Since it was established in 1990, Zaxby’s has seen a great deal of success to become one of the most popular restaurants in the US. Today, the company is still growing with a number of franchise locations offered to interested investors.
Now, if you also want to make more money in real estate, you may want to look into available Zaxby’s real estate for sale. These properties are sold under triple net lease (NNN) arrangements that offer unique benefits that you will not find in other commercial property investments.
Zaxby’s: Tenant Description
Zaxby’s started as a restaurant wanting to offer the best Buffalo wings and chicken fingers that guests can enjoy in a warm atmosphere. Today, the company has grown into one of the biggest “fast-casual” restaurant chains in the US, with over 700 locations across the country.
Some of their locations are corporately owned, but most of them are owned by franchisees. The company is also in the process of opening up new restaurants to expand to new territories.
The company has continued to receive praises for the quality of the food and services they offer that, in 2015, it was ranked by Nation’s Restaurant News as number 9 in the top 100 fastest-growing restaurant chains in the US in terms of sales and unit data, among other metrics.
Now, if you are looking for an investment vehicle that will give you good returns with minimal effort, you should consider Zaxby’s real estate.
Zaxby’s Franchise Requirements
To become one of Zaxby’s franchise owners, you need to adhere to certain requirements.
As a standard for franchise investments, the company would assess your net worth, which should be at least $1,000,000, excluding $200,000 in your annual income and the value of your primary residence. As for the estimated initial investment, it can run from around $350,000 to more than $700,000 to cover costs such as the franchise fee, lease deposit, initial inventory, marketing contribution, fixtures, equipment, insurance, permits, and licenses among other things the business needs. But if you are looking for an NNN Zaxby’s restaurant with an existing tenant, the price can range from around $1,800,000 to around $4,300,000.
Aside from the costs, you and your managers would have to undergo some training to ensure you know how to run the business according to the company’s benchmarks and ensure absolute customer satisfaction.
As for the granted territory, you will not receive an exclusive one, though you will have protected rights within your area, where the franchisor is not allowed to operate or authorize other franchisees to do so.
Of course, you will have some obligations to devote your best effort to manage, promote, and operate your franchise in the most effective and efficient manner.
The length of the initial franchise term is typically 10 years, but you can always find a Zaxby’s franchise for sale with a longer term that can last up to 20 years, with the option to renew for an additional successive 10-year term.
Choosing the Best Zaxby’s Property to Invest In
While investing in Zaxby’s real estate department is a great decision to make, not all of their properties offer the same income potential. During your search, keep in mind the most important factors in buying NNN properties.
Location
As with any other commercial real estate, the location of the Zaxby’s NNN property that you buy will have a strong influence on its profitability. Ideally, it should have good road access and be highly visible to those who are walking or driving by. Better yet, it should be close to anchor establishments. Shopping malls, groceries, and other retail outlets will help bring in more customers to your restaurant.
Of course, it should have its own parking space, as one with none will discourage potential customers to stop by.
Cap Rate
In the world of NNN investing, a high cap rate always favors the buyer. In a sense, it means that you are spending less on the purchase.
Also, the cap rate shows how profitable the business is. So, a high one means that you can expect a steady stream of handsome income and a quicker return on investment (ROI).
To calculate the cap rate of a Zaxby’s real estate for sale that you are interested in, you can use this formula: cap rate = net operating income/purchase price.
Lease Term
Ideally, the property that you should buy must have a long lease term. This gives you the peace of mind that you can receive rental income for a long time. Not only that, but it eliminates the hassle of finding new tenants again and again.
How an NNN Advisor Can Help
Navigating the world of NNN investing can be quite daunting, especially when you are new to this type of endeavor. Now, to ensure you are purchasing the best property that aligns with your investment strategy and goals, you should seek the help of an NNN advisor.
As these professionals have in-depth knowledge of the market, it will be much quicker to find the best properties available today, saving you time that you can spend on other important things in your life. You get access to potential properties and understand the lease details before proceeding with a deal.
Generally speaking, they help you in a number of aspects, such as:
- Portfolio analysis
- Property evaluations
- Investment strategy
When hiring an advisor, though, you should make sure they are knowledgeable with the tenant; in this case, Zaxby’s. So, during your interview, ask if they have any experience in helping clients buy a franchise from the company. Better yet, they should have a proven track record of successfully closing franchise deals with Zaxby’s.
Most importantly, a good advisor is client-focused, listens and considers your goals, and treats you with the utmost respect throughout the buying process.
Conclusion
Without a doubt, Zaxby’s real estate is one of the best franchise options to earn long-term passive income with minimal responsibilities. However, it is still important to remember that not all of the properties offer the same income potential. So, do your research and seek the help of professionals to find the best property that suits your lifestyle and investment goals.
For more tips and information that you can use in business, check out the rest of our articles!