Chapter 12 — Further Reading

Sources are grouped by the book's three tiers. Tier 1 is verified canonical material we can stand behind. Tier 2 is real industry practice and published work whose exact specifics we have not pinned down — attributed honestly, with ranges rather than false precision. Tier 3 is illustrative and constructed, meaning it exists in this book and nowhere else.

Tier 1 — Verified canonical

Michael L. Kasavana and Donald I. Smith, Menu Engineering: A Practical Guide to Menu Analysis (early 1980s). The origin of the framework in this chapter and of the star/plowhorse/puzzle/dog vocabulary. Worth reading in the original if you can find a copy, mainly to see how carefully the authors hedged claims that the trade press has since hardened into rules. Note that the popularity threshold and the exact quadrant naming have drifted across editions and imitators.

Roger Fields, Restaurant Success by the Numbers. The best single companion to Part III of this book. Covers item costing, pricing, and the practical mechanics of reading a product-mix report from an operator's rather than an academic's point of view.

Brown and Rowe, The Restaurant Manager's Handbook. Encyclopedic and useful as a reference rather than a read-through. Its menu chapters cover the matrix and the mechanics of running it from POS data.

Danny Meyer, Setting the Table. Not a costing book, and that is why it belongs here. Read it directly against §12.7: it is a sustained argument that the things the matrix cannot measure — why a guest chose you, what an item means in a room — are the actual business. Hold both books at once.

Your own point-of-sale documentation. Genuinely: find the vendor's technical documentation for the product-mix and menu-engineering reports, and locate three things — how the report treats comps and voids, whether modifiers roll into the parent item's unit count, and what popularity threshold the quadrant labels use. Many vendors do not disclose the third without being asked. Until you know it, you do not know what the labels mean.

The FDA Food Code, on allergen and consumer-advisory obligations that follow an ingredient substitution. Relevant here because re-costing an item is the most common way an allergen quietly changes. States and localities adopt their own versions; verify what applies where you operate.

Tier 2 — Attributed, specifics unverified

Jack Miller's cost-based menu analysis. A parallel approach that plots food cost percentage against popularity rather than contribution margin against popularity. It is real, it circulates widely, and this book thinks its vertical axis is the wrong one for the reason §12.1 gives — but you should be able to recognize it, because some software implements it and some consultants sell it.

David Pavesic's cost/margin approach. A third method that attempts to use food cost percentage and weighted contribution margin together rather than choosing between them. Reasonable in principle and harder to operate in a small restaurant. Characterized here in general terms; we have not verified the specifics of any particular formulation.

The 70% popularity threshold. Universal industry convention with, as far as we can establish, no substantial empirical basis. Treat it as a starting point, run your analysis at 70% and again at 100% of expected share, and see whether your conclusions survive both. If they don't, you have learned something important about how thin the finding was.

Industry benchmark ranges for food cost and prime cost by service style. Widely published by trade associations, accounting firms specializing in restaurants, and industry press. Useful as orientation and dangerous as a target — a coffee shop and a steakhouse share no cost structure. Always prefer ranges to point estimates, and always prefer your own trailing numbers to anyone's benchmark.

Restaurant trade press on value-menu economics and franchisee pricing disputes (Nation's Restaurant News, Restaurant Business, QSR Magazine). The public record behind Case Study 1. Franchisee association statements and litigation coverage are the most useful primary-ish material; treat individual franchisee margin claims as advocacy rather than audited fact.

Menu psychology and layout research. Chapter 10 covered this; it is directly relevant here because "reposition it on the page" is the second step of §12.8's action ladder. Findings on panel position, price formatting, and item description effects are real but frequently overstated in the trade press, with small samples and inconsistent replication. Test on your own menu before you believe an effect size.

Bureau of Labor Statistics and National Restaurant Association data on foodservice cost structures and industry scale. Institutions worth knowing; use published series rather than second-hand figures.

Tier 3 — Illustrative and constructed

Bellwether, the 68-seat progressive project. Every figure in this chapter — the five entrées, their plate costs, their prices, their weekly unit counts, the 330 units, the $8,739.00 in entrée sales, the $2,447.98 of ideal cost, the $6,291.02 of contribution margin, and the $19.06 weighted average — is constructed for teaching and internally consistent. It is not a real restaurant's records.

The Hearth Chicken cost card ($8.52 plate cost, $29.00 price, 29.4% food cost, $20.48 contribution margin), carried forward unchanged from Chapter 11, along with the March poultry-renewal scenario built against it.

The whole-bird program diagram (Figure 12.6) showing six sellable lines from one purchase order. Constructed to illustrate cross-utilization; a real program's yields and uses would differ.

The station-throughput figures in §12.7 (40 chickens and 22 squash plates per station-hour). Explicitly illustrative — real capacity comes from your own ticket-time measurement in Chapter 14.

The beverage-attachment scenario in §12.7 ($14.00 glass at 22% pour cost, $7.00 beer at 24%). Illustrative assumptions used to demonstrate that an omitted variable can reverse a two-variable model. Measure your own.

The lunch menu in Exercise 12.26 and the trout-substitution assumptions in §12.5, both labeled where they appear.

Case Study 2, "The Menu That Engineered Itself to Death" — a labeled composite built from patterns that recur across independent full-service restaurants. No real restaurant's financials are represented, and the file says so at the top.

Where this goes next

• Chapter 13 — Purchasing and Inventory. The plate costs on the vertical axis are set at the loading dock. Specs, par levels, receiving, and the count sheet turn ideal food cost into real food cost.
• Chapter 14 — Kitchen Operations. Ticket times and station load are the labor axis this chapter does not have.
• Chapter 15 and 16 — Bar, Beverage, and Wine. The matrix works on cocktails and by-the-glass wine, and beverage attachment is the omitted variable that can reverse an entrée ranking outright.
• Chapter 24 — Revenue Management. Contribution margin per seat-hour, which is the version of this analysis that finally accounts for the thing you are actually renting.
• Chapter 32 — Break-Even Analysis. Where the weighted contribution margin computed here becomes the denominator that tells you how many guests you need through the door.