Too many restaurants lose money on breakfast and lunch deals while thinking they're profitable. Most owners calculate ingredient costs and call it done. But true profitability means accounting for every expense that hits your bottom line.
What does a deal really cost?
Most owners obsess over ingredient expenses and ignore everything else. Here's what actually matters:
- Ingredient costs - what you buy for the dish
- Labor costs - time spent by your staff
- Fixed costs - rent, energy, depreciation
- Profit margin - what's left over
A deal that covers only ingredients will slowly bleed your business dry.
💡 Example:
Breakfast deal for €7.50 (incl. 9% VAT):
- Bread roll, toppings, coffee: €2.10
- Selling price excl. VAT: €6.88
- Food cost: 30.5%
Looks great on paper, but what about wages and actual profit?
Calculate your total costs per guest
You need every single expense mapped out:
Step 1: Calculate food cost
Include every ingredient, down to the garnish and condiments.
Step 2: Estimate labor costs
How many minutes does prep and service take? From years of working in professional kitchens, I calculate €25-30 per hour total labor costs (wages plus employer contributions).
Step 3: Allocate fixed costs
Standard rule: 15-25% of your revenue needs to cover rent, utilities and other fixed expenses.
💡 Example calculation:
Lunch deal €9.50 (€8.72 excl. VAT):
- Ingredients: €2.80
- Labor (8 min × €0.45/min): €3.60
- Fixed costs (20% of €8.72): €1.74
- Total costs: €8.14
Profit: €8.72 - €8.14 = €0.58 (6.7%)
Calculate minimum selling price
Want a healthy profit margin of 15-20%? Work backwards from your actual costs:
Formula:
Minimum price = Total costs / (1 - desired profit margin)
⚠️ Note:
Most owners completely ignore labor costs. A deal requiring 5 extra minutes of work needs to generate €2-3 more revenue to stay profitable.
Alternative options for better margins
If your deal's underwater, try these fixes:
- Raise the price - test if guests accept €1-2 more
- Adjust ingredients - find cheaper alternatives without killing quality
- Reduce portion size - smaller rolls or fewer toppings
- Combine with profitable items - push high-margin beverages and sides
💡 Example optimization:
Breakfast deal from €7.50 to €8.50:
- Extra revenue: €1.00
- At 50 deals per week: €2,600 extra per year
- Costs stay exactly the same
Most guests won't even notice small price bumps.
Monitor your results
Track these numbers weekly:
- Number of deals sold
- Average add-on purchase per deal guest
- Total margin on deal plus add-ons
- Comparison with regular menu performance
Food cost calculators help track these metrics automatically, so you can spot unprofitable deals before they damage your bottom line.
How do you calculate the profitability of your deals?
Calculate all ingredient costs
Add up all ingredients in your deal. Don't forget beverages, garnish and sauces. These are your direct food costs.
Calculate labor costs
Measure how many minutes it takes to prepare the deal. Multiply by €0.45 per minute (€27/hour total labor costs). This gives you labor costs per deal.
Add fixed costs
Take 20% of your selling price (excl. VAT) for fixed costs like rent and energy. Add up all costs and subtract from your selling price to get your actual profit.
✨ Pro tip
Track your breakfast versus lunch deals separately over 4 weeks - breakfast deals typically generate 40% more beverage add-ons than lunch deals. This difference often transforms a marginal breakfast deal into your most profitable daypart.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
Should I include labor costs in my deal calculation?
Absolutely. A deal requiring 5 extra minutes of prep needs to generate €2-3 more revenue to cover your labor costs. Skip this step and you're literally working for free.
What's a healthy profit margin on breakfast and lunch deals?
Target minimum 15-20% profit margin after all costs. Deals with less than 10% profit will drain your resources through extra admin and marketing efforts.
How often should I review my deal pricing?
Check monthly if your deals stay profitable. Ingredient prices shift constantly, and labor costs increase with wage agreements.
What if customers leave when I raise prices?
Test small increases of €0.50-1.00 first. Most guests accept this without complaint. Better to sell 40 profitable deals than 50 money-losers.
Can I use loss-making deals to attract new customers?
Only if you profit on add-ons. A losing deal makes sense only when guests average €5+ in additional purchases with decent margins.
How do I factor in weekend premium wages for breakfast deals?
Weekend labor often costs 25-50% more than weekdays. Most operators find weekend deals need €2-3 higher pricing to maintain the same profitability as weekday offerings.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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