasttab.com/blog/average-restaurant-profit-marg...
- greedo 7y agoBut that profit doesn't accrue to the franchisee, who is the one paying for equipment and labor. Franchise fees are a cost to him/her.
- andreareina 7y ago3x is what I hear most often.
- wiredfool 7y agoWhat I learned is 30 30 30 10, for food cost, overhead, labor, and profit. There’s wiggle room on the numbers, but missing on one of them generally nukes the profit.