What is worth more, one per cent in labour cost or one per cent in food cost?


Many years ago I did a lot of interviews with a regional manager who always asked that question when we interviewed potential restaurant level managers and general managers.  Like many of you, I would scoff at the question.  What was the purpose?  At this level, why ask such a basic question.  Surely, they are the type of candidates that would find this a simple question.  It was not a question I had in my inventory of questions.  I would move on to more difficult topics.

Fast-forward 20 years, I now ask that question.  In fact, I now ask even more basic questions around profit and loss statements, sales mix, average check, purchasing and operating expenses.  Our industry has seen an influx of independent operators and new franchise owners from other industries.  No matter the cause, there are many of these individuals have entered the industry at such a fast pace that they need help to understand some of the key numbers.  They are now in a situation where large sums of money have been invested without having all the skills and understanding to effectively action plan areas to ensure a long term profitable business.

Asking what is worth more, one per cent of labour or one per cent of food cost is now a very quick way to assess the understanding of restaurant basics and help guide ways to help them. (And yes, one per cent of labour is worth more).

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