In fast food, everything moves fast: service, decisions and sometimes mistakes. When costs soar or margins melt without warning, it's often a sign that certain management levers are slipping through the cracks. And in a sector characterized by high volumes, a large workforce and fierce competition, every detail counts. Are you a franchisee or self-employed? If so, here are 7 common mistakes to avoid if you want to stay profitable, and above all, some practical tips for boosting the profitability of your fast-food business.
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Material costs are the lifeblood of any fast-food business. Yet many restaurateurs still rely on approximate calculations, or on technical data sheets that are rarely, if ever, updated. A portion of fries that costs more than expected, a sandwich sold at a loss without knowing it - all these factors can quickly eat away at your margins.
Here's a concrete example: you estimate that your burger costs €2.80 in raw materials. You've underestimated the price increases on the cheddar or the bread, and it actually costs you €3.10. If you still sell it for €6, your gross margin will be significantly impacted.
Solution: Regularly update your technical data sheets with actual purchase prices. Use a cash register software program that can automatically adjust your costs based on data from your suppliers.
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A tray of nuggets forgotten in cold storage, a tub of sauce opened and then thrown away, a soon-to-be-expired product forgotten to be pushed to the front of the line, or an early-prepared salad never sold. Are these situations familiar to you?Â
In France, the catering sector (collective and commercial) generates around 1.08 million tonnes of food waste every year, much of which is still edible. This is a significant financial and ecological burden that can undermine your margins.
The solution: Train your teams in FIFO (First In, First Out) management, install CSD alerts in your management tools, and analyze discrepancies between products purchased and those actually sold.
👉Read also : 5 tips to boost fast-food profitability
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Striking a balance is no easy task, especially in busy periods.Â
The solution: Adopt fine-tuned inventory management, coupled with sales history analysis. Some tools, like those from Innovorder, enable you to anticipate peaks in activity according to the day, the weather or local events.
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Personnel is generally the second biggest expense after raw materials. Poor planning, under-productivity and high staff turnover are all dysfunctions that can eat away at your margins on a daily basis.
Case in point: You have two team members in the dining room during the 3 to 5 p.m. slack period, but no one to help in the kitchen during the 12:30 a.m. rush. The result is a loss of efficiency, and sometimes of sales.
The solution: Track your payroll/sales ratio by time slot. Use an intelligent schedule that adjusts staffing needs according to sales history and the weather.
👉 Also read : Restaurant ratios: how to achieve profitability?
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In an ultra-competitive sector like the restaurant business, it can be tempting to slash prices to attract customers. But if your prices don't cover your costs, every sale is actually a financial loss. Keep in mind that your target should be close to the average market margin (2-6%), below which your fast-food restaurant takes on significant financial risk.
A classic mistake: offering a full menu at €6.90, when your cost of materials is €3.50 and your staff costs €2. You have almost nothing left to cover fixed costs.
The solution: Calculate your break-even point and adjust your prices accordingly. Don't be afraid to emphasize quality, speed and customer experience to justify your prices: these are also selling points.
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An extended menu may reassure customers, but it's expensive. In production, in storage, in training and often in waste. Every extra product adds complexity to your operations.
Case in point: A fast-food restaurant adds a vegan salad in the hope of attracting new customers. But with low sales volumes, special management and a short sell-by date, this initiative can quickly turn into a dead loss.Â
The solution: Analyze the performance of each product: margin, turnover, satisfaction rate. Deplete your card and focus on the most popular products.
👉Read also : How is digitalization boosting fast-food profitability?
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Running a fast-food business "on instinct" is a bit like cooking without a recipe: it may work once, but over the long term, it can become risky. And yet data are your best allies.
You may have already experienced this situation: no clear vision of costs, no simple dashboard, no follow-up of margins by product. It's hard to act fast in these conditions.
The solution: Set up a simple dashboard with these 5 key indicators:
With a connected POS equipped with an IO Analytics system, such as Innovorder's, you can centralize all this data in real time , enabling you to manage your business with precision.
To sum up: By avoiding these 7 common mistakes, you'll have every chance of securing your margins and creating the conditions for sustainable growth, even in a sector as competitive as fast food.
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Want to optimize the management and control of your fast-food restaurant with the right tools? Find out how Innovorder can help you make easier decisions and optimize profitability.
