New dishes can make or break your profit. Many restaurants add dishes to the menu without knowing the exact cost price, causing them to lose money unknowingly. An approval system prevents dishes with too high food costs from undermining your margin.
Why cost price approval is essential
Every chef has creative ideas. But not every creative dish is profitable. Without controlling costs, these problems arise:
- Dishes with 40%+ food cost that eat away your profit
- Expensive ingredients without price markup
- Inconsistent margins between dishes
- Surprises at month-end closing
⚠️ Note:
A dish with 5% higher food cost costs you €150 extra per 100 portions per month. Per year: €1,800 on a single dish.
Setting up the approval system
A workable system has three elements: cost price calculation, approval criteria, and a digital process. This prevents dishes from landing on the menu without oversight.
Step 1: Standardize cost price calculation
Every cost price calculation must contain the same elements:
- All ingredients including garnish and sauces
- Current purchase prices (not estimates)
- Cutting loss and waste factored in
- Portion size precisely defined
💡 Example cost price calculation:
New truffle pasta:
- Pasta: €0.80
- Truffle (5g): €4.50
- Parmesan: €1.20
- Butter, herbs: €0.90
Total cost price: €7.40
Step 2: Define approval criteria
Set clear criteria for when a dish gets approved:
- Maximum food cost: for example 32% for main courses
- Minimum margin: for example €12 profit per dish
- Market conformity: selling price fits your concept
- Operational feasibility: kitchen can execute it
💡 Example approval:
Truffle pasta cost price €7.40:
- At €28.00 menu price (excl. VAT €25.69): food cost 28.8% ✓
- Margin per dish: €18.29 ✓
- Price fits restaurant level ✓
Approval: YES
Step 3: Digital approval process
Make the process easy and traceable:
- Chef enters cost price digitally (no Excel)
- System automatically calculates food cost percentage
- Manager immediately sees if criteria are met
- Approval is registered with date
Who approves and when?
Determine who has final responsibility. In small restaurants that's usually the owner. With multiple locations it can be the head chef or manager, but always with clear criteria.
⚠️ Note:
Don't give everyone approval rights. One person is responsible, others can make suggestions.
Exceptions and flexibility
Sometimes you want a dish with higher food cost intentionally, like a signature dish or to attract guests. Make conscious choices:
- Document why you deviate from criteria
- Compensate with profitable side dishes
- Limit the number of exceptions
- Regularly evaluate if it works
💡 Example exception:
Signature dish with 38% food cost:
- Reason: attracts new guests, Instagram-worthy
- Compensation: promote profitable side dishes
- Evaluation: review after 3 months
This way you stay conscious of your choices.
Implementation in practice
Start small and build the system gradually. Begin with your 5 best-selling dishes and then apply the system to new creations. This way you learn the process without disrupting your kitchen.
An app like KitchenNmbrs can automate this process. You enter ingredients and quantities, the system calculates the cost price and food cost percentage. Approvals are saved, so you can later see why certain choices were made.
How do you build a cost price approval system? (step by step)
Set approval criteria
Determine your maximum food cost percentage (for example 32% for main courses) and minimum margin per dish. Write down these criteria and communicate them to your kitchen team.
Create a cost price template
Create a fixed format where all ingredients, quantities, and prices are entered. Make sure cutting loss and garnish are always included in the calculation.
Implement the approval process
Every new dish must go through the system before it goes on the menu. Chef calculates cost price, manager checks criteria, and only after approval can the dish be sold.
✨ Pro tip
Start with one day per week when new dishes can be tested, but only after cost approval. This way you build the routine without disrupting daily operations.
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
What if a dish slightly exceeds the food cost criteria?
First see if you can adjust the portion size or use a cheaper alternative ingredient. If that doesn't work, raise the selling price or consciously accept the lower margin.
How often should I recheck the cost prices?
Check at least every 3 months if the purchase prices are still correct. With major price increases from suppliers, you must recalculate immediately and possibly adjust your menu price.
Can I use the approval system for existing dishes too?
Yes, start with your 10 best-selling dishes. Calculate their actual cost price and see if they still meet your criteria. This often reveals hidden loss-makers.
What if my chef wants to stay creative without constantly dealing with numbers?
Let creativity and numbers work together. Chef designs the dish, you check the numbers. If the cost price is too high, you find solutions together without losing flavor.
Do I need to run seasonal dishes through this system too?
Absolutely, especially seasonal dishes have fluctuating ingredient prices. Calculate the cost price based on expected seasonal price, not the current price outside the season.
📚 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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