Key Takeaway
The 30 30 30 rule in restaurants is a cost control framework covering food cost, labour cost, and fixed expenses. This blog explains its relevance for Indian restaurant owners.
The 30 30 30 rule in restaurants is a simple cost control framework used by restaurant owners to manage profitability. In the Indian restaurant context, this rule helps owners understand how revenue should be divided between food cost, labour cost, and rent or fixed expenses.
Many Indian restaurants struggle despite good sales because costs are not balanced properly. The 30 30 30 rule gives a clear structure to identify where money is leaking.
Breakdown of the 30 30 30 Rule
The rule divides restaurant revenue into three major expense categories.
- 30 percent for food cost
- 30 percent for labour cost
- 30 percent for rent and fixed operating expenses
The remaining margin is used to cover variable costs, taxes, and profit.
This rule is widely discussed because it is easy to remember and practical for daily restaurant management.
Food Cost Under the 30 30 30 Rule
Food cost is one of the biggest controllable expenses in restaurants.
In Indian restaurants, food cost increases due to:
- Over portioning during rush hours
- Untracked kitchen wastage
- Manual inventory errors
- Price fluctuation of raw materials
When food cost crosses control limits, profit reduces even if billing looks strong.
Labour Cost Under the 30 30 30 Rule
Labour cost is a major challenge for Indian restaurant owners.
Common labour cost issues include:
- High staff turnover
- Extra staff during weekends and festivals
- Attendance mismatch
- Overtime without tracking
Without proper labour tracking, restaurants often cross the 30 percent range without realizing it.
Rent and Fixed Expenses in the Rule
Rent and fixed expenses include:
- Shop rent
- Electricity and water bills
- Maintenance
- Internet and software costs
In metro cities, rent alone can cross safe limits. In Tier 2 and Tier 3 cities, electricity and maintenance costs increase during peak seasons.
Restaurant owners use the 30 30 30 rule to evaluate whether location and scale are sustainable.
Why the 30 30 30 Rule Breaks in Indian Restaurants
In real Indian restaurant operations, the rule often breaks due to:
- Swiggy and Zomato commission pressure
- Discount driven sales
- Power cuts and generator costs
- Manual billing errors
- Inventory loss not recorded
This is why the rule should be used as a reference, not a rigid formula.
Using the 30 30 30 Rule for Daily Decision Making
Indian restaurant owners use this rule to:
- Review monthly performance
- Identify cost leakages
- Control unnecessary expenses
- Plan menu pricing
- Decide staff strength
It helps owners understand whether high sales are actually leading to profit.
Role of Restaurant Management Systems
Manual tracking makes it difficult to apply the 30 30 30 rule accurately.
Restaurant management systems help owners by:
- Tracking food cost through inventory
- Monitoring labour attendance and shifts
- Recording daily sales and expenses
- Giving clear reports for review
Systems like Feedo act as a support layer by connecting billing, inventory, staff, and reports in one place, helping owners review costs without manual calculations.
Is the 30 30 30 Rule Still Practical Today
For Indian restaurants, the 30 30 30 rule remains a useful reference point.
However, due to aggregator dependency and rising costs, owners often adjust percentages based on:
- Business model
- Location
- Order mix
- Service type
The value of the rule lies in awareness and discipline, not exact numbers.
Closing Note
The 30 30 30 rule in restaurants is a simple framework that helps reflect cost balance. It does not guarantee profit, but it highlights problem areas early.
For Indian restaurant owners, regularly reviewing food cost, labour cost, and fixed expenses using this rule helps prevent silent losses and improves long term sustainability.
Related Topics
Restaurant Management
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