Virtual brands running from your existing kitchen create additional revenue streams, but their margin calculations differ significantly from your regular menu. Platform fees, packaging costs, and altered operations change the entire cost structure. You need a completely different approach to determine real profitability.
What is a virtual brand?
A virtual brand operates as a separate concept from your existing kitchen, selling exclusively through delivery platforms. Think launching a pizza brand alongside your Italian restaurant, or adding a poke bowl concept to your Asian establishment.
Margin calculations differ because you:
- Pay platform fees (15-30% of your order value)
- Have extra packaging costs
- Possibly use different ingredients
- Have different operational costs
The full cost price of a virtual brand
Virtual brands require calculating more than just ingredient costs. You're also accounting for:
💡 Example: Poke bowl virtual brand
Sales via Thuisbezorgd for €14.50 per bowl:
- Ingredients: €4.20
- Packaging (bowl + lid + bag): €0.45
- Platform fee 25%: €3.63
- VAT 9%: €1.20
Net revenue: €5.02 per bowl
Total cost price = Ingredients + Packaging + Platform fee
Using our example: €4.20 + €0.45 + €3.63 = €8.28
Calculating margin on virtual brands
The formula becomes:
Margin % = ((Sales price - Total costs) / Sales price) × 100
Where total costs = ingredients + packaging + platform fee
💡 Example calculation:
Poke bowl €14.50:
- Sales price: €14.50
- Total costs: €8.28
- Profit per bowl: €6.22
Margin: (€6.22 / €14.50) × 100 = 42.9%
This appears high, but remember you've still got fixed costs like rent, staff and utilities to cover.
Pitfalls with virtual brands
⚠️ Watch out:
Many operators forget to include platform fees in their calculations. This oversight inflates your margin by 25% compared to reality - a mistake that costs the average restaurant EUR 200-400 per month in miscalculated pricing decisions.
Other frequent mistakes:
- Underestimating packaging costs: Quality packaging runs €0.30-0.60 per dish
- No separate VAT calculation: Platforms withhold VAT, but you still owe it to tax authorities
- Forgetting kitchen strain: Extra orders create additional pressure
- Ignoring return costs: Complaints cost you the full order value
Break-even point for virtual brands
Breaking even requires margins that cover your fixed costs. For most restaurants this runs around 15-25% of revenue.
💡 Example break-even:
Your fixed costs are 20% of revenue:
- Poke bowl margin: 42.9%
- Fixed costs: 20%
- Net profit: 22.9%
This virtual brand is profitable
Tools for margin tracking
Manual margin tracking per virtual brand consumes considerable time. Especially with multiple platforms (Thuisbezorgd, Uber Eats, Deliveroo) having different fee structures.
Food cost calculators calculate total costs per recipe, including packaging. You'll immediately see if your virtual brand generates profit.
How do you calculate the margin of your virtual brand? (step by step)
Gather all cost items
Note the ingredient costs per dish, packaging costs (container, lid, cutlery, bag) and the platform fee percentage of each delivery platform. Don't forget any extra costs like special sauces or garnishes.
Calculate the total cost price
Add ingredients, packaging and platform fee together. For example: €4.20 ingredients + €0.45 packaging + €3.63 platform fee = €8.28 total costs per dish.
Determine your margin percentage
Subtract the total costs from your sales price and divide by the sales price. Multiply by 100 for the percentage. Check if this is above your break-even point of approximately 20-25%.
✨ Pro tip
Track your top 3 virtual brand dishes weekly for the first 8 weeks after launch. Early pricing adjustments prevent profitability issues that usually surface months later during financial reviews.
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 VAT in my margin calculation?
No, always calculate using prices excluding VAT. Platforms withhold 9% VAT from your payout, but you're still responsible for paying it to tax authorities.
What's a realistic margin for a virtual brand?
After platform fees and packaging you typically have 35-50% margin remaining. This seems high, but fixed costs like rent and staff must still come from this amount.
How often should I adjust my prices?
Review your ingredient prices and platform fees monthly. Suppliers regularly increase prices, and platforms sometimes adjust their fees with minimal notice.
Can I maintain the same margin as my main restaurant?
No, virtual brands operate with different cost structures due to platform fees and packaging. Calculate with 10-15% lower margins than your main restaurant to remain realistic.
📚 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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