How do you calculate menu prices for a restaurant?

Menu prices should be calculated using the prime cost method: Prime Cost = Food Cost + Labor Cost. The recommended prime cost target is 55-60% of menu price. Use the formula: Menu Price = Food Cost / (1 - (Labor Cost % + Other Costs % + Profit Margin %) / 100). This calculator uses this method instead of the broken 3x markup rule.

What is the prime cost formula for restaurants?

Prime Cost = Food Cost + Labor Cost. This represents the two largest variable costs in a restaurant. The industry standard is to keep prime cost between 55-60% of menu price. This calculator helps you determine the optimal menu price based on your target prime cost percentage.

Is the 3x markup rule accurate for restaurant pricing?

No, the 3x markup rule is inaccurate and can destroy restaurant profits. It doesn't account for labor costs, overhead, or profit margins. The prime cost method is the industry standard used by successful restaurants. This calculator shows you the difference between 3x markup pricing and proper prime cost pricing.

What is a good food cost percentage for restaurants?

Food cost percentage varies by restaurant type: Fast food (25-30%), Casual dining (28-35%), Fine dining (30-40%), Food trucks (30-35%). However, food cost alone doesn't tell the full story. Prime cost (food + labor) should be 55-60% of menu price for healthy profitability.

How do you calculate profit margin for menu items?

Profit margin = (Menu Price - Total Costs) / Menu Price × 100. Total costs include food cost, labor cost, and other costs (rent, utilities, etc.). This calculator automatically calculates your profit margin based on your inputs and shows you if you're hitting healthy targets (typically 15-25% for restaurants).

Is this menu pricing calculator free?

Yes, this restaurant menu pricing calculator is completely free to use. No sign-up required, no hidden fees. It's based on industry-standard prime cost methodology and NRA 2025 data to help restaurants price their menus correctly.

Restaurant Menu Pricing Calculator 2025 - Free Prime Cost Calculator

Enter Your Information

Menu Item Name

Food Cost Per Item ($)

Restaurant Type

Labor Cost Percentage (%) Quick service: ~20%

15% 25% 40%

Target Prime Cost (%)

45% 55% 75%

≤55% is healthy | >60% is danger zone

Market Positioning

Desired Profit Margin (%)

5% 10% 25%

💡 Quick Reference

Quick Service Prime Cost: ~55%

Full Service Prime Cost: ~60%

Fine Dining Prime Cost: ~70%

📖 Read the Full Guide →

⚡ Quick Examples

RECOMMENDED MENU PRICE

Menu Item

Food Cost %

Prime Cost

3X Markup Rule

Calculating difference...

Profit Margin

Analyzing profitability...

Cost Breakdown

Food Cost:

Labor Cost:

Other Costs:

Net Profit:

Cost Distribution

Chart loading...

Alternative Pricing Strategies

Premium Pricing

+15% above recommended

Competitive Pricing

Match market average

Value Pricing

-10% below recommended

RECOMMENDED MENU PRICE

$0.00

Menu Item

Food Cost %

Prime Cost

3X Markup Rule

$0.00

Profit Margin

Cost Breakdown

Food Cost: $0.00

Labor Cost: $0.00

Other Costs: $0.00

Net Profit: $0.00

Cost Distribution

Alternative Pricing Strategies

Premium Pricing

+15% above recommended

$0.00

Competitive Pricing

Match market average

$0.00

Value Pricing

-10% below recommended

$0.00

Share Results

How This Calculator Works

1️⃣

Prime Cost Method

Uses the industry-standard prime cost formula (Food + Labor) instead of the broken 3x markup rule.

2️⃣

Real Restaurant Data

Based on National Restaurant Association 2025 data and proven pricing strategies from successful operators.

3️⃣

Multiple Strategies

Shows premium, competitive, and value pricing options so you can choose what fits your market.

Restaurant Menu Pricing Calculator

Enter Your Information

💡 Quick Reference

⚡ Quick Examples

Cost Breakdown

Cost Distribution

Alternative Pricing Strategies

RECOMMENDED MENU PRICE

Cost Breakdown

Cost Distribution

Alternative Pricing Strategies

Share Results

How This Calculator Works

Prime Cost Method

Real Restaurant Data

Multiple Strategies

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