What kind of lease requires a store to pay a fixed rent plus a portion of its gross sales?

A percentage lease is a type of lease agreement commonly used in retail settings where the tenant pays a fixed base rent in addition to a percentage of their gross sales. This type of arrangement benefits both the landlord and the tenant: the landlord gains the potential for increased income as the tenant's sales grow, and the tenant benefits from having a lower fixed cost when sales are slow. Often, this arrangement aligns the interests of both parties, incentivizing the landlord to support the tenant in achieving better sales performance. This is particularly useful in retail environments where sales can significantly fluctuate based on various factors such as seasonality or market trends.

In contrast, other types of leases do not incorporate sales as a factor in determining rent payments. For example, a net lease typically requires the tenant to cover additional expenses like property taxes, insurance, and maintenance costs, while a full-service lease generally includes all operating expenses in the rental rate. An operating lease is more focused on the use of an asset and tends to be used in scenarios involving equipment leasing. Therefore, the distinguishing feature of a percentage lease lies in its revenue-sharing aspect based on the tenant's sales performance.