Restaurant rent and occupancy calculator

What you will enter

• Monthly base rent ($): The fixed monthly rent in the lease or the offer. Use the first-year figure; escalations are compared in the location tool.
• Other monthly occupancy charges ($): 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.
• Monthly net sales ($): Sales for a normal month, excluding sales tax and pass-through tips. Use your forecast until you have actuals.
• Occupancy target (%): Your planning benchmark. 10% is the starting test Ryan uses; it is not a rule. Enter 10 for 10%.
• Average order value ($): 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

Occupancy % = (base rent + other occupancy charges) ÷ monthly net sales × 100. Required sales = total occupancy ÷ (target % ÷ 100). Orders per open day = required sales ÷ open days ÷ average order value, rounded up.

A worked example

Fictional example: $5,000 base rent on $50,000 of monthly sales is 10%. Adding $1,000 of recurring charges makes total occupancy $6,000, or 12% of sales. 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.

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.

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.

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.

Keep working on the decision

• Read the rent guide: learn the 10% test before you sign
• Compare two spaces on total cash committed
• New to percentages? Start with restaurant math
• New to percentages? Start with restaurant math from zero.
• Add this decision to your guided opening plan

Sources and scope

• U.S. Small Business Administration: Plan your business (market research, business plan, startup costs)
• SEC: beginners' guide to financial statements

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