Franchisee EBITDA Valuations

Higher Costs & Potential Tax Changes Pressure Valuations

  • Less optimistic franchisee valuation outlook reflects accelerating commodity & labor costs and potential negative impact of new tax laws.

Marcus & Millichap Cap Rates

Cap Rate Spread Shrinks to New Low

  • Cap rates for single tenant net leased restaurant properties increased slightly in October, but less than the increase in the 10-year Treasury rate, resulting in a 10 bps compression in the spread (smallest spread since January 2020).
  • QSR cap rates averaged 5.0% versus 6.2% for FSR during October.