Food Cost Isn't Everything

The Famous 30/30/30 Rule

When I attended culinary school, one concept was drilled into our heads over and over again.

Roughly speaking:

30% Food

30% Labor

30% Occupancy and Operating Expenses

10% Profit

It's an elegant way to explain restaurant economics, and it's a great place to start learning.

The problem is that every restaurant is different.

A downtown Chicago steakhouse doesn't have the same financial model as a family diner.

A quick-service burger joint doesn't have the same expenses as a fine dining restaurant.

And an owner-occupied building changes the math entirely.

The Biggest Expense Most Restaurants Have

For many independent restaurants, rent is one of the largest fixed expenses.

Recent industry data shows that occupancy costs—including rent, property taxes, insurance, and building-related expenses—typically consume around 5–6% of sales for full-service restaurants, although that number can climb significantly in expensive markets.

If you're writing a rent check every month, your menu prices have to recover that money.

You have no choice.

What Happens If You Don't Pay Rent?

This is where my situation becomes a little unusual.

My long-term plan has always been to own the building before opening G&C BBQ Company.

That doesn't mean the building is "free."

Far from it.

I'll still have:

Property taxes

Insurance

Maintenance

Repairs

Utilities

Capital improvements

Equipment replacement

Buildings are expensive.

But I won't be writing a monthly rent check to someone else.

That changes the financial equation.

Could G&C Run a 40% Food Cost?

Maybe.

And that's a question I've spent a surprising amount of time thinking about.

Traditional restaurant wisdom would immediately say no.

But I'm not convinced the answer is that simple.

If my occupancy costs are substantially lower than a comparable restaurant leasing space downtown, why couldn't I intentionally spend more on ingredients?

Why couldn't I serve larger portions?

Why couldn't I buy Prime brisket instead of Choice?

Why couldn't I use premium cheeses, fresh bakery bread, better produce, or thicker-cut bacon?

Customers don't remember percentages.

They remember value.

If they walk away saying, "That was the best $20 sandwich I've ever had," then I've created something much more important than a textbook food-cost percentage.

The Goal Isn't the Lowest Food Cost

This might sound strange coming from someone who has spent months calculating ingredient costs down to the gram.

But my goal isn't to have the lowest food cost.

My goal is to build the best restaurant.

Sometimes those two ideas overlap.

Sometimes they don't.

A brisket sandwich with a 28% food cost isn't automatically better than one running at 36%.

Likewise, a sandwich at 40% food cost isn't sustainable if it leaves no money to pay the staff or maintain the building.

The percentage is only meaningful when viewed alongside every other expense.

What About Oconomowoc?

Oconomowoc isn't Chicago.

It's a community that appreciates quality but also expects value.

People aren't looking for tiny portions arranged with tweezers.

They're looking for a meal that feels generous.

They're looking for consistency.

They're looking for a place they'll happily return to next weekend.

I haven't found any evidence that successful independent restaurants in communities like Oconomowoc operate under dramatically different food-cost targets than the rest of the industry. Most still aim somewhere in that 30–35% range because labor, utilities, insurance, and all the other costs don't magically disappear.

But every business has advantages.

Some negotiate incredible vendor pricing.

Some have exceptional alcohol sales.

Some have high volume.

Mine, hopefully, will be owning the building.

If that advantage allows me to put another dollar's worth of brisket on every plate, or use noticeably better ingredients than my competition, I think that's a trade worth making.

My Philosophy

I don't want G&C BBQ Company to become known as the restaurant with the lowest food cost.

I want it to become known as the place where people leave saying:

"I can't believe how much food we got for the money."

If that means running a food cost that's a few percentage points higher than the industry average—because I chose to invest in the customer instead of sending a rent check every month—that isn't a failure.

That's the business model working exactly the way I designed it.