Cheddar’s Scratch Kitchen Tenant Overview
Pros
- Passive leases
- Increases during the primary lease term
- Growing concept
Cons
- Not a major chain yet
- Mix of Franchisee and Corporate locations
Tenant Description
Cheddar’s was acquired by Darden Restaurants in fiscal year 2017. The chain puts Darden’s total restaurant count up to 1,695. A property leased by Cheddar’s is an attractive asset because of the hands off nature of the lease. Cheddar’s often signs triple net leases, requiring no landlord responsibilities from the investor. Many of the Cheddar’s that have traded recently have been sale leasebacks and have included various forms of rental increases allowing investors to see their returns grow with time. The spaces occupied by Cheddar’s restaurants have a fairly common and easily adaptable layout. If Cheddar’s decides to vacate, the property could easily be re-tenanted by another casual dining tenant with minimal, if any, renovations.
Cheddar’s Scratch Kitchen is a chain focusing on made-from-scratch meals. Favorites include Smoked Baby Back Ribs, hand-battered Country Fried Chicken, Scratch Burgers, and Homemade Onion Rings. Founded by Aubrey Good and Doug Rogers in Texas in 1979 now has 140 locations across Southern, Midwestern, and Mid-Atlantic regions.
| Average Sale Price | $4,569,092 |
| NOI | $275,516 |
| $/Square Foot | $525 - $575 |
| Building SF | 8,000 - 8,500 SF |
| Lot Size | 1.00 - 2.50 acres |
| Lease Term | 15 - 20 Years |
| Escalations | Varies |
| Stock Symbol | DRI |
| Cincinnati, OH | 5.50% |
| Asheville, NC | 6.50% |
| Fort Wayne, IN | 5.85% |
