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Real Estate Market Difficult for Franchisees Right Now

The right location is of prime importance for restaurant franchisees, but it seems that good locations are harder to come by and with less attractive rents and conditions than was the case a few years ago. Experienced people who deal with real estate on a regular basis speak about present conditions.

Dan Burrell, a franchisee, area developer and director at Jersey Mike’s Subs says, “If franchisees want to get in the game, expect slim margins because rent increases continue to require more risk,” according to journalist Sara Wykes at Multi-Unit Franchisee, a magazine.

Robert Thatcher, director of franchise and real estate development for Ben’s Soft Pretzels feels “The reality is we have fewer sites that are demographically feasible for new development. (Multi-Unit Franchisee)

“Real estate development is one of the hardest things for a franchise,” says Philip Schram, chief development officer and chair of Buffalo Wings & Rings [a franchisor]. Since buying the brand in 2005 with Nader Masadeh and Haytham David, he has helped rejuvenate and rebuild it to 70 locations today. However, changes in the real estate market, construction industry, lending policies, and regulations are slowing him from his goal of adding 75 new locations in the next 5 years. — Sara Wykes, Multi-Unit Franchisee

Full article, p. 58

 

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