If you are looking for a lucrative real estate investment opportunity that provides you with a healthy stream of passive income without having to deal with the taxing landlord responsibilities, then purchasing a triple net lease (NNN) Popeyes business for sale is the way to go.
Not only that it will relieve you from the expenses and headaches that come with being a property owner, but it will also give you the chance to grow your investment portfolio in one of the most recession-resistant industries—food service.
Plus, you will have a strong tenant with a good history of credit and performance to keep your property leased and generate income for you month after month, year after year.
However, like any other type of investment, you should still do your due diligence to ensure you are buying a property that perfectly fits your investment goals. Let this article serve as your guide.
About Popeyes Louisiana Kitchen
The company is a quick-service restaurant chain originally from New Orleans, Louisiana. It was founded in 1972 and currently has more than 40 years of experience in the industry.
Popeyes specializes in serving New Orleans-style cuisine, including its signature fried chicken, biscuits, and rice dishes.
In 2017, Popeyes was acquired by Restaurant Brands International (RBI) for $79 per share or a total of $1.8 billion. This made Popeyes a wholly-owned subsidiary of RBI, the same company that owns Burger King and Tim Hortons.
With Popeyes now under its wing, RBI has become one of the largest quick-service restaurant companies in the world with a massive portfolio of properties in the US and other countries.
Today, there are more than 3,000 Popeyes restaurants worldwide. In the US alone, there are more than 1,700 Popeyes restaurants, with the majority of them located in the South.
Purchasing a Popeyes Restaurant: Basic Requirements
To be eligible to purchase a Popeyes business for sale, you should have liquid capital of at least $250,000 and a minimum net worth of $500,000. This shows that you have the financial capacity to support a Popeyes franchise. However, the total investment you need to make will still depend on the location and the size of the property you are interested in purchasing.
On average, you can expect to shell out anywhere from $1,300,000 to $4,000,000 for an existing Popeyes property for sale.
Aside from the financial requirements, you will also need to have experience in the restaurant industry. Specifically, Popeyes would require all of its store owners to have a minimum of three years of experience managing or owning a restaurant.
In some cases, the company would require you to undergo some training, especially if you do not have the experience.
- Classroom Training – This is a three-week program that will be held at Popeyes Louisiana Kitchen University in Atlanta, Georgia.
- In-store Training – If you already have an existing restaurant, the company would send a team of trainers to help you learn how to run the business up to their standards.
When you meet all these requirements, you can start searching for Popeyes business for sale listings.
Essential Factors to Consider When Picking a Popeyes Restaurant to Buy
Now that you know the basics of purchasing Popeyes Chicken real estate, it is time to look into the factors you need to consider to ensure you are making a wise investment. Here are some of the most important things to keep in mind.
Location, Location, Location
This cannot be stressed enough. Ideally, the Popeyes restaurant you buy should be situated in a high-traffic location with a dense population. This could be near residential areas, office buildings, malls, or any other commercial establishments where people frequently go to.
Also, it should have a visible street frontage and easy access to public transportation. This will make it more convenient for customers, resulting in higher sales.
Condition of the Property
Take a close look at the Popeyes for sale you are interested in and check if it is well-maintained by the current tenant. Are there any necessary repairs that need to be made? Is it up to Popeyes’ standards?
You should also consider the age of the property. An older restaurant will likely require more repairs and maintenance than a newer one. Nonetheless, the tenant will be the one to handle such costs.
Size of the Property
A larger property can accommodate more customers, which means higher sales. However, a smaller one may be easier to manage and have lower overhead costs. Your choice really depends on what you are looking for in an investment.
The cap rate is a measure of a commercial property’s profitability. To calculate it, divide the Popeyes restaurant’s net operating income (NOI) by its purchase price.
For example, if an existing Popeyes restaurant has an NOI of $200,000 and is being sold for $400,000, then its cap rate would be 0.50 or 50%.
In general, you should look for a Popeyes restaurant with a cap rate of at least five percent. This shows that it is generating good profits and is a wise investment to make.
Existing Lease Term
When you purchase Popeyes NNN properties, you will also be taking over the existing lease agreement. This is why it is important to check the remaining lease term.
Ideally, you should look for a restaurant with a long remaining lease term of at least five to seven years. This gives you stability and allows you to plan your investments better.
The Best Way to Buy Popeyes NNN Properties
The best way to go about searching and buying existing Popeyes properties today is with a real estate broker that specializes in NNN properties.
For example, you can check out a Popeyes business for sale at NNN Deal Finder, which has been helping investors find the best Popeyes restaurants for sale in the US. When you work with them, they will walk you through the entire process—from start to finish—to ensure that you are making a sound investment.
They will also provide guidance on how to negotiate the best possible price for potential properties and help with due diligence to avoid any costly mistakes.
A Popeyes business for sale is a great investment opportunity to take, but it is important that you do your due diligence and consult with experts to ensure that you are making a wise decision. By following the tips in this guide, you will be well on your way to owning the right property that will truly help you meet your goals.
For more useful pieces of information on real estate investing and business, feel free to read the other articles on our site!
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