Prime cost is the number that decides
Prime cost, food and beverage cost plus fully loaded labour, is the closest thing a restaurant has to a verdict. Loaded means everything: wages, vacation pay, CPP, EI, WSIB premiums, and Employer Health Tax once payroll clears the exemption. The working rule most full-service operators use puts the combined figure in the low-to-mid sixties as a share of sales, with quick service lower still, because everything above that line has to cover rent, utilities and you.
The value is in the frequency, not the target. Our Fractional CFO engagement turns prime cost from an annual verdict into a weekly gauge: POS sales, supplier invoices and payroll feed a flash report close enough to the shifts that caused it to change next week's ordering and roster. The two halves also have to be read together, because the menu trades between them. A scratch-pasta program buys a low food percentage with prep hours; pre-cut proteins flip the trade, and judging the kitchen on food cost alone punishes exactly the wrong choices.
Menu engineering in margin dollars
Menus are engineered on contribution margin, the dollars a plate leaves behind, not the percentage it costs. A striploin at 40% food cost leaving $16 a plate out-earns an appetizer at 25% leaving $6, and a menu managed to percentages will promote the wrong item every time. Cross each item's contribution with its share of the POS product mix and the whole menu sorts into four quadrants, each with its own move:
| Menu quadrant | The move |
|---|---|
| Popular, high margin | Protect it: spec, plating, placement, never discounted |
| Popular, low margin | Re-cost the recipe or take a measured price step |
| Unpopular, high margin | Rename it, move it on the page, put it in the server patter |
| Unpopular, low margin | Cut it, or rework it into a special |
We re-cost recipes against current invoice prices every quarter, because ingredient inflation quietly rewrites the quadrants: last spring's winner can be this autumn's margin leak without a single word on the menu changing.
Each delivery channel earns its keep, or it goes
The CFO question on Uber Eats, DoorDash and SkipTheDishes is not how the fees are recorded but whether each channel still contributes after commission tiers that can reach 30% of the ticket, plus packaging, refunds and the promotions the apps push you to fund. We build a monthly channel view: contribution per order, average ticket, and how much of the volume is genuinely incremental versus your own dining room ordering from the couch.
The levers follow from the numbers. Platform-specific menu pricing where the agreement allows it. A delivery menu trimmed to the items that travel well. A direct-ordering path for regulars, where the commission collapses into a card fee. And occasionally the decision the numbers force: leaving a platform whose orders were mostly your own guests wearing a different hat.
The second location, priced the way a lender prices it
Unit two should be underwritten like a credit application, because that is what it will become. The internal test comes first: has prime cost held steady through two full seasons, does the room run for a week without you in it, and does cash actually accumulate after debt service and owner pay? If the answer is yes, we build the external package: two years of statements, current interims, a projection whose assumptions are written down and defensible, and the proposed lease terms.
This is home ground. Walla Assaf came to public practice from banking and corporate finance, and our lender packages are written the way credit files are read. Statements carry more weight prepared through Compilation & Review Engagements, Business Financing Advisory shapes the ask and the lender shortlist, and the Canada Small Business Financing Program, with loans up to $1.15 million that can fund leasehold build-outs and kitchen equipment, is often the right vehicle for the fit-out.
What the cadence looks like
Weekly, the prime-cost flash. Monthly, a channel-level profit review, dine-in, bar, takeout and delivery against budget. Quarterly, the menu re-cost and pricing pass. Annually, the budget, and when it is time, the second-location model. It is the finance rhythm of a restaurant group, sized for a single room, for operators across Mississauga and the GTA. Scope and fee are quoted in writing after a free 15-minute discovery call, so the cost of the CFO seat is known before it starts.
