I have a burger/fries business in a mall’s foodcourt. My current rent is 1000.00/month and 10% of my sales over $10,000.00/month so a straight 10% of my sales. The mall pays water, electric, garbage. I pay gas. My first years sales were $200,000. I have seen you talking about rent being around 6-8% and sometimes around 10% so I guess I’m confused. Is that a good lease?
I also budget for 30% Food Cost, 25% Labor Cost, and 10% for Misc Cost (Gas, Phone, Insurance, Payroll taxes, Pest Control, Linen, Credit Card Fees, and Upkeep. Does all that sound reasonable?
So our answer is:
- Your total occupancy costs (everything it cost you to be in your location…rent, CAM, utilities, etc…) should total no more than 6-8% of gross sales. Since your effective occupancy rate is over 16%, I’d say this is definitely a bad lease situation.
- Payroll taxes go into Labor Cost.
- Without knowing more details about your concept or your product mix and looking at your P&L, it’s hard to say anything further.
You Have Two Options:
- Grow your business.
- Make excuses.
Our powerful business programs are about helping you and your business master the fundamentals and create positive, long-term opportunity. No other program(s) offers more value with the immediate impact or greater ROI than ours or creates the level of impacting and sustainable change necessary to grow your business.
Call Us Toll Free 888-998-8744 or use the contact form to talk about how we can help you realize an opportunity.