Operations

5 ways fast casuals can reduce COGS without sacrificing quality

Biscuit Belly co-founder and CEO Chad Coulter shares cost-management insights and strategies to help operators protect profitability while maintaining brand consistency and guest satisfaction.

Photo: Gemini

November 17, 2025 by chad, Chad Coulter — CEO, Biscuit Belly

With profit margins in the neighborhood of just 6% to 9%, fast casual restaurants fight on a daily basis to ensure profitability. While elements like labor costs, turnover and operational efficiency can all impact the bottom line, management and reduction of cost of goods sold can have an immediate impact that lasts.
Here are five ways to reduce COGS without sacrificing quality.

1. Menu, value engineering

Maintaining a diverse menu allows restaurateurs to avoid becoming overly reliant on a single item during periods of market volatility. In addition to promoting a product mix, menu engineering is an area in which proactive franchisees can actually exert a little control, matters when outside fluctuations can't be controlled.

Items like tariffs change constantly, sometimes multiple times per day, creating unpredictability. Meanwhile, outside factors can cause fluctuations within the prices of food ingredients: Avian flu can impact the price of items like chicken and eggs, while climate issues can affect feed and milk production, which in turn can impact beef yields. Therefore, having a diverse market basket stands as a huge advantage and operators should consider divesting items that consistently increase in cost.

2. Long-term partnerships

With future growth in mind, savvy franchisors can sometimes negotiate better deals in the short term, lowering costs or sourcing upgraded products with the promise of more locations for a vendor to source down the line. Holding vendors accountable also has a direct impact on both quality and COGS; tracking and managing vendor contracts helps deliver agreed-upon pricing. Developing working relationships with procurement groups and commissary-type distributors can further lower costs and stabilize pricing through volume.

For instance, Biscuit Belly may tell our suppliers, "We're at 13 locations now and expect to double that in 18 months: 25 to 26 locations by the end of 2027. Work with us today and be a long-term partner."

Sometimes the brand is actually upgrading products while negotiating better deals. Many large companies are trying to buy market share, so we approach them by saying, "We'll grow faster if we're more profitable. We'll be more profitable if you give us an equal or better product at the same or better price."

We also source some products from commissary-type settings. That helps with consistency and cost because those suppliers buy in larger quantities, which keeps pricing stable and helps us reduce labor in the restaurant.

3. Inventory, technology

Properly prioritizing the inventory process can have a profound impact on the reduction of COGS, and strong inventory management tools and systems can go even further, providing necessary data for further extrapolation.

Per the long-held adage, the customer is always right. And incorporating guest feedback alongside insights gleaned from data analysis is critical when it comes to reducing COGS without impacting quality.

Technology is huge. Restaurant365 is a great accounting and inventory tool that helps Biscuit Belly track over- or under-portioning and identify trends. We also use internal guest feedback data. For example, if people complain about portion sizes for to-go orders, we'll increase them slightly. That may raise the cost of goods a bit, but it improves value perception, which drives repeat visits — and that's ultimately more important.

4. Waste Reduction

Keeping fewer necessary products in-house can decrease spoilage while helping maintain consistency. Portion control is another lever, and it works only when everyone is trained the same way. Biscuit Belly also plans for leftovers, folding them into other items to cut waste and tighten inventory. Simple cues, color-coded ladles, and marked scoops keep portions consistent, and training reinforces who uses which tools and how much to serve.

We've also added menu items that use day-old biscuits — like biscuit French toast or breakfast casseroles for catering — reducing waste while improving inventory control. Biscuit Belly's waste levels are extremely low because we cross-utilize ingredients so effectively.

LTOs, seasonal planning

Coordinating limited-time offers can enhance quality cost-effectively, especially when planned around seasonal inflation. Because these items are short-term, the cost of goods is less critical, though we still monitor it. For example, Biscuit Belly won't run a fall LTO with turkey because turkey prices spike before Thanksgiving.

Similarly, we avoid bacon-heavy items in spring and summer when pork prices rise. The goal is to plan LTOs around commodity trends and buy ingredients in season — like peaches in the summer — to maintain quality. Another option is to work with a procurement group, like Stevens Food Group, which has strong supplier relationships and contracts that can be leveraged for better pricing.

Reducing COGS while maintaining quality

Reducing COGS can't come at the expense of quality. Thoughtful menu engineering keeps the mix balanced and cushions volatility — from tariffs to supply shocks — that operators can't control. Long-term partnerships can help reduce COGS in the short term while helping guide future growth. Prioritizing inventory can help deliver useful data, while minimizing SKUs and repurposing leftovers optimizes both process and product. Finally, strong franchise systems — paired with a disciplined philosophy at the unit level — can go a long way toward reducing COGS without sacrificing the experience that keeps guests coming back.

About Chad Coulter

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