Quick-Service Restaurants — NNN Properties for Sale

Sector economics

The category runs on volume and real estate quality rather than margin. A typical franchised QSR does $1.2M–$2.5M in annual unit sales (Chick-fil-A is the outlier at $6M+ per freestanding store), and rent generally lands between 6% and 10% of sales. That ratio is the health metric that matters: a store paying 7% of sales in rent can absorb a bad year; one paying 13% is a lease-expiration risk no matter how strong the brand looks on the sign.

Two structures dominate. Ground leases — common for McDonald's and Chick-fil-A — put the building in the tenant's hands; you own dirt and collect rent with zero landlord obligations, which is why they command the lowest cap rates in all of net lease. Fee-simple NNN deals — typical for Taco Bell, Wendy's, Burger King, and the coffee brands — include the building, price 75–150 basis points higher, and shift roof-and-structure exposure onto lease language you need to read closely.

Lease norms

New-build QSR leases run 15–20 years with two to four 5-year options. Escalations cluster around 10% every five years, or 1.5–2% annually on the West Coast. Absolute-net language is standard on ground leases; fee-simple deals range from true absolute NNN to "NN" leases where the landlord keeps roof and structure — a difference worth roughly a quarter-point of cap rate and real money on a 40-year-old building.

The tenant roster

Brand credit is only half the underwriting. McDonald's (investment-grade, ~95% franchised, but real-estate-controlled by corporate) and Chick-fil-A (private, famously selective, ~$6M unit volumes) anchor the premium tier. Taco Bell and KFC deals are mostly franchisee paper backed by Yum! Brands' system strength. Chipotle signs corporate on 15-year terms for its new drive-thru "Chipotlane" builds. Starbucks, Dutch Bros, and Dunkin' bring coffee's morning-daypart traffic and corporate or large-franchisee guarantees. Burger King, Wendy's, Popeyes, Arby's, and Pizza Hut trade wider and reward buyers who underwrite the specific operator.

Risk notes

Watch three things. First, franchisee concentration: a guarantee from an operator with 12 units and thin margins is closer to local-business credit than to the brand on the marquee. Second, rent-to-sales creep: sale-leasebacks priced off peak-year store sales can embed above-market rent that no replacement tenant will pay. Third, functional obsolescence: pre-2015 prototypes without double drive-thru lanes face expensive remodels, and some franchise agreements push that cost into the lease. Every deal we send flags unit sales, rent ratio, and remodel status where disclosed — and marks what the seller wouldn't share.