Oven Scars

Playbook tool

Occupancy Cost & Lease Quota

The 6% rent benchmark is not a grade, it is a sales quota. Run it backwards and a space tells you how much revenue it demands before it earns its keep — ideally before you sign.

About 10 minutes · Free · Nothing you type leaves your browser

Have these in front of you

  • Annual base rent
  • CAM, property taxes, and insurance (the pass-throughs)
  • Actual or projected annual sales

The space

Monthly rent × 12. Base only — pass-throughs go below.
The triple-net pass-throughs. Base rent is the smallest number in the lease.
Leave blank if you’re still touring the space — the quota still works.
Standard is about 7% of sales above the breakpoint.
The sales quota this space demands

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Base rent as a share of sales

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0%6% ceiling15%
Total occupancy as a share of sales

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0%10% ceiling25%
Natural percentage-rent breakpoint

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This calculator runs entirely in your browser. Your numbers are never sent to Oven Scars, never stored, and never logged. Close the tab and they are gone.

The method

How to run this properly

  1. Add up all-in occupancy, not base rent

    Base rent is the smallest number in the document. All-in means base rent plus CAM, property taxes, and insurance — most restaurant leases are triple net, with base rent set low and the pass-throughs doing the climbing.

  2. Divide all-in occupancy by 0.10

    That is the annual sales the space demands to sit at the 10% total-occupancy ceiling. A space costing $60,000 a year needs $600,000 in sales just to reach the benchmark — before prime cost takes its 57–58%.

  3. Ask whether the trade area can pay that quota

    If the number looks heroic for the neighbourhood, the negotiation is not about shaving the rate. It is about walking.

  4. Find your percentage-rent breakpoint

    The natural breakpoint is annual base rent ÷ the percentage rate, typically 7%. Nothing requires either side to use the natural number — push it up, or you have agreed to hand the landlord a cut of every improvement you make to your own shop.

What this doesn’t do

None of this replaces a lease attorney. It means you walk into their office knowing which clauses to point at, and knowing the sales quota the space implies before you fall in love with the floor plan.

The reporting behind this tool

This calculator is the conclusion of an Oven Scars story, made executable. The article shows the worked example and links every figure to its primary source.

Read Your Lease Like a P&L