Burger King Franchisee Set to Sell Units in Chapter 11 Case

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Notable Comp: Peter Deltondo of Marcus & Millichap, just closed this Dutch Bros property in San Antonio, TX at a 5.18% CAP with a 1031 Exchange Buyer.

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Here’s what we’ve got for you today:

• Burger King franchisee Meridian Restaurants Chapter 11 case expected to approve sales of its units

• Franchisors get creative with real estate to develop more stores

• Sprouts Farmers Market opens 400th store as part of expansion plan

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WHOPPER FLOPPERS

Burger King Units to be Sold in Chapter 11 Case of Franchisee Meridian Restaurants

A federal bankruptcy court is set to approve the sale of Burger King units involved in the Chapter 11 case of Meridian Restaurants Unlimited, a Utah-based franchisee with 116 restaurants in nine states. Meridian filed for bankruptcy protection in March, and Burger King is slated to be the largest buyer of its remaining 93 restaurants.

Auction and buyers: A bankruptcy auction was held earlier this month, and Burger King is expected to purchase the largest number of Meridian's remaining restaurants. Other buyers include Kansas King, Dakota Restaurant Partners, Kraf, and Snake River Foods.

💰 THE MONEY SHOT

Managing transitions: Burger King had previously announced a plan to invest in its U.S. system, acknowledging that some franchisees may leave the system or reposition their portfolios. The company aims to ensure that the restaurants ultimately end up in the hands of high-performing franchisees and other proven operators in the restaurant industry.

MAKE IT TWERK

Brands Get Creative to Overcome Real Estate Challenges in Expansion Efforts

Making it work: As franchise systems restart their development pipelines, they are facing challenges in securing Class A retail sites for expansion. The U.S. retail vacancy rate is at a new low, making competition for prime locations fierce, and factors like higher rents and construction costs are further complicating the process.

Leeway in site selection: Batteries Plus doesn't necessarily require top-tier locations, allowing more flexibility in finding suitable sites. They consider power centers and areas with auto services adjacencies, and their store sizes range from 900 to 2,500 square feet, depending on the market and rent costs.

💰 THE MONEY SHOT

Adapt or Die: Franchise brands are navigating the tight real estate market by adopting flexible footprints, exploring non-traditional growth opportunities, and leveraging commercial business. They are also implementing long-term strategies and building partnerships to secure prime locations and overcome real estate challenges in their expansion efforts.

YG 400

Sprouts Farmers Market Unveiled its 400th Store as Part of its Five-year Expansion Plan to Grow 10% Annually

Rapid expansion: The opening of the Haddon Township store marks the 23rd store opening by Sprouts this year. Each new location follows an innovative design concept, offering a 23,000-square-foot footprint and a vibrant farmers market experience.

National presence: Sprouts currently operates in 23 states across the U.S., including Alabama, Arizona, California, Colorado, Delaware, Florida, Georgia, Kansas, Louisiana, Maryland, Missouri, Nevada, New Jersey, New Mexico, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, and Washington.

💰 THE MONEY SHOT

Continued growth: Sprouts Farmers Market remains committed to expanding its footprint, exceeding its store count and reaching more communities across the country.

TRIPLE NET TENDIES

🧠 Thought Leader: @TripleNetInvest goes off on Twitter about why NNN deals should be priced 100bps higher than they are right now

👂 Ear Hustle: Crexi interviews the net lease beast Glen Kunofsky of NNN Pro Group

💎 Web Gem: Hoya Capital unveils the Net Lease REIT Index

Net Lease Nuggies

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• The Revamp of Shipley Do-Nuts: Shipley Do-Nuts, an 85-year-old company, is undergoing a modernization and revamp of its operations.

• Walk it Out Ayy: 12 Kansas City CVS stores close from protests

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