Free check · 30 seconds
My rent went up. Does the math still work?
Two numbers answer it: your rent against the published 6–12% band, and — when it's past the line — the revenue this rent now demands. Rent is the one cost you cannot adjust after signing; read it like the P&L will.
Only the figures you type, on this device — nothing is stored or sent unless you choose to send it. Not financial or investment advice.
Rent questions, answered straight
- What is a healthy rent-to-revenue ratio for a restaurant?
- As a working rule, rent is best kept between 6% and 12% of revenue — the high single digits to low-teens. Much above the low-teens puts permanent pressure on margin, because rent does not flex when revenue disappoints. It is a rule of thumb, not a law — your real numbers decide — but it is the single most useful filter on any site or renewal.
- My rent just went up — how do I know if the numbers still work?
- Divide the new monthly rent (including fixed service and chiller charges) by your realistic monthly revenue. Inside the band, the model still breathes. Above it, invert the question: divide the rent by the band ceiling to see the revenue the site now demands — and judge honestly whether this location can deliver it. If it cannot, the options are structural: renegotiate, re-concept toward higher revenue, or plan the exit before the lease plans it for you.
- Can a good operator out-run high rent?
- Usually not fully. A lease the revenue cannot carry is a structural problem, and structural problems are not solved by operating harder — more covers simply scale a model that loses margin on every one. That is why rent deserves more scrutiny than any other single line: it is the one you cannot fix after signing.
- Should service charges count as rent?
- For this ratio, yes — count every fixed occupancy cost the landlord bills (base rent, service charge, chiller charge) because the P&L pays them all whether or not guests arrive. The ratio only tells the truth when the numerator does.