More restaurants are killed by their lease than by their food. The industry's roughest, most reliable screen is one ratio: rent as a percentage of revenue. Under 10% is healthy, 10-15% demands a strong operation, and past 15% the location is eating the business. Enter the rent and your honest revenue projection, and this checker tells you which side of survival the lease sits on.
Rent-to-revenue ratio = monthly rent ÷ monthly revenue × 100. Healthy is under 10%, 10-15% is a caution zone requiring strong margins, and above 15% is a red flag that predicts failure for most formats.
| Monthly rent (incl. CAM/maintenance) | 150000 ₹ |
| Projected monthly revenue | 1200000 ₹ |
Because the rest of the P&L barely leaves room for more: food at ~32%, labor at ~28%, utilities, commissions and everything else at 15-20% leaves 20-25% before rent. Rent at 10% preserves a real margin; at 18% the operator is working for the landlord even in a good month.
Yes: bars and cafés with very high gross margins, tiny-kitchen QSRs in premium footfall locations, and cloud kitchens (where the equivalent discipline is rent under 6-8% because aggregator commission replaces the location premium). The benchmark bands here suit full-service dine-in; adjust with your format's margin structure.
Often better for a new outlet: a 8-12% revenue share caps the ratio by construction and shares the ramp-up risk. Watch the minimum-guarantee clause, a high MG converts the deal back into fixed rent exactly when you can least afford it, and model the MG month in this checker as if it were the rent.
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