What percentage of Indian restaurants fail in year one?

Industry surveys and operator panels consistently cite 60–70% closure or handover within 12 months — often before unit economics were modelled.

What are the leading indicators of failure?

Break-even miss rate, food cost % above format benchmark, prime cost above 65%, and weak 30-day repeat cohorts — usually visible by month four.

Why Indian restaurants fail in year one (4 numbers that predict it)

60 to 70% of Indian restaurants close within their first year. The food is rarely the problem. These four numbers, break even, food cost %, prime cost, and 30 day cohort retention, predict the outcome with surprising accuracy by month four.

What actually kills restaurants

It isn't bad food, low footfall, or aggressive competition. The dominant patterns we see in pilot data and in industry post-mortems:

Working capital exhaustion: month 2 EMI + salaries + rent without enough revenue cushion.
Food cost drift: opening at 30%, drifting to 38% by month 5 without realising it.
Aggregator commission compounding: chasing orders instead of profitable orders.
Retention collapse: opening week is great because of curiosity; week 6 is the truth.

Number 1: break even (and how often you cross it)

If you don't know your daily break even, you can't know if today was profitable. Track ‘days above break even’ in a calendar view from week one. Healthy: 22+ days/month. Tight: 18 to 21. Dying: <17.

Number 2: food cost %

Track weekly, not monthly. A 2 point drift over 4 weeks is the canary. Action: pull a recipe cost on your top 6 dishes against current mandi prices. Most drift comes from 2 to 3 dishes, fix them, not the whole menu.

Number 3: prime cost

Prime cost = food cost + total labour. Healthy Indian casual dining: 55 to 62%. QSR: 50 to 58%. Above 65% the business is structurally fragile; there is no margin left for rent + utilities + everything else. Cut labour before menu price.

Number 4: 30 day cohort retention

Of every 100 first time customers in week 1, how many came back within 30 days? Healthy: 22%+. Below 12% you have a product market problem, not a marketing problem. The most common cause: opening week menu was different from steady state menu.

When to pull the rip cord

If three of these four are red by month 4, the business is unlikely to survive year one. The hard call is to close in month 5 or 6 (with cash left to refund deposits and pay vendors) versus month 11 (after burning through personal savings and family loans). The numbers tell you which is which.

How to track these from week one

Forkcast monitors all four in the daily operating brief, with alerts when any number crosses its band. The free tools also help if you're pre launch. Check your viability before you sign a lease.

Score your launch viability →