Restaurant rent and occupancy calculator

See base rent, percentage rent and total occupancy as a share of sales, then work backward to the monthly sales and daily orders a space requires at your target.

Free to use without signup. Your financial inputs stay in the browser and can be saved to a file on your device.

What you will enter

Monthly base rent ($): The fixed monthly rent in the lease or the offer. Use the first-year figure; escalations are compared in the location tool. For a per-square-foot quote, multiply by the square feet, then divide by 12 if the quote is per year.
Other monthly occupancy charges ($): CAM or common-area charges, property-tax and insurance pass-throughs, required maintenance contracts and any other recurring charge the lease adds. Enter 0 only if the lease has none.
Percentage rent rate (%): Required. Enter 0, the starting value, when the lease has no percentage-rent clause; otherwise the rate, 6 for 6%. The tool treats the monthly sales below as the average month of the lease year and as the sales the lease charges on, and shows the year's percentage rent as an average month. Seasonal sales, a different gross-sales definition or a breakpoint settled month by month are outside it.
Percentage-rent breakpoint (annual sales) ($): The lease-year sales above which the percentage applies. 0 with a rate means the percentage applies to all sales; ignored, and may be left blank, when the rate is 0. A monthly breakpoint reconciled over the year is 12 times the monthly figure; one settled month by month with no annual true-up is outside this tool.
Monthly net sales ($): Sales for a normal month, excluding sales tax and pass-through tips. Use your forecast until you have actuals. With percentage rent, this is also the average month of the lease year.
Total-occupancy target (%): Your planning benchmark, applied to total occupancy: base rent, the charges above and any percentage rent. 10% is the starting test Ryan uses; it is not a rule. Enter 10 for 10%.
Average order value ($): Net sales per order. Used to translate required sales into orders per day.
Open days per month (days): A whole number from 1 to 31.

The formula

Percentage rent (the year's amount as an average month) = rate × (12 × monthly net sales − annual breakpoint) ÷ 12, or 0 below the breakpoint; the entered month stands for the average month of the lease year. Occupancy % = (base rent + other occupancy charges + percentage rent) ÷ monthly net sales × 100. Required sales = (base rent + charges) ÷ (target % ÷ 100) while that is below the breakpoint; above it, (base rent + charges − rate × monthly breakpoint) ÷ (target − rate). If the rate is above the target, the target holds only up to (rate × monthly breakpoint − base rent − charges) ÷ (rate − target). The target applies to total occupancy, not base rent alone. Orders per open day = required sales ÷ open days ÷ average order value, rounded up. Downside cushion = (entered sales − required sales) ÷ entered sales × 100.

A worked example

Fictional example: 2,000 square feet quoted at $30 per square foot per year is $60,000 a year, or $5,000 a month of base rent. On $50,000 of monthly sales that is 10%. Adding $1,000 of recurring charges makes total occupancy $6,000, or 12% of sales. The lease also charges 6% percentage rent above $1,000,000 of annual sales, the natural breakpoint ($60,000 ÷ 0.06), so at $600,000 a year none is due. At a 10% total-occupancy target the space needs $60,000 a month, about 116 orders per open day at a $20 average order over 26 days. The entered sales would have to rise 20% to get there.

How to use the result

Learn the percentage before you argue about it

Divide the cost by the sales, then multiply by 100. $5,000 ÷ $50,000 = 0.10, which is 10%. When sales fall to $40,000 the same rent becomes 12.5%: the rent did not move, the denominator did.

Base rent is not the occupancy cost

Ask the landlord in writing what the lease adds each month: common-area charges, tax and insurance pass-throughs, mandatory service contracts. A quote that looks like 10% can be 12% or more once those are counted.

Work backward and test the sales, not the rent

Required sales is the number to investigate. Can the location, the kitchen and the hours really produce that many orders? If the only way to hit the target is to raise the sales forecast, the forecast is doing the work the demand test should do. The downside cushion shows how far sales can fall before the target is broken; a thin cushion means one slow month changes the answer.

Convert a per-square-foot quote before you enter it

Listings often price space per square foot. Confirm whether the figure is per year or per month, and whether it is base rent only. $30 per square foot per year on 2,000 square feet is $60,000 a year, or $5,000 a month. Under a triple net (NNN) lease the tenant also pays a share of property taxes, insurance and maintenance: $6 per square foot per year of those charges on the same space adds $1,000 a month to the charges field.

Keep the breakpoint and the sales in the same period

A natural breakpoint is annual base rent ÷ the percentage: $60,000 ÷ 0.06 = $1,000,000 a year, about $83,333 in an average month. Dividing the monthly rent by the rate gives that monthly figure, $5,000 ÷ 0.06 = $83,333; it is only wrong if entered here as the annual breakpoint, where it would be twelve times too small and charge percentage rent on sales that owe none. This tool treats your monthly sales as the average month of the lease year; with strongly seasonal sales, or a breakpoint settled month by month with no annual true-up, work from the lease's own schedule instead. If the lease sets the breakpoint lower, say $600,000 a year, the same space pays 6% on every dollar of an average month above $50,000 and needs $75,000 a month, not $60,000, to reach a 10% target: (6,000 − 0.06 × 50,000) ÷ (0.10 − 0.06).

Questions owners ask

Is 10% the right rent for every restaurant?

No. It is a benchmark Ryan uses to start the conversation, and this tool labels it that way. A higher ratio can work with a strong operating case and a lower one can still fail on food or labor. Use it to ask what sales the space requires, then test that number.

Does the target apply to base rent or to total occupancy?

This tool applies it to total occupancy: base rent, the recurring charges you entered and any percentage rent. That is the stricter planning test. With percentage rent it uses the annual cost averaged per month; actual payment timing follows the lease. The result panel also shows what the same percentage would require on base rent alone, so you can see how much the charges change the answer.

Should utilities go in occupancy charges?

Only if they are billed by the landlord as part of the lease and you are not counting them elsewhere. Keep each cost in one place so the P&L and this ratio agree.

What about the deposit and the build-out?

They are cash commitments, not monthly occupancy. Compare them between spaces in the location comparison and put their dates on the opening cash calendar.

Is percentage rent the same as rent as a percentage of sales?

No. Rent as a percentage of sales is a ratio you calculate for any lease. Percentage rent is a lease clause: the tenant pays base rent plus an agreed share of sales above a breakpoint. When a lease has one, that payment is part of the occupancy cost, so this tool adds it before comparing occupancy with your target. With 6% above a $1,000,000 annual breakpoint and $100,000 in an average month ($1,200,000 a year), the year's percentage rent is 0.06 × ($1,200,000 − $1,000,000) = $12,000, an average of $1,000 a month. When it is actually paid depends on the lease's reporting and reconciliation.

Keep working on the decision

Sources and scope

Planning estimates based on your inputs. Check the assumptions against your actual quotes, recipes and operating records. Not legal, tax or accounting advice.

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