Restaurant occupancy cost calculator India
Calculate your total occupancy burden as a % of revenue. Enter rent, CAM, property tax, electricity, water, DG set, and other fixed location costs. Format-aware benchmarks (QSR, casual dining, fine dining, cloud kitchen) flag when rent or total occupancy is too high relative to revenue. Rent per sq ft and revenue per sq ft computed. Print or export CSV. No signup.
Restaurant details
Monthly occupancy costs
Enter all costs in ₹ per month. For annual costs (property tax, insurance), enter ÷ 12.
Occupancy cost benchmarks by format (India)
Benchmarks are % of gross revenue. High-rent metros (Mumbai SoBo, Delhi CP, Bengaluru Indiranagar) may push 2–3% above these thresholds — revenue must compensate. Cloud kitchens have the lowest benchmark; fine dining the highest due to elevated customer experience expectations.
| Cost item | Monthly (₹) | % of Revenue |
|---|---|---|
| TOTAL OCCUPANCY | ₹0 | — |
What is occupancy cost and why it is the second biggest P&L line
Occupancy cost is the total fixed cost associated with your restaurant's physical location — rent, electricity, water, CAM, property tax, and everything else you pay just to keep the lights on. After food and labour costs, occupancy is typically the third-largest expense category in a restaurant P&L, often running 12–18% of revenue.
Unlike food cost and labour cost — both variable costs that scale with revenue — occupancy cost is largely fixed. If revenue falls 20% this month, rent does not fall. This is why occupancy cost percentage is a critical metric: a restaurant doing ₹15 lakh monthly revenue on ₹1.2 lakh rent (8% rent) is healthy; the same restaurant during a slow month at ₹8 lakh revenue has a 15% rent — dangerously above the benchmark.
What goes into total occupancy cost
- Base rent. The rent per the lease agreement. Most leases in India are structured as a fixed monthly rent with annual escalation (typically 5–10%). Ensure you are modelling the current year's rent, not the lease inception rent. For restaurants on a revenue-share model, use your minimum guarantee rent for this analysis.
- CAM / maintenance charges. Common area maintenance charges billed by the mall, high-street association, or building management. In malls, this can be ₹50–200/sq ft annually. For standalone locations, this is the building society maintenance — typically ₹3,000–15,000/month.
- Property tax. Municipal property tax, charged annually. Divide by 12 to get a monthly charge. In Bengaluru and Mumbai, this can be significant for large-format restaurants (₹5,000–25,000/month after annual division).
- Electricity. For most Indian restaurants, electricity is the second-largest occupancy cost after rent, running ₹30,000–2,00,000/month depending on size, equipment, and AC load. Commercial tariffs are 2–5× residential tariffs in most states — do not model this at domestic rates.
- DG set / backup power. Generator fuel, oil changes, AMC contracts for the DG set. In cities with frequent power cuts (parts of UP, Bihar, Odisha), DG costs can add ₹15,000–40,000/month to occupancy cost. Cloud kitchens with high refrigeration loads often rely heavily on backup power.
- Water and sewage. Municipal water connection charges, tanker water if municipal supply is insufficient, and sewage/drainage charges. Restaurants with high water usage (full-service kitchens, bar with ice machines) can run ₹5,000–20,000/month.
What to do when occupancy cost is too high
- Renegotiate rent at renewal — or early. Most landlords in India expect negotiations at renewal. A restaurant that is performing poorly relative to its rent has stronger grounds to renegotiate than one that is doing well. Document your occupancy % and present it to the landlord — a lease revision is far better than a restaurant closure that leaves the property vacant for months.
- Sub-let unused area. If you have a back office, storage room, or unused seating area, consider sub-letting to co-working, dark kitchen, or a complementary business. This can effectively reduce your net occupancy cost by ₹20,000–60,000/month in major cities.
- Audit electricity consumption. Switch to LED lighting, install star-rated ACs, and maintain refrigeration coils regularly (dirty coils increase power draw by 20–30%). A ₹1,000 lighting audit can identify ₹10,000–20,000 of monthly savings in electricity. Install a unit-wise energy monitor to pinpoint the highest-draw equipment.
- Revenue per square foot is the real metric. Occupancy cost % is driven by revenue. A restaurant with ₹3,000/sq ft monthly revenue can absorb a much higher rent/sq ft than one doing ₹800/sq ft. Focus on revenue per sq ft (add a bar, extend hours, launch delivery) alongside cost reduction.
- For new locations: the 8–10× rent-to-monthly-revenue test. Before signing a lease, estimate your achievable monthly revenue and check that the monthly rent is no more than 8–10% of that number. A ₹3,00,000/month rent restaurant needs to do ₹30–37.5 lakh monthly revenue to be within benchmark. Run this test before signing — not after.
Where this fits
- Monthly P&L statement — occupancy cost is a major line item in the P&L; use this calculator to compute the total for the P&L
- Breakeven analysis — occupancy cost is the largest component of fixed costs in the breakeven formula; higher occupancy means higher breakeven revenue
- Rent escalation calculator — model the year-by-year impact of lease escalations on occupancy cost % as revenue grows
- Prime cost calculator — prime cost covers food + beverage + labour; adding occupancy cost gives total controlled cost, the full operating cost structure
- Startup cost calculator — for new locations, this tool helps model the ongoing occupancy burden against projected revenue before committing to a lease
- P6 — Unit economics pillar — complete guide to restaurant unit economics in India: food cost, labour, occupancy, and net margin