Free Restaurant Tool
Restaurant Occupancy Cost Ratio Calculator
Rent is one of a restaurant's biggest fixed costs. The occupancy cost ratio tells you what share of sales goes to rent and occupancy — and whether it's sustainable. Enter your numbers to see your ratio, how it compares to the healthy range, and the most rent your sales can support.
Manageable, but watch it. 9.4% sits in the typical 6–10% range; tightening rent or growing sales builds cushion.
What is a restaurant occupancy cost ratio?
Your occupancy cost ratio is total occupancy cost (base rent plus CAM, property insurance, property taxes, and common-area charges) divided by sales. It's one of the fastest checks of whether a location is financially sustainable:
- Under 6% — healthy. You have room in the P&L for labor, food cost, and profit.
- 6%–10% — typical range. Workable, but leaves less cushion when sales dip.
- Over 10% — high. Rent is squeezing margins; it's a common reason a busy restaurant still struggles to profit.
Why it matters for cash flow and funding
A high occupancy cost ratio is one of the structural reasons restaurants run short on cash even with strong sales — fixed rent doesn't flex when a slow month hits. If your ratio is high, the fix is usually growing sales per square foot, renegotiating the lease, or bridging seasonal gaps with the right funding rather than a high-cost cash advance. See our guides on restaurant occupancy cost and restaurant working capital.
This calculator provides estimates for educational purposes only and is not financial advice. Healthy ratios vary by concept, market, and service model. Use it as a directional check, not a lending decision.
Tight on cash between strong months?
If rent and seasonality are squeezing your cash flow, we can help you find funding that fits — without locking you into an expensive cash advance.