Guide
Restaurant rent calculator: is the rent too high for your sales?
As a rule of thumb, rent at 8% of cautious sales or less is comfortable. Over 11% is high. In between, it can work but leaves little room. Cautious sales are 70% of what you expect to sell, because new places usually take time to build up.
The rule in one table
Find your expected monthly sales in the first column. The table takes 70% of it for you. The last two columns show the most rent that stays comfortable, and where rent becomes high. It works in any currency.
| Expected sales a month | Cautious sales (70%) | Comfortable rent (8%) | High from (11%) |
|---|---|---|---|
| 20,000 | 14,000 | 1,120 | 1,540 |
| 30,000 | 21,000 | 1,680 | 2,310 |
| 40,000 | 28,000 | 2,240 | 3,080 |
| 60,000 | 42,000 | 3,360 | 4,620 |
| 80,000 | 56,000 | 4,480 | 6,160 |
| 100,000 | 70,000 | 5,600 | 7,700 |
For comparison, the median US full-service restaurant spends 5.7% of sales on rent and other occupancy costs (National Restaurant Association, 2024). The 8% and 11% lines are our own rule of thumb, not research. At 8% of cautious sales, rent is 5.6% of your full guess, close to that median.
A worked example
A cafe expects 150 customers a day at 14 each, open 6 days a week. A month has about 26 trading days.
Expected sales: 150 × 14 × 26 = 54,600 a month. Cautious sales: 70% of that is 38,220.
The rent is 4,500 a month. That's 11.8% of cautious sales, over the 11% line.
Put another way, the takings of the first 3 trading days each month go to the landlord.
At 8%, those cautious sales carry about 3,060 of rent. To carry 4,500 at 8%, about 155 customers a day have to come in during the slow first months. That's more than the 150 the cafe expects once it's settled.
Why cautious sales, not your full guess
It's easy to guess high when you want a site to work. The first months are slower than planned while people find you. Judging rent against 70% of your guess shows whether the lease still works on a slow month.
If the rent only works at your full guess, the lease depends on everything going right.
What to count as rent
- Base rent from the lease, monthly.
- Outgoings the landlord passes on. In New Zealand and Australia that's often rates, insurance and building costs. In the UK it's the service charge. In the US and Canada they're often called NNN (triple net) or CAM (common area maintenance) charges.
- Leave out wages, power and stock. Put them in "other monthly costs" for the slow-start figure.
Rent in trading days
A percentage is easy to wave away. Days are not. At 8%, rent takes about 2 of 26 trading days a month. At 11% it's nearly 3. At 15% it's 4, so every Monday of the month goes to the landlord.
The slow start
Say your sales start at 40% of what you need to break even. You then fall short by about 60% of your fixed costs every month, whatever your food cost. Six months of that is the cash to have set aside before you open.
The calculator above works this out when you add your other monthly costs.
What this can't tell you
It tests the rent against your own guess. It can't tell you if the guess is right. For that, check who lives around the site and count who walks past. How to check foot traffic walks you through the count. How to check a restaurant location puts every check in order.