Restaurants Industry Terminology

ABV (Alcohol by Volume)

A measure of the alcohol content of a beverage, expressed as a percentage of total volume.

The cocktail menu lists ABV for each drink to help guests pace themselves.|Our hard seltzer is 5% ABV, so we can offer it during lunch specials.|Compliance requires the label to display the ABV for canned cocktails.|

A la carte

Pricing approach where each menu item is charged separately, rather than as part of a fixed-price bundle.

We switched from a prix fixe to an a la carte menu to increase average check.|Guests can order sides a la carte instead of the combo.|Banquet pricing has both a la carte and per-person packages.|

Allergen cross-contact

Unintentional transfer of allergen proteins from one food or surface to another, creating a risk for allergic guests.

Use separate fryers to prevent allergen cross-contact with gluten-free items.|The HACCP plan outlines steps to avoid peanut cross-contact.|Add an allergen note to the POS so the kitchen avoids cross-contact.|

Average check (Average ticket, PPA)

Average revenue per guest, calculated as total sales divided by the number of covers; also called per person average (PPA).

Our average check rose to $32 after the dessert feature.|Servers are trained to upsell to lift PPA by $2.|We track average check by daypart to plan staffing.|

Back of House (BOH)

Kitchen, prep, storage, and all non-guest-facing areas and teams in a restaurant.

BOH is short-staffed; we need another line cook tonight.|The BOH is responsible for prep, cooking, and dish.|BOH-to-FOH communication improved after we added an expo.|

Beverage Cost Percentage

The ratio of beverage COGS to beverage sales, used to manage bar profitability.

Our beer cost is 22% and cocktails are running at 18% beverage cost.|Raising pour size increased beverage cost percentage above target.|We standardized recipes to reduce beverage cost variance.|

Break-even point (BEP)

The sales level at which total revenue equals total costs, resulting in zero profit or loss.

We hit break-even at $14,000 in weekly sales.|The new patio reduces our BEP by spreading fixed costs.|Menu price increases moved our break-even forward by two weeks.|

COGS (Cost of Goods Sold)

Direct cost of ingredients and beverages used to produce items sold during a period.

Weekly food COGS came in at 29.8% of sales.|Tighten portioning to lower COGS without hurting quality.|We separate food and beverage COGS to track margins.|

Commissary kitchen

A centralized production facility that supports one or multiple restaurant units, often for prep, catering, or delivery-only concepts.

Our ghost brands prep sauces at the commissary kitchen each morning.|The group uses a central commissary to portion proteins for all units.|Commissary production lowered unit-level labor and waste.|

Covers

A count of guests served; used to measure volume and capacity utilization.

We did 240 covers last night with an average check of $38.|The patio added 40 potential covers per seating.|Track covers by hour to forecast labor.|

CRM (Customer Relationship Management)

Systems and processes to collect, store, and use guest data for marketing, personalization, and loyalty.

We use CRM to segment guests for birthday offers.|CRM data shows lapsed VIPs; send a reactivation campaign.|Integrate POS with CRM to capture visit history.|

Cross-utilization

Using ingredients across multiple menu items to reduce waste, simplify inventory, and improve profitability.

We cross-utilize roasted peppers in the pasta, flatbread, and omelet.|Cross-utilization reduces dead stock and improves margins.|Menu engineering highlights items that enable cross-utilization.|

Delivery aggregator (Third-Party Delivery Marketplace)

A platform that lists restaurants and facilitates ordering and delivery (e.g., marketplace apps), typically charging commissions and fees.

We listed our menu on two delivery aggregators to expand reach.|Aggregator fees are 20–30%, so we adjusted pricing.|Integrate aggregators with POS to reduce order errors.|

Dynamic pricing

Adjusting menu prices by time, channel, or demand to optimize revenue and capacity.

We use dynamic pricing to discount late-night items on delivery apps.|Happy hour is a form of time-based dynamic pricing.|Seat-fill promos apply dynamic pricing to low-demand periods.|

EBITDA

Earnings before interest, taxes, depreciation, and amortization; a proxy for operating profitability.

Our EBITDA margin improved 200 bps after renegotiating rent.|Investors evaluate franchise performance on EBITDA.|Normalized EBITDA excludes one-time remodeling costs.|

Eighty-six (86)

Industry slang meaning an item is unavailable or a request/order should be canceled or removed.

Eighty-six the mussels—we're out until tomorrow.|86 the modifier 'add bacon' on kids' meals per policy.|We had to 86 that ticket by mistake; re-ring it correctly.|

Expo (Expediter)

The role or station that manages the pass, verifies plate quality and timing, and coordinates communication between kitchen and service.

The expo coordinates plates and fires entrees on time.|We staffed an expo on weekends to cut ticket times.|Allergen tickets go through the expo for final check.|

FIFO (First In, First Out)

An inventory rotation method where the oldest stock is used first to maintain freshness and reduce waste.

Rotate dairy FIFO to prevent spoilage.|Label prep with dates to enforce FIFO.|The walk-in layout supports FIFO on produce bins.|

FOH (Front of House)

Guest-facing areas and staff in a restaurant, including dining room, bar, and host stand.

FOH includes hosts, servers, and bartenders.|We trained FOH on allergy protocols.|FOH/BOH pre-shift improved communication.|

Food cost percentage

The ratio of food COGS to food sales, indicating menu and kitchen cost efficiency.

Food cost ran high at 33% due to steak mix.|Portion scales helped bring food cost back to target.|We track food cost percentage weekly by category.|

Forecasting

Predicting future sales, covers, labor, and product needs using historical data and external factors.

Use last year’s comps and weather to forecast covers.|Forecasting drives prep lists and labor schedules.|Our model forecasts delivery orders by hour.|

Ghost kitchen

A delivery- or pickup-only kitchen with no dining room, often hosting multiple virtual brands.

We launched a ghost kitchen brand to capture late-night delivery.|Ghost kitchens reduce occupancy costs by skipping dine-in.|The ghost kitchen operates from our commissary after 5 pm.|

Gross profit

Sales minus cost of goods sold; the profit available to cover labor and other operating expenses.

Gross profit improved after re-costing the burger.|We calculate gross profit by subtracting COGS from sales.|Gross profit by channel shows dine-in is strongest.|

Guest recovery

Actions taken to resolve a service failure and restore guest satisfaction and loyalty.

Offer a comped dessert as part of our guest recovery protocol.|We logged the complaint and issued a recovery gift card.|Timely guest recovery turned a 1-star into a 5-star review.|

HACCP (Hazard Analysis and Critical Control Points)

A preventive food safety system that identifies hazards, defines critical control points, and sets monitoring procedures.

Our HACCP plan covers cooling soups and reheating temps.|Logs document HACCP checks for inspectors.|Staff certified in HACCP monitor critical control points.|

Holding time

The maximum time a prepared item can be held before quality or safety is compromised.

Fries have a 5-minute holding time under the lamp.|Label batch-cooked eggs with holding times per SOP.|Past its holding time? Discard per safety policy.|

In the weeds

Service slang meaning overwhelmed by workload, often during a rush.

I’m in the weeds—can someone run drinks?|The grill station got in the weeds after the 7-top ordered steaks.|We were in the weeds until the manager jumped on expo.|

Inventory turnover

How many times inventory is sold or used during a period; higher turnover generally indicates efficiency.

Our inventory turnover improved from 3.2x to 4.1x.|Slow turnover on dry goods signals over-ordering.|Boost turnover by tightening PARs and menu cross-use.|

JIT (Just-in-Time Inventory)

An inventory strategy that minimizes on-hand stock by scheduling frequent deliveries just before production needs.

We moved to JIT deliveries for produce to improve freshness.|JIT reduces on-hand inventory but needs reliable vendors.|Supply chain delays can disrupt JIT schedules.|

KDS (Kitchen Display System)

Digital screens that display orders and timing to kitchen stations, often integrated with the POS.

The KDS shows course timing and cook temps.|We replaced paper chits with a KDS to cut ticket errors.|KDS data helps analyze station bottlenecks.|

KPI (Key Performance Indicator)

Quantifiable metrics used to evaluate performance against operational or financial goals.

Core KPIs include RevPASH, SPLH, and food cost %.|We set weekly KPI targets by daypart.|The dashboard tracks KPIs by location.|

Labor cost percentage

Labor expense divided by sales, used to manage staffing efficiency.

Lunch labor is at 24%—we’re on target.|Cut a runner at 8 pm to manage labor cost percentage.|Cross-training helped reduce labor cost variance.|

Line check

A pre-service inspection of stations to verify mise en place, temperatures, seasoning, and readiness.

Do a line check 30 minutes before service.|Line checks caught two out-of-temp sauces.|Our line check includes taste, temp, and presentation.|

Loyalty program

A structured reward system that incentivizes repeat visits and higher spend through points, tiers, or perks.

Our loyalty app offers a free entrée after 10 visits.|Loyalty redemptions spiked during the LTO.|Sync loyalty data with CRM for personalized offers.|

LTO (Limited-Time Offer)

A promotional menu item available for a short period to drive urgency, trial, and newsworthiness.

The pumpkin LTO lifts fall traffic by 8%.|We test new items as an LTO before full rollout.|Run the LTO only on delivery channels to test demand.|

Menu engineering

The practice of analyzing item profitability and popularity to optimize menu design, pricing, and placement.

We re-priced dogs and promoted stars per menu engineering.|Engineering analysis led us to reduce the steak portion.|Menu engineering improved contribution margin mix.|

Menu mix (Sales Mix)

The distribution of sales across menu items or categories; used to assess demand and margin impact.

Menu mix shifted toward high-margin pasta.|Track sales mix by daypart to plan prep.|Delivery sales mix skews to sandwiches and wings.|

Mise en place

The organized setup of tools, ingredients, and station prep to ensure efficient service.

Have all mise en place ready before the first seating.|Poor mise en place caused slow ticket times.|We updated prep sheets to improve mise en place.|

Modifier (POS modifier)

A POS option attached to a base item to customize it (e.g., doneness, add-ons, substitutions, allergies).

Add the 'no dairy' modifier for allergies.|We created paid modifiers for premium toppings.|Too many modifiers slow the KDS—streamline options.|

Net Promoter Score (NPS)

A guest loyalty metric based on how likely customers are to recommend the restaurant to others.

Our NPS rose to 72 after service training.|Text surveys capture NPS within 24 hours of dining.|Segment detractors for targeted recovery.|

No-show

A reservation that fails to arrive without canceling, affecting capacity and revenue.

Saturday no-shows were 12%; tighten confirmation texts.|We added a credit-card hold to reduce no-shows.|Overbooking offsets expected no-show rates.|

Occupancy cost

Facility-related costs such as rent, common area maintenance (CAM), and property taxes, often expressed as a percentage of sales.

Occupancy cost is 9% of sales after the lease renewal.|CAM charges increased our occupancy cost this quarter.|We model new sites to keep occupancy under 10%.|

Omnichannel ordering

Providing and integrating multiple ordering channels (dine-in, pickup, delivery, web, app, QR, kiosk) for a cohesive guest experience.

We unified dine-in, web, app, and kiosk for true omnichannel.|Omnichannel integration reduces menu maintenance.|Guests expect seamless omnichannel payment and loyalty.|

Online reservation system

A digital platform for managing bookings, guest data, pacing, and seating, often with marketplace visibility.

Switching reservation systems improved table turns.|The reservation platform manages waitlist and pacing.|We opened more bookable slots online for brunch.|

Par level

The target on-hand quantity for an inventory item to meet demand between deliveries.

PAR lemons at 3 cases; adjust after the LTO.|Set PARs by day of week to right-size deliveries.|Falling below PAR triggers an automatic order.|

POS (Point of Sale)

The system used to enter orders, manage menus, process payments, and route tickets to the kitchen and bar.

The POS pushes orders to the KDS and printers.|We programmed POS buttons for new modifiers.|POS data feeds sales, labor, and inventory reports.|

Prime cost

The sum of COGS and direct labor; the main controllable cost driver in restaurants.

Prime cost is at 61%—we need to reduce overtime.|Recipe changes lowered prime cost by 1.5 points.|Prime cost targets vary by concept and pricing.|

Profit and Loss Statement (P&L)

A financial report summarizing revenue, COGS, expenses, and profit for a period.

Review the monthly P&L with each GM.|The P&L shows food COGS trending above budget.|We reclassed repairs to the correct P&L line.|

RevPASH (Revenue per Available Seat Hour)

Revenue divided by the product of available seats and operating hours; measures how efficiently seating capacity is monetized.

RevPASH improved after we tightened pacing.|Extend brunch by an hour to lift RevPASH.|Patio seating boosts RevPASH in warm months.|

ROI (Return on Investment)

A measure of investment performance calculated as net gain divided by cost, used to evaluate projects and purchases.

The patio build-out achieved a 35% ROI in year one.|We calculate ROI on new equipment and LTO campaigns.|Switching vendors yielded a fast ROI via lower COGS.|