Picture an external F&B partnership as splitting a restaurant - you own the building, they run the kitchen and share the profits. You handle the space and utilities while they manage cooking and service. Setting the right fee means finding that sweet spot between your operating costs, their earning potential, and what they actually bring to your customers.
What is a license or concession fee?
A license or concession fee is what an external F&B provider pays to operate at your location. You've got several pricing structures to choose from:
- Fixed rent: Monthly set amount
- Percentage of revenue: X% of everything they sell
- Combination: Base rent + percentage above threshold
- Minimum guarantee: The higher of fixed amount or percentage
Calculate your cost basis
Before setting any rate, figure out what it actually costs you to host the external provider.
💡 Example costs per month:
- Space (30m²): €1,200
- Energy (gas, water, electricity): €400
- Extra cleaning: €200
- Insurance expansion: €100
- Administration: €150
Total cost basis: €2,050/month
This cost basis becomes your absolute floor. Anything below this means you're subsidizing their business.
Determine the added value
Beyond covering costs, think about what the F&B provider actually delivers:
- More visitors: Does their concept draw extra guests?
- Longer stay: Do guests linger longer because of the food?
- Higher spending: Do guests spend more on your core business?
- Less own investment: Do you avoid investing in your own kitchen/staff?
⚠️ Reality check:
Measure added value objectively. Location owners often overestimate how much extra revenue an F&B partner actually generates.
Common fee models
Different locations and F&B concepts use different pricing structures:
Fixed amount per m²:
- Office locations: €25-€40/m²/month
- Retail locations: €40-€80/m²/month
- Tourist locations: €60-€120/m²/month
Percentage of F&B revenue:
- Standard: 8-15% of net revenue
- Prime locations: 12-20% of net revenue
- Exclusive deals: 15-25% of net revenue
💡 Example combination model:
Restaurant in hotel, 40m² kitchen space:
- Base rent: €1,500/month
- + 8% of revenue above €15,000/month
- At €25,000 revenue: €1,500 + (€10,000 × 8%) = €2,300
This gives you security (base) and upside potential (percentage).
Calculate with net revenue
If you're using a percentage model, always work with net revenue excluding VAT. The F&B provider sends that VAT to the tax authority, not to you.
Formula:
Fee = (Gross revenue / 1.09) × Percentage
💡 Example calculation:
F&B revenue March: €32,000 incl. 9% VAT
- Net revenue: €32,000 / 1.09 = €29,358
- Fee (12%): €29,358 × 0.12 = €3,523
Your fee: €3,523
Negotiation factors
Your fee depends on various factors you can use as negotiation points:
Your advantages:
- Prime location with heavy foot traffic
- Existing customer flow
- Exclusivity (no other F&B on-site)
- Long-term contract security
Their advantages:
- Established concept/brand recognition
- Bringing their own customer base
- Interior design investments
- Marketing and promotional efforts
⚠️ Contract essentials:
Lock in agreements about operating hours, quality standards, and exclusivity rights. A poor F&B partner can seriously damage your reputation.
Monitoring and adjustment
One of the most common blind spots in kitchen management is failing to track the ongoing profitability of F&B partnerships. Smart concession agreements include clauses for monitoring and adjustment:
- Revenue reporting: Monthly transparency on sales figures
- Indexation: Annual adjustment of fixed components
- Review: Percentage revisit after 2-3 years
- Minimum guarantee: Base fee even if revenue disappoints
Food cost calculators can help you track F&B revenue and your operational costs, so you can verify whether the partnership stays profitable over time.
How do you calculate the concession fee? (step by step)
Inventory your costs
Add up all costs you incur for the F&B provider: space, energy, cleaning, insurance, and administration. This is your minimum fee to break even.
Estimate the added value
Determine how much extra revenue or cost savings the F&B partner brings you. Think about more visitors, longer stays, or less need for your own catering investments.
Choose the right model
Decide between a fixed amount, percentage of revenue, or a combination. With uncertain revenue, opt for a minimum guarantee plus percentage above a threshold.
Negotiate and document
Use market-standard rates as a starting point (8-15% of net revenue or €25-€80/m²). Lock in monitoring, indexation, and review contractually.
✨ Pro tip
Test their concept with a 60-day trial period before finalizing rates - track actual customer counts and spending patterns. Most F&B partnerships perform 20-30% different than projections suggest.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
What is a reasonable concession fee for a restaurant?
For restaurants, expect 8-15% of net revenue, or €40-€80 per m² monthly. Prime locations can command 12-20%. The exact rate depends on your location's foot traffic and the exclusivity you're offering.
Should I calculate with revenue including or excluding VAT?
Always use net revenue excluding VAT. The VAT goes directly to tax authorities, not to you as the location owner.
What if the F&B provider generates low revenue?
That's exactly why minimum guarantees exist - you get the higher of either a fixed amount or percentage of revenue. This ensures you always cover your basic costs, regardless of their sales performance.
How do I verify that reported revenue is accurate?
Require monthly revenue reports and request access to their POS system data for transparency. For larger partnerships, ask for quarterly audited statements to ensure you're getting accurate numbers.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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