Common use of Pricing Strategy Clause in Contracts

Pricing Strategy. Big Ma’s Kitchen pricing will be similar to the competitor’s (competition-based pricing) initially and management may consider lowering prices initially to attract initial patrons. However, near term, when Big Ma’s Kitchen captures at least 2% of the local market, management plans to price products to be more reflective of acquisition costs. The menu items will be very simple. Southern dishes, desserts and baked goods, free organic coffee and fine organic teas. At Big Ma’s Kitchen, cost accounting is important, since the profitability of food can vary significantly and will initially determine the cost of the menu items. We will take advantage of our excellent credit terms with our suppliers and will also update our menu to take advantage of seasonality for example in local produce items. We will also closely monitor the Prime Cost Report which focuses on the controllable expenses of Cost of Goods Sold and Labor. As a new start-up we can currently control employee cost by hiring family members who will work for low and reduced wages.