Zaxby’s TENANT OVERVIEW


Pros

  • NNN lease eliminates landlord responsibilities
  • Located in high traffic suburban locations

Cons

  • Private company
  • Must look closely at performance of franchisor across all locations

Tenant Description

Zaxby's is a fast-casual chicken chain. Zaxby’s has grown exponentially in southern states over the last 25 years. Most of the stores are franchised, and typically operate under a 20-year, NNN lease with various rental bumps. Some leases include between three (3) and five (5), 5-year options. An average Zaxby's freestanding location ranges from 3,000 - 3,500 square feet and is situated on 0.80 - 1.50 acre land with a drive-through. The locations are usually on an outparcel in a dense retail corridor.

Zaxby's founders Zach McLeroy & Tony Townley decided to provide the freshest chicken fingers and Buffalo wings in town. In 1990, they opened the first Zaxby's in Statesboro, GA. The concept, one of the early "quick casual" restaurants, has proven to be very successful. The company is headquartered in Athens, Georgia.

There are about 726 Zaxby's locations across 16 states: Alabama, Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Utah and Virginia. About 598 locations are franchised, while the rests are company-owned.

Its kitschy, memorabilia-themed restaurants offer creatively named chicken dishes, such as Chicken Fingerz, Zalads, Big Zax Snak Meal, Zappetizers, and Buffalo Fingerz with Zax sauce. The chain also serves chicken with other types of sauces named for their spiciness threshold, from Wimpy to Nuclear to Insane.

In 2016, Zaxby's was the No. 10 fastest-growing chain in the Nation's Restaurant News Top 100 list.

Average Cap Rate
6.64%
12 mo avg with 10+ yr lease term
Average Property & Lease
Average Sale Price $2,414,733
NOI $160,254
$/Square Foot $600 - $700
Building SF 3,200
Lot Size 0.8 - 1.0 Acres
Lease Term 15 Years
Escalations Varies
Stock Symbol N/A
Credit Rating
S&P N/A
Moody's N/A
Average Cap Rate Trend
7.10%
2015
6.99%
2016
Rates reflect last 12 mos, short and long-term
Recent Sales Comps
West Palm Beach, FL 6.66%
Hixson, TN 6.50%