A buy-one-get-one promotion can wipe out your entire profit if you don't calculate correctly. Many entrepreneurs think they still make profit at 50% discount, but forget that their food cost percentage doubles. Here's exactly how to calculate if your promotion will actually make money.
Why buy-one-get-one promotions are dangerous
With a buy-one-get-one promotion you give away two dishes for the price of one. Your revenue gets cut in half, but your costs double. This means your food cost percentage doesn't become 30%, but 60%.
⚠️ Watch out:
Many entrepreneurs think: "I have 30% food cost, so at 50% discount I still have 20% left." This is wrong! With buy-one-get-one your food cost becomes 60%, not 15%.
The formula for buy-one-get-one profitability
To check if your promotion will work, use this formula:
Break-even food cost = (Normal food cost × 2) + Other costs %
Your other costs include staff, rent, energy and other fixed expenses. For restaurants this typically runs 45-55% of revenue.
💡 Example:
Your main course normally has:
- Selling price: €24.00 excl. VAT
- Food cost: €7.20 (30%)
- Other costs: €12.00 (50%)
- Profit: €4.80 (20%)
With buy-one-get-one:
- Revenue: €24.00 (for 2 dishes)
- Food cost: €14.40 (2 × €7.20)
- Other costs: €12.00
- Loss: €2.40 per promotion!
Most buy-one-get-one promotions lose money
A buy-one-get-one promotion only works if your food cost stays below 25%. At higher food cost percentages you lose money on every single promotion. And that's the kind of thing you only learn after closing your first month at a loss.
- Food cost 20%: Break-even at 90% occupancy
- Food cost 25%: Break-even at 100% occupancy
- Food cost 30%: Always a loss
- Food cost 35%: Major loss
Alternative promotions that actually work
Instead of buy-one-get-one you can choose promotions that don't destroy your margins:
💡 Better alternatives:
- 25% discount: Food cost rises to 40% (at 30% baseline)
- Free drink: Low food cost, high perceived value
- Free appetizer: Choose one with low cost price
- Happy hour pricing: Time-limited, less impact
Calculate the monthly damage
Don't just calculate per dish - look at the impact on your entire month:
Monthly impact = Loss per promotion × Number of promotions × 30 days
💡 Example monthly impact:
At €2.40 loss per promotion and 10 promotions per day:
- Daily loss: €24.00
- Monthly loss: €720.00
- Annual loss: €8,640.00
This can wipe out your entire profit margin!
Track your numbers during the promotion
Monitor these metrics while your promotion runs:
- Daily revenue vs. normal days
- Number of covers vs. revenue per guest
- Total food cost percentage for the day
- Extra costs from busy periods (overtime, extra ingredients)
⚠️ Watch out:
Don't just measure revenue, but also your total costs. A full restaurant with loss-making promotions makes you poorer, not richer.
How do you calculate if your buy-one-get-one promotion is profitable?
Calculate your current food cost percentage
Add up all ingredient costs of your main course and divide by the selling price excluding VAT. Multiply by 100 to get the percentage.
Calculate your break-even point
Multiply your food cost by 2 and add your other costs (usually 45-55%). If this exceeds 100%, you lose money.
Calculate the monthly impact
Multiply the loss per promotion by the expected number of promotions per day and by 30. This gives you the total monthly impact on your profit.
✨ Pro tip
Run a 3-day test first and track your exact profit per promotion. If you're losing more than €1.50 per promotion, kill it immediately.
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
Can I make buy-one-get-one work by using cheaper ingredients?
Only if your food cost drops below 25%. But be careful not to compromise quality too much, because then you'll lose customers in the long run.
What if expensive wines are included in the promotion?
Beverages often have lower food cost (18-25%). If guests order expensive wine with the promotion, you can offset the loss on food. But most guests won't order premium wines during discount promotions.
How do I calculate VAT on buy-one-get-one promotions?
VAT stays 9% on the actual price paid. With buy-one-get-one you pay 9% VAT on the price of one dish, not two.
📚 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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