For most independent restaurants, rent is the second-biggest fixed cost after payroll — and the only one you lock in for nine years upfront. Yet it's rarely run through the numbers: a space feels affordable or it doesn't, and that feeling is the only thing most operators have when they sign.
A broker quotes a rent per year or per month, and the question that follows is almost always the same one: is that a lot? The answer doesn't depend on the amount — it depends on what the space can actually earn back, and that's a number you need before you sign, not after.
This piece runs a restaurant's rent through seven different lenses: as a share of revenue, as a price per square metre, as extra covers a day, as a figure that climbs every year through indexation, as a choice between fixed and percentage rent, as a lease premium nobody counts, and as a ceiling you can calculate in advance instead of discovering the hard way.
The worked example below is a bistro doing €682,500 in revenue a year, 140 m², at an asking rent of €54,600 — a number that looks perfectly healthy on the day you sign. What happens over the following nine years is the whole reason this piece exists.
Further down, plug in your own numbers: your concept, expected revenue, the asking rent, floor area, lease term and indexation rate. Everything runs in your browser; nothing is sent or stored.
Why a rent that feels fine can still be wrong
Most operators compare a rent figure to what the previous tenant paid, or to what feels "normal" for that street. Neither says anything about what that rent demands from YOUR business — a space doing €682,500 in revenue and a space doing double that can carry the exact same rent, and it's comfortable for one and lethal for the other.
The second distortion is that a rent figure is a snapshot, not a contract. A commercial lease runs nine years in most EU countries, with an indexation clause that adds on automatically every year. A rent that's 8.0% of your revenue on day one won't be that on the last day of the lease — and almost nobody runs that math before signing.
And then there's what never shows up on the sign in the window: a lease premium paid to the outgoing tenant, a percentage-rent alternative the broker pitches as "more flexible", entry costs that never appear in the monthly figure. They're all part of the same decision.
The 7 numbers, and what each one tells you
They're in the order you actually need them: first whether the rent works today, then whether it still will in nine years.
1. The occupancy cost ratio: rent as a share of your revenue
This is the one number that genuinely matters, and it's a division: your annual rent including charges, divided by your expected annual revenue excluding VAT. On €682,500 in revenue and €54,600 in rent, that's 8.0% — and whether that's healthy depends entirely on your concept.
A bistro carries a healthy 6–10% of revenue in rent. Fine dining can run lower, because average spend is higher and the room turns fewer covers per hour. A café or bakery can run higher, because the rent stays relatively small against a high-volume turnover of low-ticket sales. The chart below sets all four concepts side by side.
The number cuts both ways. Below the band doesn't automatically mean "bargain" — it can also mean the location doesn't have enough potential to hit your revenue target. Above the band doesn't automatically mean "walk away" — but it does mean every other cost has to run tight for anything to be left over.
Rent and charges as a share of annual revenue excluding VAT. Guide ranges for independently run European restaurants — your own city and your own lease are the final word.
Fine dining carries the lowest band: average spend is high, but covers per hour are low, so revenue per square metre stays limited. A café or bakery carries the highest band for the opposite reason — a high volume of low-ticket turnover can absorb a bigger bite of rent.
2. Rent per square metre, against revenue per square metre
Price per square metre is the number a broker leads with, and it's the easiest one to misread — because on its own it says nothing. A space at €390 per m² a year is expensive for a business doing €4,875 per m² in revenue, and cheap for one doing double that.
So never look at rent per m² on its own — always weigh it against the revenue per m² your space can realistically turn. That second figure follows from your seat count, your turnover speed and your average spend — the same three numbers you already use elsewhere to build your revenue target.
The ratio of those two is exactly the same as the occupancy cost ratio above: rent per m² divided by revenue per m² comes back to 8.0%. Price per square metre is mainly useful for comparing different spaces against what they actually need to earn — not as a verdict on its own.
3. What your rent alone costs in extra covers a day
An annual rent is an abstract number until you turn it into what it actually demands every day. At an average spend of €37 per guest and a rent of €54,600 a year, your space has to serve 4 extra covers every single day of the year — including the slow Tuesday — just to cover the rent, before a single euro is left for staff, purchasing or profit.
That number makes the rent tangible in a way the annual figure doesn't. Don't ask yourself "can I afford €54,600 a year" — ask "can I land 4 extra guests a day, every day, all year round" — and add that on top of the covers you already needed for payroll and purchasing.
4. The indexation that lifts your rent every year
Almost every commercial lease carries an indexation clause: the rent rises annually with a price index, usually somewhere between 2 and 4%. In the worked example — €54,600 rent, 3% indexation, a 9-year lease — that looks harmless. It isn't.
The chart below shows what actually happens: the rent you sign in year 1 is not the rent you're paying in year 9. Without your revenue rising by a single euro, the occupancy cost ratio climbs from 8.0% in year 1 to 10.1% in year 9 — and by year 9 of this lease, the rent alone has already pushed past the 10% band that would keep the business healthy.
Over the full term you pay €554,687 in total rent — €63,287 more than the €491,400 you'd pay if there were no indexation at all. That gap isn't a rounding error; it's a second lease stacked on top of the first, spread over nine years.
The worked example: €54,600 rent at signing, 3% indexation a year, over a 9-year lease. The dotted line is the upper edge of the healthy band for this concept.
By year 9, the rent alone has already climbed past the 10% band for this concept. Over the full term you pay €63,287 more than the flat €491,400 the lease appears to promise at first glance.
5. The percentage-rent crossover: when a percentage costs more than a fixed rent
Some landlords — especially in shopping centres and busy retail streets — offer an alternative: no fixed amount, but a percentage of your revenue, say 9%. That sounds flexible, and it is, but flexible isn't the same as cheaper.
There's exactly one revenue level at which both options cost the same: the fixed rent divided by the percentage. For the worked example that's €606,667. Earn less than that and percentage rent is the cheaper option — it automatically drops with a slow patch. Earn more, as in this example with €682,500, and the fixed rent of €54,600 is the better deal: percentage rent would cost more the moment you're doing well.
This crossover point is precisely the number a broker never runs, because the answer depends on how well YOUR business does — not on what's good for the landlord.
6. The lease premium that quietly pushes your rent up
Taking over a space from a previous tenant often comes with a one-off payment for the lease itself — key money or a lease premium, separate from anything you pay for fixtures or goodwill. That amount never shows up in the monthly rent conversation, but it's very much part of your occupancy cost.
Spread it over the term of your lease and it becomes comparable to the rent itself: €31,500 over 9 years is €3,500 a year on top. Add that to the €54,600 fixed rent in the worked example, and the true occupancy cost ratio rises from 8.0% to 8.5% — still inside the band, but noticeably higher than the figure printed on the lease.
Always factor this in before weighing a space with a lease premium against one without. A lower monthly rent with a hefty entry cost isn't automatically the cheaper choice.
7. The maximum rent your business can carry — calculated in advance
This is the number you should really have started with: not "is this rent acceptable", but "what's the highest rent my business, at its own concept and its own revenue target, can healthily carry". The answer follows directly from step 1: the top of your band, times your expected revenue.
For the worked example that's €68,250 — the ceiling for a bistro on €682,500 in revenue. Against an asking rent of €54,600, that's €13,650 of headroom, today. But that headroom isn't a fixed margin: step 4 shows that indexation eats through all of it by year 9 in this example, without anything else changing.
So calculate this ceiling before you visit a space, not after. A rent that sits comfortably under your ceiling today gives you room to survive a disappointing first year and to absorb nine years of indexation without the business getting tighter every single year.
Run your own rent numbers
Enter your concept, your expected revenue, the asking rent and the lease terms. The fields start on the worked example's numbers above, so you can see how it reads straight away — overwrite them with your own space's figures.
You'll get your occupancy cost ratio against your concept's band, what the rent alone costs in extra covers a day, how much indexation adds over the term, the crossover between fixed and percentage rent, and the ceiling your business can actually carry.
Rent affordability scan
Your concept, your revenue and the lease terms — the full picture in one screen.
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The bands are guide ranges for independently run European restaurants, on revenue excluding VAT. They don't account for your city or your specific location. Everything runs in your browser; nothing is sent or stored.
Two numbers deserve extra attention if your screen shows them. The crossover between fixed and percentage rent only matters if your landlord actually offers that alternative — it's not a reason to ask for one if it's not on the table. And the year indexation breaks through your band isn't a forecast — it's what happens if your revenue stands still. If your revenue grows alongside it, that year moves further out.
What matters for every business: calculate your ceiling before you visit a space, not after. A broker shows you the space first and the rent second; you can do it the other way round.
What to do with this before you sign
Nobody can weigh seven numbers at once. This order works, because each step makes the next one possible.
Before you visit a space
- Calculate your ceiling: the top of your concept's band, times your realistic revenue target for that space.
- Write that ceiling down and bring it to every viewing — it doesn't change per space, but your revenue target does.
- Work out your average spend per guest, so you can turn any rent figure straight into extra covers a day.
When a concrete rent proposal lands
- Ask for the exact indexation clause — which index, how often it's applied — and run the full term through the calculator above.
- Ask explicitly about a lease premium or entry costs, even if the broker doesn't bring it up.
- Ask about break clauses — usually every three years on a nine-year lease — so you know when you can get out if indexation breaks the band.
Before you sign
- Run the rent against your current revenue target AND against a more cautious scenario of 15% less — a space that only works in the best case doesn't work.
- Weigh any percentage-rent alternative against the crossover point, not against your gut feeling.
- Put the ceiling and the year indexation breaks the band next to your other benchmarks — rent never stands apart from your food cost and your labour cost.
The rent you sign isn't the rent you'll pay in year nine
Almost every rent that looks reasonable on the day you sign genuinely is. The problem is rarely the starting figure — it's what happens over the following nine years without anyone running the numbers: indexation quietly stacking up, a lease premium that never appears in the monthly price, a percentage-rent alternative that turns out to cost more the moment you're doing well.
The full picture costs ten minutes of arithmetic before you sign, and the answer you get isn't "yes" or "no" — it's a ceiling, a year, and a difference in euros. With those three numbers you negotiate from a position a broker can't argue with.
Rent is one piece of your fixed costs. Put it next to your prime cost and your break-even point to see what's genuinely left over after rent, payroll and purchasing.