Qapla
Engineer
The "3 time food cost" is the "rule of thumb" for food service ... it is not a "locked-in formula" that can't be adjusted
However, adjusting it disproportionately high kills sales rather than making additional revenue.
In your illustration, while it is true that location can have an impact on actual profit margins and therefore price setting, if a restaurant opens in a place with unusually high rent - they may not be able to adjust their price up enough to make up the difference ... that is one of the reasons many restaurants fail.
Amtrak may need to have "slightly" higher prices than a land-based place - but they cannot have disproportionately high prices just because they have a captive clientele ... there is a limit to how much people will pay for food, especially if that food is not up to the quality expected for the price.
However, adjusting it disproportionately high kills sales rather than making additional revenue.
In your illustration, while it is true that location can have an impact on actual profit margins and therefore price setting, if a restaurant opens in a place with unusually high rent - they may not be able to adjust their price up enough to make up the difference ... that is one of the reasons many restaurants fail.
Amtrak may need to have "slightly" higher prices than a land-based place - but they cannot have disproportionately high prices just because they have a captive clientele ... there is a limit to how much people will pay for food, especially if that food is not up to the quality expected for the price.