Radius Clause Exposure Calculator

Radius clauses prevent tenant from cannibalizing their own store.

Typical store annual sales

Cannibalization %

Years remaining

Percentage rent rate %

Radius clause value

$432,000

Sales at risk

$1,200,000

Pct rent at risk

$72,000

How the math works

Sales at risk = annual × cannibalization. Pct rent at risk = sales × pct rate. Value = × years.

$6M × 20% = $1.2M sales. × 6% pct rent = $72k/yr × 6 = $432k protected by radius clause.

How to Use

Enter typical store annual sales.
Enter expected cannibalization % at proposed distance.
Enter lease years remaining.
Enter percentage rent rate %.
Read radius clause value.

Frequently Asked Questions

How it works?

Tenant agrees not to open competing store within X miles. Typical: 3-5 mile radius for retail; 10-15 for restaurants. Landlord protection: prevents tenant from siphoning own sales to new location, preserving percentage rent.

Typical violations?

Tenant opens new store at 2.5 miles despite 3-mile radius. Penalty: typically liquidated damages ($100-500k) or lease termination. Difficult to enforce — requires landlord monitoring and legal action.

Tenant negotiations?

Narrow radius (1-2 miles vs 3-5). Exclude franchise stores. Exclude catalog/online. Allow operational flexibility. Shopping center redevelopment sometimes exempted. Sophisticated tenants negotiate detailed carveouts.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.