Percentage Rent Conditions

Percentage rent conditions allow you to create rules that determine what sales data will be considered in percentage rent calculations.

For each condition, you can select which sales categories to exclude from the percentage rent calculations, as well as create rules that define the breakeven point and the maximum percentage rent to be paid.

You can also enter custom formulas to calculate your percentage rent by enabling the Formula Percentage Rent setting in Admin.

Note: Ensure that the selected internal categories and subcategories are mapped to the external categories selected when the sales data was entered. If the categories are not mapped or the wrong category is selected, the Percentage Rent report will not be accurate.

Percentage rent conditions cannot have overlapping dates and can only be added while the contract status is "Draft". After your conditions are created, you can then create a percentage rent period and calculate owed amounts.

To create a percentage rent condition:

Click Main Menu > Contracts, and open the required contract.
Click Percentage Rent.
Under the Conditions section, click .
Select the date range for the condition by entering the Date From and Date To. The date range determines when the rules will apply. Click Next.
On the Exclusions page, select internal sales categories and sub-categories to exclude from this condition. Click Next.
On the Rules page, click .
Optionally select one or more Category and Subcategory to which this rule will apply. The Category field is set to "All Categories" by default. Note that you cannot create another percentage rent rule with the same Category and Subcategory within a percentage rent condition.
You can optionally choose to enable and fill in the Minimum (per Year) and Maximum (per Year) fields. These fields determine the minimum and maximum amount of percentage rent to be paid per year.
Select the Adjustment Frequency to determine the number of periods per year.
Select the Payment Frequency.
Optionally, select the Expense Categories that will be considered as the provisional rent to calculate payments from.
Select the Charge Expense Categories. Note that if you create more than one rule, the rules cannot have the same Charge Expense Categories.
Select a Breakeven Point Type:
- Select a Breakeven Point Type:
  - Artificial: If "Artificial" is selected, you must create a bracket with a 0% value. The Up To (per year) amount is the breakeven point.
  - Natural: The natural breakeven point is determined by the percentage of provisional rent that has been paid. If "Natural" is selected, you must set the Breakeven Point Percentage.
- If the Breakeven Point Type is "Artificial", create a Bracket to determine the percent of sales that are calculated as due rent. Brackets are defined with a Percentage, and if desired, an Up To (per year) amount for the sales. For example, if the Up To amount is 5000 and the percentage is 5%, you will pay 5% of sales until the sales surpass 5000. Note that the Up To amount cannot be 0. If there is no Up To amount, disable the field.
If Formula Percentage Rent is enabled:
- Select a Calculation Mode:
  - Breakeven Point: Enter the information as defined in Step 13.
  - Custom Formula: Enter a Formula.
    Tip: To ensure that the entered formula is correct, click Validate.
    - Click to use the Nakisa AI Agent to create a custom formula, and to check the list of supported variables and operations. From the Nakisa AI Agent, simply ask it to create a formula based on your requirements. The AI Agent suggests a formula. You can click Copy to copy the formula, or click Apply to have the Agent apply the formula directly to your percentage rent rule.
Enter any additional notes.
Click Save.
Once the rule is saved, click Close. The percentage rent condition appears in the table in the Conditions section.

See also: