A Pindora QSR restaurant does average daily sales of Rs 1.2 lakh at an 18% four-wall margin and costs Rs 2.5 crore to fit out. What are the store economics, and how sensitive are they to daily sales?

A store sells Rs 4.38 crore a year and earns Rs 78.8 lakh of four-wall EBITDA, a 31.5% pre-tax return on its Rs 2.5 crore fit-out and a payback of about 3.2 years. Because rent and staff are fixed, each rupee of lost sales costs 58 paise of profit. Breakeven is about Rs 82,800 a day, so a 17% drop in daily sales cuts the return to about 15%.

Rs 1.2 lakh a day for 365 days is Rs 438 lakh, Rs 4.38 crore a year. At an 18% four-wall margin the store earns Rs 78.8 lakh. Against Rs 250 lakh of fit-out that is a 31.5% pre-tax return and a 3.2-year payback, which is what a QSR chain's rollout is built on. Before head office costs and tax the figure flatters the company, so say which level you are quoting.

A tuition centre with a fixed rent and fixed teacher salaries makes its money on the last few students in each batch. Split the store's costs into what moves with sales and what does not: 42% of sales is variable, and the rest of the costs, Rs 175.2 lakh a year of rent, staff and utilities, is fixed. So each extra rupee of sales keeps 58 paise, and each lost rupee costs 58 paise. That is operating leverageProfit moving by a larger percentage than sales because a large part of costs stays fixed. at store level, and it is why same-store sales growth is the number QSR analysts watch.

Three things. Whether Rs 1.2 lakh is a mature-store average or the new-store figure: new stores often open below it and take a year or two to ramp. Whether new stores are going to smaller towns or weaker sites where ADS is lower; the chart shows how quickly that costs return. And whether ADS is rising because of price increases or because of more orders, since only order growth protects the store if prices are cut. A rollout story that needs every new store to match the mature average is fragile at a breakeven of Rs 82,800.