Restaurant CFO services: prime cost decides whether anything else matters

Prime cost is a weekly number, not a monthly one

Add your cost of food and beverage sold to your full labour bill — wages, employer CPP and EI, WSIB, benefits — and divide by sales: that is prime cost, the share of every dollar spent before rent or anything else gets paid. The traditional benchmark says to hold it somewhere around 60 per cent of sales, but the benchmark matters less than the trend, and the trend only shows up if you measure weekly. The reason is structural: the two levers that move prime cost — supplier orders and staff schedules — are both written weekly, so a monthly report arrives after four rounds of decisions it could have improved.

Weekly prime cost needs daily sales entries and regular counts underneath it, which is exactly the workflow on our restaurant bookkeeping page. CFO work is what happens once those numbers exist: spotting the drift, finding which lever moved, and fixing it while the month is still alive.

Menu engineering: every item earns its place or loses it

Menu decisions run on two facts per item: contribution margin (price minus plate cost) and popularity (sales mix from the POS). Crossing them sorts the menu into four boxes — high-margin sellers to protect and feature, popular but thin items to reprice or re-cost, profitable laggards to reposition or rename, and items failing on both counts that are occupying kitchen complexity for nothing. Targeted repricing from this grid consistently beats across-the-board increases, because it concentrates change where guests are least price-sensitive.

The quiet prerequisite is current plate costs. A recipe costed on last winter's supplier prices produces margins that are fiction, so plate costing gets refreshed on a schedule, not once at menu launch.

Cash and seasonality get managed on the same rhythm

Restaurants earn unevenly — patio months, December parties, the January trough — while rent, loan payments, and salaried staff cost the same every week. The monthly CFO package puts that mismatch on paper: a rolling thirteen-week cash view, the debt schedule with its covenants, and a capex line for the kitchen equipment that will eventually fail, always at the worst moment. An owner who can see February's cash position from October stops financing the slow season on a credit card.

The same review prices decisions as they arrive — a patio build, a catering hire, extended hours. Each becomes a small model run against your own margins instead of a hunch.

The second location: model it before you sign anything

A second restaurant is not the first one doubled — it is a new business plus a management problem, financed by the original. Before a lease gets signed, the model has to answer these:

The readiness test is not profitability alone — it is whether the first location runs on systems and a manager rather than on you. If your presence is still the operating system, expansion exports the bottleneck.

Franchise or independent: what the royalty actually buys

A franchise trades margin for certainty: an upfront fee, ongoing royalties, and ad-fund contributions buy a proven menu, brand demand from day one, purchasing power, and operating systems you did not have to invent. Independence keeps those points of sales but funds its own learning curve, menu development, and marketing from scratch. The right comparison is franchise unit economics after royalties and mandated capital spending, set against your independent concept's actual numbers — not its best month.

Franchisees of American brands carry one extra layer: royalty and ad-fund payments flowing to a US franchisor come with Canadian withholding-tax obligations and gross-up clauses buried in the franchise agreement. That side lives on our cross-border tax page for restaurant owners, and it belongs in the unit economics before you sign, not after the first remittance letter.