McDonalds Real Estate Department

[Jean H.]

Hello - wanted to see if anyone has ever been in touch with McDonalds' real estate department for a potential site lease/acquisition. I submitted a site to them recently and one of their regional real estate managers got in touch with me. Any insight you might be able to provide in terms of how they operate, how long it takes for them to approve a site, the way they negotiation lease terms etc?  Thanks. 

[Joel Owens]

Might be 6 months or so. Care is taken when selecting a site. They should have  a few site plans for models they use. Most Mcdonald's are franchisee and not corporate as the franchisor  makes money off of the royalty fees from franchisee.

They have a franchisee department where they notify potential franchisees in the area of a possible site. The franchisee and corporate has to agree on a site.

Mcdonald's, Chick Fil-A, Starbucks tend to sell for the lowest cap rates compared to other restaurant models. Ground leases they might require site improvements. Those sell for lower pricing because the tenant is only paying rent on the land. Make sure ground lease is for a long period of time and no early termination clauses. One downside on selling ground leases is they are hard to get financed for a buyer plus there is no depreciation tax wise on the land.

NNN you might could sell at a higher price for land and building.