Prime cost

Definition

Food and beverage cost plus total labor, the two biggest controllable costs in a restaurant.

Why It Matters

This decides whether a restaurant makes money at all. Much above the low sixties as a share of sales and there is little left for rent, let alone profit, which makes it the first line to verify and the clearest read on how the place is run. Check it month by month rather than annually, since a seasonal business can hide a bad quarter in a good year, and ask whether the owner is working a station, because their unpaid labor is in that number.