Legal Term
microbrewery taproom contract percentage rent vs fixed minimum
Legal Definition
In commercial leases for microbrewery taprooms, this provision specifies that rent is determined by either a percentage of the tenant's gross sales (percentage rent) or a predetermined fixed monthly amount (fixed minimum rent), typically requiring the tenant to pay the greater of the two amounts each period.
In Plain English
This means the rent for a brewery's taproom can change based on how much beer is sold (percentage) or stay the same every month (fixed), and you usually pay whichever amount is higher.
Example in a Contract
Section 4. Rent. Tenant shall pay Landlord as base rent for the Premises the greater of: (a) Fixed Minimum Rent in the amount of $2,500 per month, or (b) Percentage Rent equal to 5% of Gross Sales derived from taproom operations during each calendar month of the Lease Term. Gross Sales shall include all revenue from on-premises consumption and retail packaged goods.
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