What is the 30-30-30 Rule for Restaurants? Food Truck Guide 2025

You've probably heard restaurant owners talk about the "30-30-30 rule" and wondered what it means. Here's the short answer: it's a cost structure guideline that says your food costs, labor costs, and overhead should each be 30% of revenue, leaving 10% profit.

But here's what most people don't tell you: this rule is a starting point, not a hard-and-fast law. And for food trucks, the numbers often look different.

Understanding what the 30-30-30 rule actually means, how it applies to food trucks, and when you should follow it—or ignore it—is essential for managing food truck costs.

What is the 30-30-30 Rule?

The 30-30-30 rule is a restaurant industry benchmark that breaks down your revenue as follows: 30% Food Costs for the cost of ingredients and raw materials, 30% Labor Costs for wages, salaries, and benefits for employees, 30% Overhead for rent, utilities, insurance, marketing, equipment, and other fixed costs, and 10% Profit for what's left over.

So if your food truck brings in $10,000 in monthly revenue, the rule suggests $3,000 on food costs, $3,000 on labor, $3,000 on overhead, and $1,000 profit.

Important note: This is a target, not a guarantee. Many successful restaurants and food trucks operate outside these percentages and still make money. The key is understanding where your money goes and optimizing each category.

Why This Rule Exists

The 30-30-30 rule gives restaurant owners a simple framework to track costs. If your food costs are 40% instead of 30%, you know you have a problem. If your labor is 25%, you might be understaffed or have room to invest more in quality.

It's also useful for benchmarking. When you're starting out, you don't know if your 35% food cost is high or low. The 30% target gives you a reference point.

But here's the reality: most restaurants don't hit these exact numbers. According to industry data, average food costs range from 28-35%, labor costs from 25-35%, and profit margins from 3-10% — Restaurant Resource Group.

How Food Trucks Differ from Restaurants

Food trucks have a different cost structure than brick-and-mortar restaurants. Here's how the 30-30-30 rule typically shifts for food trucks:

Food Costs: Often Lower (25-30%)

Food trucks can often achieve lower food costs than restaurants because smaller menus mean less waste, no dining room means no need to over-prepare for walk-ins, direct sourcing means fewer middlemen, and simpler prep means less labor-intensive dishes.

Target for food trucks: 25-30% food costs is realistic and gives you more flexibility.

Labor Costs: Often Lower (20-30%)

Food trucks typically have lower labor costs because they operate with smaller teams (often 1-3 people vs. 10-20 in a restaurant), use an owner-operator model where you're working rather than just managing, don't require front-of-house staff, and allow for flexible scheduling.

Target for food trucks: 20-30% labor costs is common, especially if you're the primary operator.

Overhead: Can Be Higher or Lower (25-35%)

This is where food trucks vary the most. Lower overhead comes from no rent if you own your spot and smaller space meaning lower utilities. Higher overhead comes from vehicle maintenance, fuel, parking fees, commissary costs, and permits.

Target for food trucks: 25-35% overhead, depending on your model.

Profit: Often Higher (15-25%)

Because food trucks have lower food and labor costs, they often achieve higher profit margins than restaurants.

Target for food trucks: 15-25% profit is achievable if you control costs well.

A Realistic Food Truck Cost Structure

Based on conversations with successful food truck owners, here's a more realistic breakdown for food trucks: 25-30% Food Costs which are lower than restaurants due to efficiency, 20-30% Labor Costs which are lower due to smaller teams, 25-35% Overhead which varies based on location and model, and 15-25% Profit which is higher than restaurants when done right.

For example, if your food truck generates $8,000 per month, you'd allocate $2,000-2,400 on food (25-30%), $1,600-2,400 on labor (20-30%), $2,000-2,800 on overhead (25-35%), and $1,200-2,000 profit (15-25%).

Breaking Down Each Category

Food Costs (30% Target)

Food costs include everything that goes into your menu items: raw ingredients like meat, produce, and spices, packaging like containers, napkins, and utensils, beverages, and condiments and sauces.

How to calculate: Total food purchases ÷ Total food revenue = Food cost percentage

Example: If you spend $2,400 on food in a month and generate $8,000 in food sales: $2,400 ÷ $8,000 = 30% food cost

Tips to control food costs include tracking inventory daily, negotiating with suppliers, reducing waste through better prep planning, using seasonal ingredients when cheaper, practicing portion control by weighing and measuring everything, and menu engineering to promote high-margin items.

Red flags appear if your food costs are above 35%, which could mean you're overpaying for ingredients, wasting too much food, pricing too low, or not tracking properly.

Labor Costs (30% Target)

Labor costs include wages and salaries, payroll taxes, benefits if offered, and owner's salary if you pay yourself.

How to calculate: Total labor expenses ÷ Total revenue = Labor cost percentage

Example: If you pay $2,400 in labor (including your own salary) and generate $8,000 in revenue: $2,400 ÷ $8,000 = 30% labor cost

Tips to control labor costs include cross-training employees so everyone can do multiple tasks, using technology like POS systems and scheduling apps, optimizing scheduling to match staff to demand, considering part-time help during peak times, and using an owner-operator model where you work the truck.

Red flags appear if your labor costs are above 35%, which could mean you're overstaffed, paying too much per hour, not generating enough revenue, or have inefficient operations.

Overhead Costs (30% Target)

Overhead includes all fixed and variable costs not directly tied to food or labor: vehicle payments or lease, fuel, insurance including vehicle, liability, and health, permits and licenses, commissary fees, parking or rental fees, equipment maintenance, marketing and advertising, accounting and legal, utilities if applicable, phone and internet, and software subscriptions like POS and accounting systems.

How to calculate: Total overhead expenses ÷ Total revenue = Overhead percentage

Example: If you spend $2,400 on overhead and generate $8,000 in revenue: $2,400 ÷ $8,000 = 30% overhead

Tips to control overhead include negotiating better rates for insurance and permits, shopping around for suppliers, using free marketing like social media and word-of-mouth, maintaining equipment to avoid costly repairs, and tracking every expense since you can't control what you don't measure.

Red flags appear if your overhead is above 35%, which could mean you're paying too much for location or rent, not tracking all expenses, over-investing in equipment, or have inefficient operations.

When the 30-30-30 Rule Doesn't Apply

The 30-30-30 rule is a guideline, not a law. Here's when you should adjust:

High-End Food Trucks

If you're selling premium ingredients like wagyu beef, truffles, or artisanal products, your food costs might be 35-40%. That's okay if your prices reflect the quality, your labor and overhead are lower, and you're still profitable overall.

Low-Overhead Models

If you own your truck outright and operate from free locations, your overhead might be 15-20%. That's great—it means more profit or room to invest in food quality or marketing.

Owner-Operator Models

If you're the only employee and don't pay yourself a salary (you take profit), your labor costs might be 0-10%. This is common for new food trucks and can help you get profitable faster.

Seasonal Businesses

If you only operate during peak seasons, your overhead might be higher as a percentage during slow months. Look at annual numbers, not monthly.

How to Track Your Costs

You can't manage what you don't measure. Here's how to track your costs:

1. Set Up a Simple Spreadsheet

Track these categories monthly: food purchases, labor expenses, overhead broken down by category, and total revenue.

Calculate percentages by dividing each category by total revenue. Food cost percentage equals food purchases divided by revenue, labor cost percentage equals labor expenses divided by revenue, overhead percentage equals overhead expenses divided by revenue, and profit percentage equals profit divided by revenue.

3. Compare to Targets

Compare your percentages to the 30-30-30 rule (or your food truck-adjusted targets) and identify areas to improve.

4. Review Monthly

Set aside time each month to review your numbers. Look for trends like whether food costs are creeping up, if labor is getting out of control, or if overhead is increasing.

Common Mistakes

Mistake 1: Not Including Everything

Many food truck owners forget to include their own salary in labor costs, vehicle depreciation in overhead, all permits and fees, and marketing expenses.

Solution: Track every single expense, no matter how small.

Mistake 2: Looking at Gross Revenue Instead of Net

The 30-30-30 rule applies to revenue after discounts, refunds, and chargebacks. Make sure you're using net revenue, not gross.

Mistake 3: Not Adjusting for Food Trucks

Restaurant benchmarks don't always apply to food trucks. Use food truck-specific targets (25-30% food, 20-30% labor, 25-35% overhead).

Mistake 4: Ignoring Seasonal Variations

Your costs will fluctuate. A slow month might show 40% overhead because revenue is down. Look at trends over 3-6 months, not single months.

The Bottom Line

The 30-30-30 rule is a useful starting point, but it's not a one-size-fits-all solution. For food trucks, a more realistic target is 25-30% Food Costs which can be lower with efficiency, 20-30% Labor Costs which are often lower with the owner-operator model, 25-35% Overhead which varies by location and model, and 15-25% Profit which is often higher than restaurants.

The key isn't hitting exact percentages—it's understanding where your money goes and optimizing each category. Track your costs monthly, compare to benchmarks, and adjust as needed.

If you're profitable and growing, your percentages are fine, even if they don't match the 30-30-30 rule. But if you're struggling, use these benchmarks to identify where to cut costs or increase prices.

Ready to find a profitable location for your food truck? Check out available food truck locations on FoodTruckLease to get started.