Mastering multi-unit menu analysis with restaurant recipe management software

Without solid menu analysis, you're essentially guessing what customers want, leading to wasted ingredients and missed profit opportunities. And when you compound that risk by operating multiple restaurant units, those missed profit opportunities can become liabilities.

Menu analysis and engineering for an independent restaurant is a time-consuming task and is often one that keeps getting pushed to the bottom of an operator's never-ending to-do list. When you're putting out fires and dealing with a million tasks a day (roughly), figuring out how to improve your puzzles or plowhorses (more on these terms below) doesn't always end up being a high priority.

Operating multiple locations makes the complexities of managing your menu and recipes even more, well, complex. The stakes are high – each dish must not only taste great but also contribute to your bottom line, and different locations mean different guest behaviors and preferences. Items that work well in one place may fall flat in another, and it creates a need for consistent monitoring and revision to get the most out of the work and love you put into your menus.

Thankfully, there's a way to make this process take a lot less time without sacrificing any insights or actionable data. Enter menu analysis and recipe management software. These tools can transform chaotic kitchen processes into smooth-running operations.

But how exactly do they work, and why should you care? In this post, we'll explore the basics, how to master multi-unit menu analysis, how technology can make running a profitable multi-unit restaurant group a whole lot easier, and some menu engineering best practices specifically for multi-unit restaurant groups.

Understanding the Basics: Menu Analysis

What is menu analysis? Simply put, menu analysis involves assessing the performance of your menu items based on profitability and popularity. It's like a guest insight crystal ball, telling you where you are, what’s working, and what needs to change (without the thinly veiled, guilt-laden threat of your Auntie Em having a heart attack because you ran away from home).

How is menu analysis different from menu engineering? Menu engineering is taking the data you collected during menu analysis and engineering, or adjusting, your menu to improve profitability. They’re often used interchangeably and represent different steps or parts of the same process.

The Four Quadrants

Menu analysis typically uses a four-quadrant matrix to categorize items:

• Stars: High profitability (food costs <30%) and high popularity. These are your menu’s MVPs.
• Plowhorses: Popular but not very profitable (food costs >30%). People love them, but they’re eating into your margins.
• Dogs: Low profitability (food costs >30%)and low popularity. These items are basically just taking up space.
• Puzzles: High profitability (food costs <30%) but low popularity. They have potential but need a little marketing love.

Key Performance Indicators (KPIs)

When it comes to KPIs for your menu items, focus on:

• Sales Volume: How often an item is sold.
• Cost of Goods Sold (COGS): The direct costs of producing the menu item.
• Gross Profit: Revenue minus the cost of goods sold.

Understanding these metrics allows you to make data-driven decisions that boost both customer satisfaction and profitability.

The Role of Recipe Management Software

The first step to performing menu analysis is (shocker) managing and costing out your recipes. Doing this across multiple units manually is like trying to herd cats (but with way fewer opportunities for furry snuggles).

With platforms like MarginEdge, you get a centralized system that streamlines everything from inventory control to recipe consistency and cost management into one place, for all locations. This is where restaurant management software (RMS) for multi-unit restaurant groups provides a clear return on investment.

Benefits of Using an RMS for Multi-Unit Recipe Management

1. Inventory Control: Ingredient prices are updated automatically from digitally processed invoices and stock levels are recorded directly in the same place. This gives you highly accurate food costs.
2. Consistency: Digitally stored and managed recipes for all locations means every store is following the same recipe standards, and changes can be made once across the board. This improves communication and speed and keeps guests happy.
3. Cost Reduction: Visibility into usage and sales performance prevents over-ordering and reduces food waste — because nobody likes throwing money (or good food) in the trash.

With RMS recipe management, you’re not just keeping track of ingredients; you’re making sure every plate that leaves the kitchen is up to your standards, and your costs are kept in check.

Mastering Multi-Unit Menu Analysis

So now that we've covered the benefits of managing recipes with an RMS, we can get into the nitty-gritty of how to conduct a comprehensive menu analysis across various locations using an RMS.

Step 1
Automate Data Gathering

The first step to menu analysis and eventually engineering is collecting sales data and cost information. This step is done for you with an RMS thanks to integrations with your POS system(s) and digital invoice processing. You'll want to know how many units of each menu item you're selling and at what cost per location.

Step 2
PMIX Map Menu Items to Products and POS keys

Product mix (PMIX) Mapping is the process of associating your POS buttons with products or recipes in your RMS. You can map to products if you're selling standalone items like beer, wines or liquor, and to recipes for items that are made of multiple products/ingredients.

For example, let's say you have a POS button labeled “Salmon Entree.” First, you'd need to create a menu item recipe for “Salmon Entree” and then associate your POS button to the recipe of the same name in the RMS. 

Step 3
Categorize Your Menu Items

Once you have popularity and profitability data for each item, and your recipes are linked to your POS buttons, you can start sorting your menu! This step involves plotting your menu items on a four-quadrant matrix and categorizing them as Stars, Plowhorses, Dogs, or Puzzles based on the criteria we mentioned in the four quadrants section above.

An RMS platform automates this process for you, saving you hours of manual data crunching. You can also customize quadrants by bar items, menu items, appetizers, entrees, etc., and choose different periods to track progress over time. You can see this information for each of your locations just by clicking between restaurants.

Step 4
Analyze and Optimize

Once you have your items categorized, use the insights to make strategic adjustments. Perhaps it's time to promote those high-margin but under-ordered Puzzles or reconsider the portions of your popular but low-profit Plowhorses.

Step 5
Implement Changes

Once you decide what steps to take to increase your menu item profits, update your recipes across all (or just some!) locations through your RMS. This ensures consistency, streamlines communicating those recipe changes and allows you to track the impact in real-time since your invoices automatically update plate costs with the most recent product prices.

Step 6
Monitor and Adjust

Sadly, menu analysis isn't a once-and-done deal. Continuous monitoring and adjusting are key to staying competitive. We recommend checking your menu items as you change your menus, once per quarter or as the seasons change, as seasonality can impact dish popularity. The helpful menu analysis tools in your RMS let you keep an eye on evolving trends and customer preferences very easily.

Keep in mind that every location brings with it its own trends and guest preferences, so make sure you're spreading the love equally and checking every location, not just the ones with the most room for opportunity.

Menu Engineering Best Practices for Multi-unit Restaurants

Now that you've mastered how to use an RMS to perform menu analysis for your multi-unit restaurant group, what can you do with the information? Here are some menu engineering best practices:

1. Promote High-Profit Items with Optimized Menu Design

Use visual aids like boxes, icons, or photos to draw attention to the most profitable items on the menu. Place Stars and Puzzles in prime locations on the menu where customers' eyes naturally land, such as the top right corner or the center. Or if you're trying out specials, think about adding menu inserts or table-top advertisements. Adding photos of items is a great way to entice guests to order them because they'll know what to expect ahead of time if they're ordering the dish for the first time.

2. Frequent Reviews

Conduct regular reviews of each of your menus' performances. Did a documentary about the dangers of turkey just come out and tank your turkey club sandwich sales? It happens. The only way to fix a problem is to first be aware of it. Carve out some time at the end of each period to check out your menu analysis matrices so you can stay up to date.

3. Adjust Pricing

Thanks to contract pricing with your vendors, some product prices stay steady, but without that, we all know how volatile prices can be from week to week.  Adjust the pricing of items based on changes in ingredient costs and market trends to maintain profit margins. If you have printed menus across your locations, changes to your menu probably sound like a nightmare. But if you use QR-code menus, these changes are a breeze for multi-unit operators (and they can help operators cut back on operating costs).

4. Training

Implement a consistent staff training policy for all locations that teaches the basics of menu engineering principles and the importance of upselling profitable items. Investing in your team's education can also lead to better staff retention and higher guest satisfaction thanks to consistency in experience.

Read how La Vida Hospitality Group used MarginEdge’s menu analysis and engineering tools to improve their Dogs and successfully raise menu prices.

Mastering menu analysis and recipe management across multiple units is crucial for any restaurant group aiming to stay competitive. The right tools can provide you with invaluable insights, streamline your operations, and ultimately boost your profitability without the extra effort and time traditionally spent undertaking these tasks.

By embracing technologies like Recipe Management Software, you not only make your life easier but also set your business up for long-term success.