A
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Average Order Value (AOV)The average amount spent each time a customer places an order at your restaurant. Calculated by dividing total revenue by the number of orders. Increasing AOV is a key strategy for boosting restaurant profitability without necessarily increasing customer count.
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Average Check SizeThe average amount spent per customer during a visit. Similar to AOV but calculated on a per-person rather than per-order basis. Important for understanding spending patterns and the effectiveness of upselling techniques.
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APMC Bypass / Farm-gate SourcingBuying produce straight from farmers instead of through mandi (APMC) agents; can trim costs and support farm-to-fork stories.
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Anti-Profiteering Rules (GST)GST clause saying any tax-rate cut (e.g., 18 % → 5 %) must be passed to customers via lower menu prices; fines for non-compliance.
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Amuse-boucheA small, complimentary appetizer served before a meal to showcase the chef's approach and stimulate the appetite. Often used in fine dining to enhance the customer experience and perceived value.
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AllocationThe distribution of limited or rare food and beverage products (like specialty wines) to restaurants. Important for establishments focusing on exclusive or premium offerings.
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All-Day DiningA restaurant format where food and beverages are served throughout the day, from breakfast to dinner, catering to diverse dining occasions under one roof.
B
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Bus PersonStaff member responsible for clearing tables, resetting for new guests, and maintaining cleanliness in the dining area. Critical for table turnover and overall guest experience.
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Break-Even Point (BEP)The point at which total revenue equals total costs, resulting in neither profit nor loss. Calculated to determine how much sales volume is needed to cover all fixed and variable costs before generating profit.
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Brand VoiceThe distinct personality and style used in all restaurant communications, from menu descriptions to social media. A consistent brand voice helps establish recognition and customer loyalty.
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BottleneckA point of congestion in service or production that slows down the entire restaurant operation. Common bottlenecks include ticket printers, expediting stations, or bar service during peak hours.
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Blind TastingEvaluating food or beverages without knowing their identity or origin. Used in menu development, wine program creation, and staff training to eliminate bias.
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Bench TimeThe period during which dough rests and ferments before being shaped and baked. Important for bakeries and pizza restaurants to track for quality control and production planning.
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Batch CookingA cooking method where large quantities of food are prepared at once and portioned out as needed during service. Commonly used in high-volume or quick-service restaurants to ensure consistency and speed.
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Bar ProgramA structured plan that defines a restaurant or bar’s beverage strategy, including drink menus, supplier relationships, pricing, staff training, and brand positioning.
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Back of House (BOH)The areas of a restaurant not visible to customers, including the kitchen, storage areas, offices, and employee areas. Effective BOH operations are crucial for quality, consistency, and profitability.
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Customer Acquisition Cost (CAC)The average cost of gaining a new customer through marketing and promotional efforts. Important for evaluating marketing ROI and strategic planning.
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Cross-UtilizationThe practice of using the same ingredients across multiple menu items to reduce inventory complexity and food waste while maximizing efficiency and profitability.
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CoversThe number of customers served during a specific time period. Tracking covers helps with staffing, inventory management, and evaluating marketing effectiveness.
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Cost of Goods Sold (COGS)The direct costs attributable to the production of goods sold by a restaurant, primarily food and beverage ingredients. A key metric for managing profitability and pricing strategy.
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CompsItems provided to customers at no charge, often due to service errors, quality issues, or as part of relationship building. Tracking comps helps control costs and identify operational problems.
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Churn RateThe percentage of customers who stop patronizing your restaurant over a given time period. High churn rates indicate potential issues with food quality, service, or value perception.
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ChitA printed order ticket that kitchen staff use to prepare dishes. A crucial element in kitchen operations management and order accuracy tracking.
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Chef’s TableAn exclusive dining experience where guests are seated near or inside the kitchen to enjoy a personalized, multi-course meal prepared and presented by the chef.
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Cash Flow ManagementThe process of tracking, analyzing, and optimizing the inflow and outflow of money in a restaurant to ensure there’s always enough cash available to cover daily operations and future growth.
D
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DupeA duplicate copy of a customer's order sent to the kitchen or bar. Part of the order tracking system in many restaurants to ensure accuracy and accountability.
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DropThe moment when food is started cooking or plating begins. In kitchen timing, a manager might call for the "first drop" to initiate service for a large party.
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Dram Shop LawsLegislation that holds businesses liable for serving alcohol to visibly intoxicated persons who subsequently cause injury to third parties. Critical knowledge for establishments serving alcohol.
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Double SeatingDouble seating refers to scheduling two different parties at the same table within a short time span. Common during peak hours, it’s a way to maximize table turnover.
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Depletion ReportA report that tracks the usage of inventory items, especially alcoholic beverages, over a specific period. It helps restaurant and bar managers monitor stock levels.
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Dark KitchenAlso known as ghost or cloud kitchens, these are food preparation facilities set up for delivery-only service without a dining area or storefront. A growing business model with lower overhead costs.
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Daily Sales Report (DSR)A comprehensive summary of a restaurant's financial performance for a single day, including revenue, covers, average check, and other key metrics. Essential for day-to-day operational management.
E
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ExpoShort for expeditor, the person responsible for coordinating timing between kitchen and service staff, ensuring food quality and timing, and organizing finished dishes for servers. A critical role for service efficiency.
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Expense RatioThe expense ratio measures the percentage of a restaurant’s total revenue spent on operating expenses such as labor, rent, food, and utilities.
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Equipment LeaseA financing arrangement allowing restaurants to use equipment without purchasing it outright. Can preserve capital and provide tax benefits for new or expanding operations.
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Employee Turnover RateThe percentage of staff who leave and are replaced during a specific period. High turnover rates increase training costs and may indicate workplace culture issues.
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Emotional LoyaltyEmotional loyalty refers to the deep connection customers feel toward your restaurant that goes beyond transactional rewards or discounts.
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Eighty-Six(86)Industry slang indicating that a menu item is out of stock or unavailable. Effectively communicating 86'd items to all staff is essential for customer service.
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Earnings Before Interest, Taxes, Depreciation, and Amortization(EBITDA)A measure of a restaurant's overall financial performance and profitability. Used by investors and stakeholders to evaluate the business's operational efficiency.
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Front of House (FOH)The areas of a restaurant visible to guests, including dining rooms, bars, and reception areas. FOH staff interact directly with customers and create the guest experience.
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Franchise FeeThe upfront payment made to a franchisor for the right to operate under their brand name and system. Varies widely depending on the restaurant concept and market potential.
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ForecastingForecasting is the process of predicting future restaurant sales, customer traffic, and inventory needs using historical data, trends, and seasonal insights.
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Food Waste AuditA food waste audit is a systematic process of tracking, categorizing, and analyzing all discarded food in a restaurant. It helps identify waste sources, reduce costs, and improve sustainability through smarter inventory and portion control.
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Food Cost PercentageThe ratio of food costs to food sales, typically aiming for 28-32% in most restaurant operations. A critical profitability metric that directly impacts menu pricing and purchasing decisions.
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FIFOFirst In, First Out - an inventory management principle ensuring oldest products are used before newer ones, reducing waste and maintaining freshness. Essential for food safety and cost control.
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Family MealA meal prepared for restaurant staff to eat together before service begins. Builds team culture, allows chefs to test new items, and ensures staff are nourished before their shift.
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Guest Recovery ProgramA guest recovery program is a structured approach to resolving customer complaints and turning negative experiences into positive, loyalty-building moments. It involves timely responses, compensation when needed, follow-ups, and systematic tracking to prevent repeat issues.
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Guest Check Average(GCA)The average amount spent per guest. Calculated by dividing total sales by number of guests and monitored to track upselling effectiveness and pricing strategy success.
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Gross MarginThe difference between revenue and cost of goods sold, expressed as a percentage of revenue. Helps evaluate menu item profitability and overall business health.
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Grease TrapA plumbing device designed to intercept greases and solids before they enter the wastewater system. Regular maintenance is required by health codes and prevents costly plumbing emergencies.
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GratuityA voluntary or automatic service charge added to a guest's bill as a tip for service staff. Management of gratuities has legal and tax implications for restaurant operations.
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Gold Standard ServiceGold Standard Service refers to the highest level of hospitality a restaurant can deliver exceptional, consistent, and memorable experiences that exceed guest expectations
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Ghost KitchenA professional food preparation facility set up for delivery-only meals without a storefront or dining room. Reduces overhead costs and allows for multiple virtual restaurant brands under one roof.
H
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House-Made vs. Store-BoughtA comparison between items prepared in-house (house-made) and those purchased pre-made from suppliers (store-bought). It influences menu quality, labor planning, cost control, and brand positioning.
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House AccountA credit arrangement allowing regular customers to pay periodically rather than at each visit. Can build loyalty but requires careful management to prevent unpaid balances.
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HospitalityThe quality of receiving and treating guests in a warm, friendly, and generous way. The cornerstone of successful restaurant operations and guest satisfaction.
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Holding TimeHolding time refers to the maximum amount of time cooked food can be safely kept warm or cold before its quality or safety declines. It is critical for maintaining flavor, texture, and compliance with food safety standards.
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Heat LampEquipment used to keep plated food warm before service. Proper use affects food quality, timing, and overall guest experience during busy service periods.
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Happy HourA promotional period offering discounted drinks and appetizers, typically during slower business hours. Drives traffic during off-peak times and increases overall beverage sales.
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HACCP (Hazard Analysis Critical Control Point)Hazard Analysis Critical Control Point - a systematic preventive approach to food safety that identifies physical, chemical, and biological hazards. Required for many food service operations and crucial for preventing foodborne illness.
I
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Item VoidThe removal of a menu item from a guest’s bill due to order errors, unavailability, or quality issues. Proper tracking prevents revenue loss and exposes operational gaps.
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ISO 22000An international standard for food safety management systems that ensures proper identification and control of food safety hazards. Certification can enhance reputation and demonstrate commitment to safety.
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Iron Chef NightA themed culinary event where chefs prepare dishes using a surprise ingredient or a set of creative constraints, designed to boost guest engagement, showcase chef talent, and increase mid-week footfall.
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Invoice AgingA report showing unpaid supplier invoices categorized by length of time outstanding. Managing invoice aging is important for vendor relationships and cash flow planning.
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Inventory TurnoverThe rate at which inventory is used and replaced over a specific time period. Higher turnover generally indicates fresher ingredients and better cash flow management.
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IntegrationThe process of connecting different restaurant technology systems (POS, inventory, accounting, etc.) to work together seamlessly. Critical for operational efficiency and data accuracy.
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In the WeedsRestaurant slang for being overwhelmed or behind during service. Recognizing when staff are "in the weeds" and providing support is crucial for management during busy periods.
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Just-In-Time(JIT)An inventory strategy that minimizes storage needs by receiving goods only as they're needed in the production process. Reduces waste and improves cash flow but requires reliable suppliers.
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Juice YieldThe percentage of usable juice extracted from fruits or vegetables compared to their total weight. A key metric for controlling beverage costs and maximizing profitability.
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Juice ProgramThe selection of fresh juices and juice-based drinks offered by a restaurant. Can be a significant profit center and differentiator, especially for breakfast and brunch concepts.
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Joint VentureA business arrangement where two or more parties collaborate to operate a restaurant or food concept, sharing resources, risks, profits, and decision-making responsibilities.
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Job DescriptionA formal document outlining the responsibilities, qualifications, and expectations for a specific position. Well-crafted job descriptions improve hiring processes and clarify staff roles.
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JiggerA bartending tool used to measure spirits accurately. Proper use ensures consistency in cocktails and controls liquor costs for profitability.
K
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Kitchen Prep List (Prep Sheet)A daily list outlining all ingredients and quantities that need to be prepped before service. Ensures stations are stocked properly, reduces delays during rush hours, and helps maintain consistency and portion control.
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Kitchen Display System(KDS)Digital screens that replace paper tickets in the kitchen, showing order details, timing, and status. Improves efficiency, accuracy, and coordination between FOH and BOH.
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Kitchen BrigadeA hierarchical system of kitchen staff organization developed by Auguste Escoffier. Defines clear roles and responsibilities to ensure efficient workflow in professional kitchens.
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Kiosk OrderingSelf-service digital terminals where customers can browse menus, place orders, and pay without server interaction. Can reduce labor costs and increase average check size through consistent upselling.
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KickbackA form of vendor incentive where suppliers offer rebates, discounts, or benefits to restaurants in exchange for purchasing certain products. Can reduce costs but must be managed transparently to avoid ethical or quality concerns.
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Key Performance Indicator(KPI)Measurable values that demonstrate how effectively a restaurant is achieving key business objectives. Common restaurant KPIs include food cost percentage, labor cost, and table turnover rate.
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KDS (Known Dining Sales)Sales generated from customers whose data is captured in the system, usually through POS, loyalty, CRM, or feedback tools. Helps restaurants measure the effectiveness of customer retention and targeted marketing.
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LTO (Limited-Time Offer)A temporary menu item or promotion available for a short period. Used to boost traffic, create urgency, test new dishes, and keep menus fresh without long-term commitment.
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Loyalty ProgramA structured customer rewards system designed to encourage repeat business. Can increase customer retention and frequency of visits when well-implemented.
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Loss LeaderA product sold at a loss to attract customers who will then purchase more profitable items. Strategic pricing technique used in specials and promotions.
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Local Sourcing RequirementsRegulations or certifications related to locally-sourced ingredients; may affect marketing claims and pricing.
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Liquor LicenseGovernment permit required to sell alcoholic beverages; various categories with different restrictions and costs.
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Liquor Liability InsuranceCoverage protecting restaurants from liability related to serving alcohol. Essential for establishments serving alcoholic beverages to mitigate risks associated with intoxicated customers.
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Line CookA chef who works at a specific station in the kitchen (grill, sauté, fry, etc.) during service. The backbone of kitchen operations and food production.
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Line CheckA pre-service quality and readiness inspection performed by chefs or managers. Ensures stations are stocked, temperatures are correct, and food meets standards before service begins.
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Labor Cost PercentageThe ratio of labor costs to total sales, typically targeting 25-35% in most restaurants. A critical metric for profitability and operational efficiency.
M
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MockupA model or replica of a dish or menu item created for photography, training, or testing before introduction. Important for consistency and marketing materials
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Mobile Payment IntegrationSystems allowing customers to pay via smartphones; includes UPI, mobile wallets, and QR code payments.
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Mise en PlaceFrench for "putting in place," referring to the preparation and organization of ingredients and equipment before service begins. Essential for kitchen efficiency and service speed.
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Minimum WageThe lowest wage per hour that employers may legally pay to workers. Varies by location and has important implications for tipped employees and labor cost management.
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Menu RationalizationThe process of reviewing and refining a restaurant’s menu to remove low-performing items, reduce operational complexity, and increase overall profitability.
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Menu EngineeringThe study of the profitability and popularity of menu items and how these factors influence menu design and pricing decisions. Helps optimize menu layout to promote high-profit items.
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Market Basket Analysis (MBA)A data technique that identifies which menu items customers frequently purchase together, helping restaurants design combos, improve upselling, and boost average order value.
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Nutritional LabelingRequirements for displaying calorie counts and allergen information; increasingly important for health-conscious consumers.
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Nutrient DensityThe measure of how many essential vitamins, minerals, and beneficial nutrients a food contains relative to its calorie count. Nutrient-dense dishes help restaurants offer healthier, high-value menu options.
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Non-Compete Agreement:Contract restricting employees from working for competitors or starting similar businesses for a specified period.
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NOC (No Objection Certificate)Documents from various authorities (fire department, municipal corporation, pollution control board) required for restaurant operation.
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No-Show RatePercentage of reservations that fail to arrive; impacts table management and revenue.
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Night AuditA daily end-of-day review of sales, payments, inventories, and operational records to ensure everything is accurate and balanced before the next business day.
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Net Promoter Score (NPS)Metric measuring customer loyalty and likelihood to recommend the restaurant.
O
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Overhead CostsThe ongoing expenses required to operate a restaurant, such as rent, utilities, salaries, and maintenance, that are not directly tied to food production.
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Order ModifierSpecific add-ons or customizations that adjust a base menu item, such as extra toppings, cooking preferences, or substitutions, to personalize a guest’s order.
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Order Cycle TimeAverage duration from order placement to delivery to customer; critical for service quality metrics.
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Operating Profit MarginPercentage of revenue remaining after operating expenses; indicator of operational efficiency.
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Online Reputation ManagementMonitoring and responding to customer reviews across digital platforms.
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On-the-Job TrainingPractical instruction provided while employees perform their regular duties.
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Occupancy RatePercentage of available seats filled during a given time period; key capacity utilization metric.
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Prime CostSum of labor and COGS; typically targets 55-65% of total revenue.
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Premises LicenseLegal permission to use a property for specific commercial activities; includes zoning compliance.
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Predictive OrderingTechnology-driven method that forecasts ingredient demand based on historical sales, seasonality, and trends, helping restaurants reduce stockouts, prevent over-ordering, and control food cost.
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Pour CostBeverage cost expressed as a percentage of beverage sales; measures bar profitability.
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POS (Point of Sale) SystemTechnology used to process customer transactions and track sales data.
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Par LevelThe minimum quantity of each ingredient or supply a restaurant must keep on hand to meet expected demand without running out during service.
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Quota-Based Inventory ManagementA system where restaurants set predefined purchasing or stock limits for ingredients based on forecasted demand, helping control costs and minimize waste.
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Quick RatioFinancial measure comparing liquid assets to current liabilities; indicates short-term solvency.
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Queue Management SystemTechnology or methods used to organize waiting customers and provide wait time estimates.
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Quarter-wise Sales AnalysisEvaluation of business performance across three-month periods; identifies seasonal patterns.
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Quality of Service Score (QSS)A metric used to evaluate the guest’s overall service experience, covering speed, accuracy, staff behaviour, responsiveness, and satisfaction.
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Quality ControlSystematic monitoring of food preparation processes to ensure consistency and standards.
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QSR (Quick Service Restaurant)Fast food establishment focused on speed of service and standardized menu items.
R
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ROI (Return on Investment)Financial metric measuring the profitability of a business investment.
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Revenue Per Available Seat Hour (RevPASH)Sales generated per available seat per hour; combines occupancy and average check.
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Revenue Management StrategyA structured approach restaurants use to optimize revenue by balancing menu pricing, demand forecasting, table turns, promotions, and operational efficiency.
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Reservation SystemTechnology or process for managing table bookings and customer seating.
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Regional Food Safety RegulationsLocation-specific rules beyond national FSSAI standards; varies by state and municipality.
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Recipe Costing SheetA detailed document that calculates the exact cost of producing a menu item by breaking down each ingredient, portion size, and yield. Essential for pricing, profitability, and food cost control.
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Rate CardStandardized pricing document for services like catering, banquet facilities, or special events.
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Standard Recipe CostingStandard recipe costing is the method restaurants use to calculate the exact cost of producing each dish based on ingredient quantities, yield, and portion size.
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Staff MealFood provided to employees during their shift; affects morale and food cost.
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SSSG (Same Store Sale Growth)Same Store Sales Growth, or SSSG, measures how much your existing restaurant outlets are growing in sales over a period of time—usually year-over-year or month-over-month.
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Social Media MarketingPromoting restaurant offerings through platforms like Instagram, Facebook, and YouTube.
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ShrinkageLoss of inventory due to theft, waste, or spoilage; impacts food cost and profitability.
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Shop & Establishment ActState-specific legislation governing working conditions, hours of operation, and employment terms.
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Service RecoveryService recovery refers to the actions a restaurant takes to fix a service failure, turning a negative guest experience into a positive one through quick response, empathy, and corrective action.
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Seat TurnoverNumber of times a seat is occupied by different customers during a service period.
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Trademark RegistrationLegal protection for restaurant name, logo, and brand elements.
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Tip PoolingTip pooling is a system where tips collected by servers are combined and redistributed among eligible staff such as kitchen crew, bussers, and hosts.
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Thali ConceptFixed-price meal featuring multiple small dishes; requires special costing approaches.
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Temperature Danger ZoneThe temperature danger zone refers to the range between 5°C and 60°C where harmful bacteria grow rapidly, making food unsafe for consumption.
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TDS (Tax Deducted at Source)Tax deduction requirement on certain payments; affects cash flow and compliance reporting.
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Target Food CostIdeal food cost percentage used for menu pricing and purchasing decisions.
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Table TurnoverRate at which tables are reoccupied during service; affects revenue potential.
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Utility Cost RatioPercentage of revenue spent on utilities (electricity, water, gas); benchmark for operational efficiency.
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Usage VarianceDifference between theoretical and actual inventory usage; identifies waste or theft issues.
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UpsellingSales technique encouraging customers to purchase upgrades or add-ons.
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UPI (Unified Payments Interface)Indian instant payment system facilitating inter-bank transactions via mobile platform.
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Unutilized CapacityUnutilized capacity refers to the unused seating, kitchen capability, or operational bandwidth a restaurant has during low-demand periods.
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Uniform GuidelinesStandards for staff attire; impacts brand image and health compliance.
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UnderstaffingUnderstaffing occurs when a restaurant has fewer employees than required for smooth operations, leading to slower service, stressed staff, and reduced guest satisfaction.
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Volume DiscountPrice reduction offered by suppliers for purchasing in large quantities.
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Virtual BrandA Virtual Brand is a delivery-only restaurant concept that operates out of an existing kitchen, using digital menus and online platforms without a physical storefront.
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Vendor ManagementSystem for organizing supplier relationships, contracts, and performance evaluation.
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Veg/Non-Veg SegregationLegal requirement to maintain separate preparation areas and clear menu marking for vegetarian and non-vegetarian items.
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Variance AnalysisProcess of investigating differences between budgeted and actual costs.
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Variable PricingVariable Pricing is a strategy where restaurant menu prices change based on demand, time, season, or customer segment.
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Valet ParkingCustomer service offering supervised vehicle parking; requires specific insurance and staff training.
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Working CapitalDifference between current assets and current liabilities; measure of operational liquidity.
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Workforce SchedulingProcess of assigning staff to shifts based on anticipated business volume.
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Wine List EngineeringStrategic development of beverage offerings to maximize profitability and complement menu items.
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Weekly Inventory CountA scheduled weekly process of measuring on-hand stock across all food and beverage items to track usage, manage ordering, and control food costs.
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Waste ManagementProcedures for disposing of food waste and packaging in compliance with environmental regulations.
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WalkthroughSystematic inspection of the restaurant before opening to ensure readiness for service.
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Waitlist OptimizationThe process of managing and prioritizing waiting guests to reduce wait times, improve table flow, and maximize seating efficiency.
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XYZ AnalysisInventory management technique categorizing items by value and usage frequency.
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X-Shift ReconciliationA structured end-of-shift audit where restaurant managers verify payments, voids, discounts, cash handling, inventory usage, and POS records to ensure financial accuracy before closing the register.
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X-Efficiency in Restaurant OperationsThe effectiveness with which a restaurant minimizes waste, labor inefficiencies, and process delays to maximize output with the same resources.
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X ReportPOS system summary showing sales data for the current business day before closing.
Y
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Youth MarketingStrategies specifically targeting younger demographic segments.
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Yield PercentageRatio of usable product to total purchased product after trimming and preparation.
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Yield per Cover (YPC)A metric measuring the average revenue earned per guest during a dining experience, used to evaluate menu profitability, service performance, and guest spending behavior.
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Yield ManagementStrategies maximizing revenue by adjusting pricing based on demand patterns.
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Yearly Budget PlanningAnnual financial projection including sales targets, expense limits, and capital improvements.
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Year-End InventoryComprehensive stock count conducted for tax purposes and financial reporting.
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Y-O-Y Sales Growth (Year-over-Year Sales Growth)A financial metric that compares a restaurant’s sales for a specific period with the same period in the previous year to measure growth, decline, and overall business performance.
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Zoning RegulationsMunicipal rules determining permissible business activities in specific areas; affects location selection.
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Zone-Based Kitchen RoutingA workflow system where orders are routed to specific kitchen zones (grill, sauté, fry, pantry, dessert) based on preparation requirements to improve speed, accuracy, and coordination.
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Zero-Waste InitiativesPrograms reducing or eliminating waste in restaurant operations; increasingly important for sustainability branding.
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Zero-Latency Order SyncA real-time technology system that syncs orders instantly across POS, KDS, aggregator tablets, and delivery platforms without delay.
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Zero-Hour ContractEmployment agreement without guaranteed working hours; subject to labor regulations.
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Zenith PricingPremium pricing strategy for signature dishes or limited-time offerings.
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Z ReportFinal POS system report generated at day's end showing complete sales data.