A space that's too large for your current revenue eats into your profits. High rent costs with low occupancy means you need to earn more per guest to break even. In this article you'll learn what options you have and how to make the best decision.
First, calculate your rent cost per cover
Before you make decisions, you need to know how much weight the rent carries. Divide your monthly rent by the number of guests you receive.
💡 Example:
Restaurant with 80 seats, rent €8,000/month:
- Current occupancy: 40 guests/day, 25 days open
- Total guests/month: 1,000
- Rent cost per guest: €8,000 / 1,000 = €8.00
At full occupancy this would be €4.00 per guest
A typical rent cost ranges between €2.50 and €5.00 per cover. If you're above €6.00, you have a problem you need to solve.
Option 1: Sublet part of your space
Split your restaurant and sublet part of it to another concept. This could be a coffee bar, lunch spot, or even another restaurant operator.
💡 Example:
You sublet 30% of your space for €2,500/month:
- Your rent drops from €8,000 to €5,500
- You keep 56 seats
- Rent cost per guest: €5,500 / 700 guests = €7.86
Still high, but €2,500 less risk per month.
Advantages: Direct cost reduction, less risk, possible cross-pollination of guests.
Disadvantages: Less flexibility, possible noise issues, sharing facilities.
Option 2: Change your concept to higher revenue per m²
Some concepts generate more revenue per square meter than others. Think about:
- Fastcasual: Faster table turnover, more guests per day
- Buffet restaurant: Less staff, higher margins
- Mixed concept: Lunch, drinks and dinner in the same space
- Event venue: Private dining, corporate events
⚠️ Note:
A concept change costs money (renovation, new equipment, marketing) and time. Calculate whether the extra revenue outweighs the investment costs.
Option 3: Negotiate your lease contract
Many landlords are willing to talk if the alternative is an empty space. Possible negotiation points:
- Temporary rent reduction: 6-12 months to grow
- Revenue-based rent: Percentage of revenue instead of fixed amount
- Shared marketing costs: Landlord invests in your growth
- Shorter notice period: Less risk for you
💡 Negotiation example:
Current situation: €8,000 fixed rent
Proposal: €5,000 fixed + 3% of revenue above €50,000
- At €60,000 revenue: €5,000 + €300 = €5,300
- At €80,000 revenue: €5,000 + €900 = €5,900
Landlord benefits from your growth.
Option 4: Move to a smaller location
Sometimes strategic downsizing is the best option. Look for a location that better matches your current revenue level.
Calculate:
- Moving costs (renovation, inventory, lost revenue during move)
- Penalty for early termination of current contract
- Monthly savings in new location
If you break even within 18-24 months, moving can be smart.
Decision matrix: which option fits you?
💡 Decision aid:
- Subletting: If your location is good but too large
- Concept change: If your location is perfect and you want to grow
- Negotiating: If your landlord is reasonable and you need time
- Moving: If your location fundamentally doesn't work
Measure your choice against your break-even point. Calculate how many guests you need at minimum to cover all costs. With an app like KitchenNmbrs you immediately see what each option means for your profitability.
How do you tackle this step by step?
Calculate your current rent cost per cover
Divide your monthly rent by the number of guests per month. This gives you insight into how much weight the rent carries per guest.
Inventory all options with costs and benefits
Create an overview of subletting, concept change, negotiation and moving. Calculate the financial impact for each option.
Test your chosen strategy on a small scale
Start with a pilot or temporary solution. First negotiate a temporary rent reduction for 6 months to create space for other steps.
✨ Pro tip
Always start by negotiating your rent. Landlords prefer to talk with an existing tenant than having to search for new ones.
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 normal rent cost per cover?
A typical rent cost ranges between €2.50 and €5.00 per guest. Above €6.00 per cover, your rent becomes a problem for your profitability.
Can I just sublet part of my restaurant?
This depends on your lease contract. Many contracts prohibit subletting without landlord permission. Check your contract first and ask for permission.
How do I calculate if moving is financially smart?
Add up all moving costs (renovation, penalty, lost revenue) and divide by your monthly rent savings. If this comes out to under 18-24 months, moving can be smart.
What if my landlord won't negotiate?
Then you have to choose between the other options: subletting, concept change or moving. Sometimes it helps to show concrete figures of your situation.
Which concepts generate the most revenue per m²?
Fastcasual concepts, buffet restaurants and mixed concepts (lunch + dinner + drinks) often generate more revenue per square meter than traditional restaurants.
📚 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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