Last month, a dark kitchen owner discovered his burger brand was losing €300 while his pizza brand generated €2,400 profit. He'd been treating both brands equally profitable, but incorrect cost allocation masked the real numbers. Calculating margin per brand reveals which concept actually drives your success.
Why margin calculation per brand matters
Running two brands from one dark kitchen means sharing rent, utilities, staff, and equipment. But each brand carries different food costs, pricing strategies, and customer demand patterns.
Without proper calculation, you're flying blind on:
- Which brand actually generates profit
- How to allocate kitchen capacity effectively
- Where marketing spend delivers returns
- Whether both concepts remain viable
⚠️ Watch out:
Many operators assume dual brands automatically double profits. But improper cost allocation can hide a loss-making brand that's draining resources from your profitable concept.
Three cost categories in dual-brand operations
1. Direct brand costs
- Ingredients specific to each menu
- Brand-specific packaging and labels
- Platform commission fees per order
2. Shared variable expenses
- Gas and electricity (allocate by cooking time)
- Generic packaging materials
- Cleaning and maintenance supplies
3. Fixed overhead costs
- Kitchen rent and utilities
- Insurance premiums
- Core staffing costs
- Equipment depreciation
Poor cost allocation represents a mistake that costs the average restaurant EUR 200-400 per month in hidden losses. Most operators split everything 50/50, but that rarely reflects actual resource usage.
Brand margin calculation formula
Margin % = ((Revenue - Direct costs - Allocated shared costs) / Revenue) × 100
The challenge lies in fairly distributing shared expenses. Three proven methods:
- Revenue-based: Brand generating 65% of sales absorbs 65% of shared costs
- Order volume: Brand with 75% of orders takes 75% of overhead
- Kitchen time: Brand using 45% of prep/cook time gets 45% allocation
💡 Example: Pizza vs. Burger allocation
Monthly performance:
- Pizza concept: €15,000 revenue, 500 orders
- Burger concept: €10,000 revenue, 250 orders
- Total shared costs: €8,000
Revenue split: Pizza absorbs 60% = €4,800, Burger takes 40% = €3,200
Platform fee allocation strategy
Each delivery platform charges different commission rates. Thuisbezorgd, Uber Eats, and Deliveroo vary significantly in their fee structures. Calculate net revenue per brand after platform deductions.
💡 Example: Commission impact analysis
Pizza order €18.00 through Thuisbezorgd:
- Gross order value: €18.00
- Platform commission 25%: €4.50
- Net revenue: €13.50
- Food costs: €5.40
- Contribution margin: €8.10
Packaging cost differentiation
Menu items require vastly different packaging solutions. A pizza needs one flat box, while burger meals demand multiple containers, sauce cups, and utensils.
- Track all packaging components per order type
- Calculate weighted average packaging costs by brand
- Include these figures in direct cost calculations
💡 Example: Packaging cost variance
- Pizza order: €0.45 (box + napkin)
- Burger meal: €0.85 (multiple containers + bag + cutlery)
Over 100 orders, this €0.40 difference adds up to €40 in cost variance!
Brand discontinuation signals
Consider eliminating a brand if:
- Margin consistently falls below 15% after optimization attempts
- Order volume represents less than 20% of total capacity
- Single-brand focus would generate higher overall profits
But first, test price increases or cost reductions before abandoning the concept entirely.
Tracking tools and systems
Excel spreadsheets become unwieldy for dual-brand tracking. Food cost management tools like KitchenNmbrs can automate brand-specific calculations and shared cost allocation.
Weekly performance reviews matter most - you need consistent data to identify which brand deserves increased marketing investment and kitchen capacity.
How do you calculate the margin per brand? (step by step)
Gather all direct costs per brand
Note separately for each brand: ingredient costs, specific packaging, platform fees per order. These are costs you can directly assign to a brand.
Calculate shared costs and divide fairly
Add up all costs both brands share: rent, gas, staff, general packaging. Divide based on revenue percentage or number of orders per brand.
Calculate margin per brand using the formula
Use: Margin % = ((Revenue - Direct costs - Share of shared costs) / Revenue) × 100. Compare both brands and focus on the most profitable brand.
✨ Pro tip
Track your kitchen time allocation for 14 days straight - most operators discover one brand consumes 70% of prep time but generates only 40% of revenue. This data transforms how you price and promote each concept.
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 VAT be included in margin calculations?
Always exclude VAT from your calculations. Platform revenue includes 9% VAT, so divide by 1.09 to determine actual usable revenue for margin analysis.
How do I split labor costs between brands?
Allocate based on actual time spent preparing each brand's orders. If pizza prep consumes 60% of kitchen time, assign 60% of labor costs to that brand. Track this over a typical week for accuracy.
What if one brand significantly outperforms the other?
Focus resources on the high-performer, but verify it's also more profitable per order. Sometimes smaller brands generate better margins despite lower volume.
Can I set different prices across delivery platforms?
Yes, and you should. If Uber Eats charges higher commissions, increase menu prices there to maintain margins. Customers rarely compare prices between platforms.
How often should I recalculate brand margins?
Weekly reviews catch trends early, but monthly deep-dives provide better strategic insights. Seasonal menu changes or platform fee adjustments require immediate recalculation.
What margin threshold indicates a failing brand?
Consistently below 15% margin signals trouble, especially if paired with declining order volume. However, consider market positioning and growth potential before eliminating concepts.
Should I factor in opportunity costs between brands?
Absolutely. If dedicating full kitchen capacity to your profitable brand would generate more total profit than running both, the weaker brand carries hidden opportunity costs.
📚 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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