Running your restaurant · Guide Updated September 2026

Hood Cleaning, Insurance, CO2: How to Know If Your Vendors Are Robbing You

You’re asking the wrong question, and it’s costing you

Every owner wants a number. “What should hood cleaning cost?” “What should insurance run?” I get why. You want a benchmark so you can look at your invoice and know instantly if you got taken. But there isn’t one universal number, friends, and anyone who gives you a flat figure is guessing. Hood cleaning depends on the size of your hood, how often your local fire code requires service, and how greasy your kitchen actually runs. Insurance depends on your state or province, your claims history, your coverage type, and your revenue. CO2 depends on how many gallons you push through your fountain machines each month. Two shops on the same street can have legitimately different bills.

So the flat number isn’t the tool. The tool is tracking these costs as a percent of your revenue, month over month, and watching the trend. That’s the same discipline I push on every other part of the business. You don’t need to memorize what a burrito should cost in every city in North America. You need to know your own numbers cold.

Where these costs actually live in your business

I’ve said this in a hundred consulting calls: there are three numbers every operator has to know. AOV, prime cost, and burn rate. Prime cost is a rough 25/25/25 split. Twenty-five percent to your ingredients, twenty-five percent to labor, twenty-five percent to rent and everything else. Hood cleaning, insurance, and CO2 all live in that last bucket. That bucket is the one owners watch the least, because rent is fixed and feels untouchable, and the little recurring vendor invoices get paid on autopilot without anyone looking twice.

Here’s the trap. Restaurant margins run 3 to 5%. That’s it. When your overhead bucket creeps from 25% to 27% or 28% because three different vendors quietly raised their rates over eighteen months, nobody notices any single invoice. But it eats your entire margin. You can be doing the exact same sales you did last year and be less profitable, and the invoices all look normal in isolation. That’s exactly how an operator ends up with strong sales on paper and a negative bank account. I lived that at 720 Sweets with ice cream sales that looked great and a bank balance that didn’t match. Creeping overhead is one of the quiet ways that happens.

The real diagnostic: trend, not the sticker price

I tell operators to watch trends, not absolutes, because a single data point never tells you the truth. Apply the same logic here. Pull your hood cleaning, insurance, and CO2 invoices for the last two years. Divide each one by that month’s revenue. If the percentage is flat or shrinking as your revenue grows, your vendor relationship is healthy. If the percentage is climbing steadily while your sales are flat or up, you have a pricing problem sitting in a contract somewhere, and it deserves a phone call before you touch anything else.

This also tells you where the real leak is. An owner who eyeballs a single hood cleaning invoice and says “that seems high” is guessing. An owner who tracks the percentage over six quarters and watches it climb has proof, and proof is what gets a vendor to renegotiate.

What actually moves the number

Once you’ve found the leak, the fix is boring and it works. Get three quotes, every year, on every recurring vendor contract, even the ones you like. Loyalty to a vendor is not a business strategy. Ask your insurance broker to shop your policy against two competitors annually, not just at renewal when you’re rushed. For hood cleaning, confirm your local fire code frequency requirement and make sure you’re not paying for a schedule tighter than what’s actually required, that’s a real and common overcharge. For CO2, check whether your supplier is billing you for a fixed number of tanks regardless of usage, versus billing you for what you actually pull.

Think about burn rate here too. Burn rate is what you’re paying out every month even at zero sales in the door. Every one of these vendor contracts is baked into that number. If you don’t know your burn rate, you don’t know how much of your fixed cost is these three line items versus rent versus insurance on the building itself. Go get the number before you negotiate anything. You can’t negotiate what you can’t name.

Build the habit, not the one-time fix

The operators who stay ahead of this don’t do a single audit and move on. They put a recurring calendar reminder, once a year, to pull every vendor contract and re-shop it. That’s a system, and systems are what let you run the business instead of the business running you. A five minute check twice a year on three invoices is nothing compared to the margin it protects. In a business with a 3 to 5% net margin, protecting even half a point on overhead is the difference between a good year and a break-even one.

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