Retail & franchise learning center
Restaurant occupancy costs
How much rent should a burger restaurant pay?
There is no single rent percentage that fits every burger restaurant. Sales, location, store format, lease terms, and operating margins all matter. Start by calculating the full annual occupancy cost, then compare locations and test the charges against each lease.
Calculate the whole occupancy cost
Annual occupancy cost = base rent + percentage rent, if any + CAM + property tax + insurance + other occupancy charges the lease requires.
Occupancy-cost ratio = annual occupancy cost ÷ annual gross sales × 100.
Use the same reporting period for costs and sales. Keep sales tax, discounts, delivery fees, and franchise reporting definitions consistent with your own financial statements.
A worked example
| Annual item | Example amount |
|---|---|
| Base rent | $72,000 |
| CAM | $18,000 |
| Property tax | $12,000 |
| Insurance | $3,000 |
| Total occupancy cost | $105,000 |
If annual gross sales are $1,500,000, the example ratio is 7% ($105,000 ÷ $1,500,000). This illustrates the calculation; it is not a market benchmark or a conclusion that the charges are correct.
What to compare across locations
- Total cost per square foot: Divide annual occupancy cost by the premises area stated in that location's lease.
- CAM and NNN components: Keep rent, maintenance, taxes, and insurance separate so a change in one category is visible.
- Estimated versus actual payments: A reconciliation should credit payments already made during the year.
- Year-over-year changes: Record the stated reason for a jump and request backup before treating it as an error.
- Lease differences: One store may have a cap, exclusion, or allocation method that another does not.
High cost is a business question; an overcharge is a document question
A high occupancy-cost ratio may reflect an expensive location, weaker sales, or a charge worth investigating. It does not prove the landlord billed contrary to the lease. To test a CAM or NNN line, compare the lease, annual statement, and supporting invoices or allocation records.
Use our burger restaurant CAM checklist for that review.
Check the lease behind the number
Upload your lease for a free preview of its CAM and NNN terms. Add an annual statement and supporting PDFs before checkout if you have them. The $49.99 report flags visible billing questions and states what still needs verification.
Upload a lease for a free preview