LexiconEconomics
Central kitchen break-even
نقطة تعادل المطبخ المركزي
Definition
Central kitchen break-even is n*, the number of committed branches at which a central kitchen, warehouse or fleet pays for itself: fixed monthly cost divided by the net saving per branch. The Playbook builds only when committed branches exceed n* by the group's margin of safety and payback is within 30 months, 18 targeted.
In plain words
How many branches you need before a central kitchen pays for itself instead of being a burden.
Saudi usage
- At Monsha'at: تحليل نقطة التعادل (opens in a new tab) Accessed
Also searched as
- central kitchen payback
- commissary break-even
- vertical integration break-even
- n*
- نقطة تعادل المطبخ المركزي
Formula
Net saving per branch = Units per branch × Saving per unit − Distribution cost per branch
n* = Fixed monthly cost ÷ Net saving per branch
Monthly benefit = n × Net saving per branch − Fixed cost
Payback = Capex ÷ Monthly benefit
Canonical thresholds
| Threshold | Verdict |
|---|---|
| Committed branches exceed n* by the group's margin of safety, and payback ≤ 30 months (18 targeted) | Build |
| Payback 18–30 months | Build only with a lever plan (phased capacity or a leased site) |
| Otherwise | Not yet |
Source: Playbook §2 · Gate 8: Vertical integration (central kitchen and warehouse)
Example
Illustrative example · hypothetical figures
Fixed cost SAR 150,000 a month. Each branch draws 6,000 units at a SAR 3 saving (SAR 18,000) less SAR 4,000 of distribution: SAR 14,000 net. Break-even is 10.7, so 11 branches. With 20 committed branches the monthly benefit is SAR 130,000; on SAR 3,000,000 of capex, payback is 23.1 months: build with a lever plan.
Where it is used
In the Doctrine and the Playbook
Related terms
Should I open a new branch? Run the numbers
How to cite this definition
Alhajj, S. (2026). “Central kitchen break-even”. In The Revenue Engineering Lexicon, version 1.0. Riyadh. https://seiflden.com/lexicon/central-kitchen-break-even/