Sale-leaseback · QSR & restaurant franchisees
Restaurant Sale-Leaseback: fund the next three units from the stores you already own.
For multi-unit franchisees with a development schedule, a brand-mandated remodel, or a refi maturing into today's rates. The dirt under a performing store is worth more to a net-lease investor than to your lender's appraiser.
Written by Dwaine Clarke , Founder & Principal Broker, American Net Lease, LLC Reviewed
On this page: What you're solving · What it trades for · The lease · Objections · Example · FAQ
What you're really solving
Three problems the building can pay for
The brand's schedule does not wait for a credit-union committee. Equity sitting in fee-simple stores is often the only capital account large enough to fund the next three openings without stacking another personal guarantee.
A remodel is an occupancy-cost event and a brand-compliance event. It is rarely a loan product. Freeing the real estate is how operators fund the image cycle without starving the development line.
The store is a cash-flowing business. The dirt under it is a low-yielding asset until you sell it to someone who buys leases. That spread is the reason a sale-leaseback exists.
Lease engineering
The lease investors expect for a restaurant — and what each term costs you
| Term | What the buyer wants | What it means for you |
|---|---|---|
| Primary term | Long — supports a tighter cap and higher proceeds | Occupancy cost locked longer; renewals are your protection |
| Structure | Absolute NNN | Nothing changes operationally; you keep roof, structure, and the store |
| Escalations | Annual or periodic bumps | Cap them; model rent against a normal sales dip, not last year's peak week |
| Rent coverage | Store EBITDA comfortably above rent | The honest test of how much rent the unit can carry — we model it before pricing |
The objection
"A landlord will squeeze me at renewal."
You write the lease before the sale. Term, rent, coverage, escalations, and renewal options are the product the buyer is purchasing — not a form they hand you after closing. A landlord cannot rewrite a lease you authored and they bought.
What does kill a deal: rent the store cannot earn after a soft quarter, and a term so short the buyer is pricing a vacancy. We model both before anything is marketed.
Worked example
A twelve-unit franchisee, seven owned, a development agreement
Illustrative — not a closed transactionQuestions
Restaurant sale-leaseback FAQ
Does the franchisor have to approve a sale-leaseback?
Usually yes — notice, consent, assignment, and any remodel or transfer rules sit in the franchise agreement, not in the deed. Those terms belong in the package before marketing. American Net Lease will not invent a franchisor's consent clock.
Should the stores sit on a master lease or individual leases?
A master lease can simplify a portfolio sale. Individual leases preserve flexibility if you later sell or close a single unit. The trade-off is the core of lease engineering, not a one-page formula. The analysis says which structure still leaves each unit able to pay rent.
Does a franchisee guarantee price differently than a corporate cap?
Yes. The investor is underwriting the franchisee's ability to pay rent, not the parent on the fascia. Franchisee QSR already asks a wider cap than corporate QSR in the published asking-cap tables. Your coverage, unit count, and guarantee language will move you inside or outside that range — we will not paste a brand print onto your stores.
Can I keep the real estate under one store?
Yes. Selling every roof is a choice, not a requirement. Operators often hold one or two boxes as operating collateral or as the store they still want to own in fifteen years. The analysis ranks locations; it does not assume a clean sweep.
How long from analysis to close?
The first deliverable is a confidential Portfolio Capital Analysis, offered within 48 hours of a complete submission. Marketing and closing follow only after the lease is engineered. Diligence, title, franchisor consent, and the buyer's clock set the rest.
Get a confidential read on your stores in 48 hours.
Store count, current debt, and last year's unit-level earnings are enough to start.