Canteen Business Reality: Providing Full Meals With Milk/egg For ₹75, But Officials Want A 10% Cut Of The Gross. Should I Walk Away?

Canteen Business Reality: Providing full meals with Milk/Egg for ₹75, but officials want a 10% cut of the gross. Should I walk away?

​Hi everyone, I really need some perspective here because I'm feeling lost and cornered.

​The Context

I am 26yo took over a mess/canteen contract after my father passed away last year. To be honest, I suspect the stress of this working environment contributed to his health issues, and now that I'm in the thick of it, I'm starting to see why.

​The Business Math

We provide a full day's food for ₹150 (₹75 per meal) in government hospital.

This isn't a basic meal. The menu includes: Roti, Rice, Dal, 2 Sabjis, Salad, plus Milk & Egg daily. The quantity is satisfactory.

​As anyone in the food business knows, margins are razor-thin at these rates. Inflation is up, vegetables are expensive, and labor costs aren't going down.

​The Issue

I’m dealing with the administration/officials who worked with my father for years. They talk to me like I’m a "kid" and act like benevolent uncles who are "supporting" me.

​But here's the reality: They are demanding a 10% commission on REVENUE (Total Bill), not profit.

​They don’t care about my costs. If I bill ₹1 Lakh, they want ₹10k flat immediately.

Given the menu quality and costs, my net profit margin is barely 10-15% on a good day. Effectively, they are asking for nearly 60-70% of my profit, leaving me with all the work, the risk, and the headache.

​The Conversation

I recently tried to explain the math to them—that at ₹75/meal with milk and eggs, I literally cannot afford a 10% cut on the gross bill.

They just dismiss me. They say things like "Don't take the load," "We are here to protect you," and "You are just a kid, you don't understand how files move."

They gaslight me into thinking this is normal "vyavahar" (practice) and imply that if I don't pay, my bills will get stuck or the contract won't renew.

​I feel trapped. I want to make this work to honor my dad's hard work, but I feel like I'm being bled dry by the same people who stressed him out.

​I need advice on this:

​Is a 10% cut on revenue (not profit) even remotely standard in government/institutional contracts? Or am I being taken for a ride because I'm young?

​At ₹150/day for that menu, is this business even viable with these demands? Should I just hand over the keys and walk away before I burn out like my dad did?

​How do you handle "elders" who use their age/relationship to shut down logical business arguments?

​Any guidance would be really appreciated.

location: dont wanna reveal