Food and labor costs take center stage in food service operations.

Which areas are primarily impacted by food service operations?

• A. Food and labor costs
• B. Marketing and sales
• C. Customer satisfaction and retention
• D. Supply chain and procurement

Answer: (A)

The primary areas impacted by food service operations involve food and labor costs. In the context of running a food service establishment, managing both food and labor costs is crucial for maintaining profitability and efficiency. Food costs include the expenses associated with raw materials, ingredients, and any waste generated during food preparation. This directly affects pricing strategies and menu offerings, as restaurants must ensure that their costs do not exceed the revenue generated from sales. Labor costs encompass wages, benefits, and any other expenses related to staffing. Effective food service operations require a careful balance of having enough staff to provide quality service while not overstaffing, which can lead to unnecessary expenses. By focusing on these areas, food service operations can optimize their spending and maximize their potential profits, making food and labor costs central to the overall effectiveness of the operation. Other options like marketing and sales, customer satisfaction and retention, and supply chain and procurement are certainly important aspects of a food service business, but they are secondary considerations that hinge upon successfully managing food and labor costs first.

Food service isn’t just about making tasty subs. It’s a numbers game, and for a Jersey Mike’s-style operation, two big levers steer the whole show: food costs and labor costs. If you keep those under a steady grip, you’ll see pricing, menu choices, and service quality fall into place more naturally. And yes, the rest of the pieces—marketing, sourcing, customer vibes—fall into line once those costs are tamed.

Phase 3 training often highlights this core idea: cost awareness isn’t a buzzword; it’s the backbone of everyday decisions. Let me explain how these two costs work, plus practical ways to keep them in check so the rest of the business doesn’t wobble.

Food costs: the raw material that drives every sandwich

Food costs are the dollars spent on ingredients, bread, toppings, sauces, and the waste that sneaks in when prep isn’t precise. In a Jersey Mike’s shop, every slice of cold cut, every shred of cheese, and every crumb of lettuce matters because it all shows up on the balance sheet as cost of goods sold (COGS). The bigger picture is simple: the less you waste and the more you control portion sizes, the friendlier your margins.

• What goes into food costs

• Raw materials: meat, cheese, bread, vegetables, sauces.

• Waste: trim, spoilage, over-prepping, and shrink from imperfect yields.

• Portion control: making sure each sandwich uses consistent amounts.

• Packaging: cups, wrappers, bags that add up if not tracked.

• Why it matters for pricing and menu design

• If ingredients creep up in price, your pricing or the menu mix should respond.

• A menu that leans on shared ingredients reduces waste and simplifies prep.

• Waste reduction isn’t just “nice to have”—it directly affects the bottom line.

• Quick ways to tighten food costs (without sacrificing taste)

• Standardize portions: use scoops, scales, or pre-measured portions so every sub is predictable.

• Track waste daily: note what’s being thrown away and why. Duplicate the successful fixes.

• Manage inventory smartly: rotate stock, keep a tight par level, and pull out fast-turn items that aren’t delivering.

• Design the menu with cost in mind: feature items that share ingredients, so a single stock item serves multiple subs.

• Negotiate with suppliers: regular price checks, bulk buys for staple items, and clear expectations about quality.

Labor costs: people power and the clock

Labor costs cover wages, benefits, payroll taxes, and all staffing tangles that come with running a kitchen and front-of-house. Think of labor as the human heartbeat of service—the people who slice, sizzle, greet, and take orders. The trick is to have enough hands when the doors open and enough scheduling discipline to avoid paying for idle time when business slows.

• What makes up labor costs

• Wages and benefits: base pay, overtime, health benefits, paid time off.

• Scheduling: shift lengths, number of staff on the floor, coverage during peaks.

• Training: onboarding and ongoing skills development that reduce errors and speed up service.

• Breaks and compliance: legally required rest periods and labor rules.

• Why it matters for service and profitability

• Too few staff leads to slow service and unhappy customers.

• Overstaffing drains money when the dining room is quiet.

• A consistent schedule helps staff morale and reduces turnover, which itself is a cost risk.

• Practical ways to tighten labor costs (human-friendly)

• Forecast the flow: use past sales data to predict peak times and schedule just enough people for those hours.

• Cross-train teammates: a single employee who can handle multiple roles keeps the line moving and reduces idle time.

• Use smart shift patterns: shorter, flexible shifts often beat long, rigid ones for cost control and staff happiness.

• Leverage tech wisely: simple scheduling software or POS data can reveal when you’re over or under-staffed.

• Focus on retention: better onboarding, clear growth paths, and timely feedback cut turnover, which saves money in the long run.

The ripple effect: how cost control fuels everything else

Food and labor costs don’t exist in a vacuum. When you keep them steady, you create room for the rest of the operation to shine.

• Marketing and sales become more meaningful

• With a stable cost base, you can price items with confidence and run promotions that don’t crater the margin.

• Menu design gains purpose: you can promote high-margin items or rotating specials that pair well with your core offerings.

• Customer satisfaction and retention stay intact or improve

• Consistent quality and speed come from well-controlled ingredients and properly staffed shifts.

• Fewer stockouts mean more confident, on-brand service—customers notice when their go-to sub is always there.

• Supply chain and procurement stay resilient

• Clear cost expectations help you negotiate smarter with suppliers.

• Consistent waste metrics reveal where to cut or switch ingredients without hurting flavor.

Real-world flavor: Jersey Mike’s in the daily rhythm

Picture a busy lunch rush at a Jersey Mike’s location. The shop runs a mix of hot subs and cold creations, with bread coming in daily, meats sliced fresh, and a chorus of toppings waiting in the cold case. In this environment, two anchors keep everything steady: precise food costs and efficient labor.

• Food costs show up on every menu decision

• If pepperoni slices get pricey, you might swap to a slightly leaner option for a stretch without sacrificing taste.

• A bread shortage forces a temporary menu adjustment; knowing your cost implications makes that adjustment smoother and less stressful.

• Labor costs show up in every shift

• A well-timed lunch rush doesn’t require a full brigade of sandwich maestros; it needs a few seasoned pros who can move quickly without losing warmth in customer service.

• Training each teammate to handle multiple steps in sandwich assembly speeds up service and reduces the need for extra temporary help.

Two big truths, framed simply

• Food costs and labor costs are the main levers. Get them steady, and you set a strong base for every other decision.

• The other areas—marketing, customer experience, procurement—are essential, but they’re easier to tune once the core costs are well-managed.

A practical starter kit for managers and team leads

If you’re in the trenches at a Jersey Mike’s-style shop or guiding a Phase 3 training module, here’s a compact action plan you can carry into any shift:

• Start with a daily cost snapshot

• Food cost as a percentage of sales and labor cost as a percentage of sales.

• Note any big swings and ask what changed—price bumps, waste volumes, or staffing gaps.

• Tighten the kitchen with small, repeatable habits

• Use measured portions for every topping; enforce a standard for bread weight and meat slices.

• Set a standard waste log and review it at the end of each day to spot patterns.

• Schedule with intention

• Build a forecast by daypart (lunch, afternoon, dinner) and align staff levels accordingly.

• Cross-train two or three teammates so service doesn’t stall when one person is out.

• Keep a lean supplier relationship

• Check prices monthly, but focus on quality and reliability.

• Seek simple substitutions that keep taste high but cost predictable.

• Measure, learn, adjust

• Track changes in costs week to week, not just month to month.

• Use the feedback loop from service times and guest comments to refine both food and labor plans.

A rhythm you can feel

The beauty of this approach is that it doesn’t demand grand leaps. It asks for steady attention to two things that matter most to the pocketbook and to guests: what goes into the sandwich and who’s standing behind the counter. When those pieces are aligned, you’ll see a smoother operation, steadier profits, and happier customers.

Let’s keep it real: costs will shift

Prices drift, supplier terms change, and staffing markets swing. The trick isn’t to chase every tiny fluctuation but to create a system that adapts without losing ground. Regular check-ins, honest data, and a culture that values consistent portion sizes and reliable staffing keep your operation resilient.

Why this mindset fits Jersey Mike’s spirit

Jersey Mike’s has a reputation for quality, speed, and a friendly, familiar feel. That blend depends on a steady hand on costs and on the team’s shared commitment to consistent service. When you treat food and labor costs as the central gears, you protect that reputation while keeping pricing fair and the experience warm. It’s not about starched routines; it’s about dependable execution that lets great sandwiches happen every day.

If you’re building a career or a store plan around these ideas, you’re not just crunching numbers. You’re shaping a guest experience—one that’s quick, reliable, and delicious, with staff who know their shifts, portions, and price points inside-out. That combination is what keeps a Jersey Mike’s running smoothly, season after season, no dramatic gimmicks required.

In short

• The core areas impacted by food service operations boil down to two big players: food costs and labor costs.

• Master these, and the rest of the business becomes easier to manage—pricing, menu choices, customer service, and supplier relations all fall in line.

• Use simple, repeatable practices: standardized portions, careful waste tracking, smart scheduling, cross-training, and steady supplier conversations.

• Remember, even with all the moving parts in a busy shop, the heart of profitability is a kitchen where ingredients are predictable and people are in the right place at the right time.

If you’re curious about how these ideas unfold in a real Jersey Mike’s setting, observe a busy lunch shift and notice how the numbers whisper the story: what’s in the pan, how many hands are on the line, and how those choices echo in smiles from the customers at the counter. That’s the rhythm of sound food service operations—the simple truth that keeps every sub consistent and every guest coming back for more.