Hospitality glossary

70 per cent rule

The menu matrix's popularity line: a dish is popular if it sells at least 70 per cent of an equal share, 8.75 per cent of plates on an eight-dish menu. It stops a long menu grading everything unpopular.

ADR

Average daily rate: what a sold room actually achieves a night, not the rack rate on the website. The demo's six rooms achieve £95, and ADR only means anything read next to occupancy, which is what RevPAR is for.

Allergen rules

The 14 allergens must be identifiable for every item sold, and anything packed on site before sale carries full ingredient labelling under the PPDS rules. Training records are what the inspector reads first.

Auto-enrolment

Workplace pension duties that begin the day you employ anyone, not at a comfortable later date. The employer minimum is 3 per cent of qualifying earnings, and it is inside the loaded hourly rate every rota should be priced at.

Blended GP

Food and drink gross profit weighted together. The demo venue holds food at 68 per cent and drink at 72, blending to 69, and the blend is what the break-even covers calculation runs on.

Break-even covers

The covers a week that pay the fixed costs and the committed rota before profit starts: 510 of the demo's 620. Everything after that cover is worth the full contribution, which is why quiet Tuesdays matter more than they feel.

Cash-up

The nightly reconciliation of the till to the money: card to the settlement, cash counted against expected, variance investigated the same night. Unreconciled cash is where losses live, and daily is the only frequency that works.

Challenge 25

The age-verification policy licensing authorities expect: anyone who looks under 25 is asked for ID, refusals are logged, and the log plus the briefing records are the licence's armour when a test purchase goes wrong.

Contribution per cover

What one diner leaves after the food and drink they consumed are paid for: the ex-VAT spend times the blended GP, £21.87 on the demo book. It is the number no-shows waste and the break-even is built from.

Cover

One seated diner. Covers are the venue's unit of output: the demo runs 620 a week across twelve services in 80 seats, and covers times contribution is the whole revenue model in four words.

DPS

The designated premises supervisor: the personal licence holder named on the premises licence who authorises alcohol sales. No DPS, no sales, and a change of manager needs the licence varied, not just the rota.

Dry stock

Food stock, as against the cellar. Counted weekly at cost, because the GP figure is only as honest as the counts either side of it.

Flat rate scheme

A VAT simplification that pays a fixed percentage of gross takings instead of output less input VAT. Catering rates look tempting until the input VAT on food purchases is counted, which is why the decision is arithmetic, not fashion.

Food business registration

Registration with the local authority at least 28 days before opening: free, unrefusable, and an offence to skip. The first inspection sets the hygiene rating on the door.

Food GP

Gross profit on food, measured ex VAT and earned from stock counts: opening plus purchases less closing, against food sales. The demo runs 68 per cent, and one point is £7,523 a year.

Hot takeaway

Hot in the legal sense, which is five tests, not a thermometer: heated to order, kept hot, heat-retentive packaging, advertised hot, or sold to be eaten hot. A fresh-baked item cooling naturally is cold in law, which is the sausage roll rule.

Labour percentage

The full labour cost, employer NIC and pension included, over sales EXCLUDING VAT: 32.1 per cent on the demo week. Measured against till takings it flatters itself by a sixth, which is how bad weeks get reported as good ones.

Loaded hourly rate

What an hour of staff actually costs: the wage plus holiday accrual at 12.07 per cent, employer NIC and the pension. The £12.71 floor loads to £16.36, 29 per cent above the headline, and rotas priced at the headline are under-costed by exactly that.

Marginal relief

The taper between the 19 per cent small profits rate of corporation tax and the 25 per cent main rate, for company profits between £50,000 and £250,000. Plenty of single-site venues live inside the band, where each extra pound of profit is effectively taxed hardest.

Menu engineering

Plotting every dish by popularity and cash margin into stars, plough horses, puzzles and dogs, each with its own move. The demo menu's bestseller turns out to be a plough horse fixed by 30p, which is the method's whole sales pitch.

Minimum wage floors

From 1 April 2026: £12.71 at 21 and over, £10.85 at 18 to 20, £8.00 under 18 and for apprentices. Keep the records six years; hospitality is where the inspectors go first, and uniform deductions that dip below the floor are the classic failure.

No-show

A booked table that never arrives. It costs the contribution, not the menu price, £13,645 a year at the demo's dozen a week, and deposits recover £8.33 of every kept £10 after VAT: their real work is deterrence.

Occupancy

Rooms sold over rooms available. The demo runs 72 per cent at a £95 rate, and neither number means anything alone: £85 at 80 per cent is fuller, busier and slightly poorer.

Personal licence

The individual qualification to authorise alcohol sales, held by the DPS and sensibly by a deputy too, because a resignation should not switch the bar off.

Plate cost

What the dish costs to put in front of a customer: the batch cost over portions counted at service, plus the garnish nobody counts. The demo dish is £3.43, and portion drift is the quietest way a menu loses two points.

PPDS

Prepacked for direct sale: anything packed on site before it is ordered, the sandwich in the chiller, needs a full ingredient label with allergens emphasised. In force since October 2021 and inspected with the hygiene visit.

Premises licence

The venue's authority to sell alcohol, serve late night refreshment and put tables outside, with conditions attached. Applications carry consultation periods, so it is a lead-time item on the opening checklist, not a last-week one.

Price file

The supplier's updated price list, and the quarter's early warning: the demo tracker's twelve watched items rose £2,458 a year in one file. Weight each rise by usage and decide dish by dish, re-price, re-portion or re-spec.

Prime cost

Cost of sales plus labour, the two controllable giants, as a share of sales. The demo runs roughly 63 per cent, 31 of cost and 32 of labour, and venues that hold prime cost under two-thirds tend to survive their quiet quarters.

RevPAR

Revenue per available room: rate times occupancy, £68.40 on the demo. It referees the argument between filling rooms and holding the rate, and it punishes both mistakes at once.

Rolling twelve months

The VAT registration test: the last twelve months' turnover, re-totalled every month end, against £90,000. Not the calendar year, not the tax year, and a strong Christmas can tip it mid-winter.

Seasonality index

Each week's takings as a share of the base week, written down from last year's tills. The demo quarter runs 0.86 to 1.12, and a forecast built on the index is honest twice a year exactly where the average lies.

Service charge

Discretionary, one the customer can strike off: a tip, outside VAT, inside the Tips Act. Compulsory: part of the price, standard rated, the business's revenue. The menu wording decides, so decide the wording.

Stock take

The weekly count, wet and dry, valued at cost. It exists because cost of sales is opening plus purchases less closing, and without the counts the GP is a guess wearing a percentage.

Temporary event notice

The light-touch permission for one-off licensable events, given to the council with at least ten working days' notice, with annual limits per premises and per person. The wedding in the field runs on these.

Tronc

The arrangement that distributes tips under an independent troncmaster, through its own PAYE scheme. Run properly it keeps tips free of BOTH National Insurances, £22,485 a year on the demo tips, and the independence is the condition carrying all of it.

Troncmaster

The person who decides the tip shares, independently of the employer: commonly a senior team member, never the owner in practice. They hold the written basis, sign the month and run the tronc PAYE.

VAT threshold

Registration becomes compulsory when rolling twelve-month turnover passes £90,000, with 30 days to register and VAT from the first day of the second month after. Zero-rated cold takeaway counts toward it; tronc tips do not.

Wastage

Binned food, priced twice: the bought cost, £6,760 a year on the demo, which is the real cash loss, and the menu value, £25,350, which is the ceiling if every plate would have sold. Book the first, quote the second to the kitchen.

Wet and dry split

Drink and food reported separately, in takings and in GP, because they carry different margins and hide each other when mixed. The split is the first thing a hospitality accountant looks for in a new client's books.

Wet stock

The cellar and the bar: kegs, casks, bottles and spirits, counted weekly at cost. Drink GP runs higher than food, 72 against 68 on the demo, which is why the wet and dry split is the bookkeeping's first rule.

Yield

The usable share of what you buy: fish, meat and veg lose trim and shrink, so a £6.80 kilo at 82 per cent yield really costs £8.29. Costing at invoice price understates every plate that uses it.

Zero-rated

VAT at nought per cent, which in hospitality means cold takeaway food that is not alcohol and not on the always-standard list: crisps, confectionery, soft drinks, bottled water, ice cream. Everything eaten in is standard rated.