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38% of Chipotle's on the market have been re-priced this year. Deals are now sitting at an average asking cap rate of 4.89%. And we think they need to move another 61 bps be at a 5.50%. Why? - There is approximately 20 months of inventory backlog on the market. - The average days on market for a Chipotle stands at 182 - the highest recorded. That's 6+ months! - there are 69 deals on the market - which nearly clipped the all-time high of 72 on Jan 1st. Something has to give here.

🚀 Chipotle’s Q3 Results: A Case Study in U.S. Market Dominance and Strategic Expansion Kudos to Danny Klein for sharing Chipotle’s impressive Q3 highlights. A 13% revenue boost, strong same-store sales, and ambitious growth projections underscore the brand’s effective U.S.-focused strategy. It’s clear Chipotle is maximizing its domestic footprint, especially with the popular Chipotlane model, which has been a game-changer in digital integration and convenience. While their U.S. presence grows rapidly, Chipotle’s limited international expansion is a unique strategy. Unlike other global fast-casual brands, Chipotle is refining its model domestically, focusing on operational efficiency and digital sales optimization, rather than rushing into new markets. 💡 Points for Thought: U.S.-Focused Growth: By prioritizing local expansion, Chipotle mitigates risks tied to global market adaptation, maintaining a consistent brand experience. Chipotlane’s Impact: With digital sales now at 34% of revenue, the Chipotlane model aligns well with U.S. consumer expectations fast, convenient, and digitally integrated. Global Potential? This raises an interesting question: Could Chipotle replicate this success globally, or is the brand optimized primarily for the U.S. market? For those in the F&B and QSR industries, there’s a valuable takeaway here growth doesn’t always mean going global. Sometimes, the key is deepening roots in your existing market. What’s your perspective? Can Chipotle’s success translate internationally, or is its U.S.-centric approach what fuels its growth? #RestaurantGrowth #QSRInsights #Chipotle #BusinessStrategy #DigitalTransformation #FandBIndustry #QuickService #RestaurantInnovation

Chipotle Q3 results, just announced this afternoon: Total revenue increased 13 percent to $2.8 billion. Same-store sales hiked 6 percent, year-over-year (another strong result). That comp comprised of higher transactions (traffic) of 3.3 percent and a 2.7 percent bump in average check. Digital sales represented 34 percent of total F&B revenue. Operating margin was 16.9 percent, an increase from 16 percent over last Q3. Restaurant-level operating margin was 25.5 percent, a decrease from 26.3 percent. Opened 86 new company-operated restaurants, with 73 including the order-ahead "Chipotlane," and one international licensed restaurant. For 2024, Chipotle expects to open 285 to 315 corporate stores, with over 80 percent having a Chipotlane. For next year, though, Chipotle said Tuesday it now projects 315 to 345 openings (80 percent Chipotlanes), which is a massive figure for the brand. More to come tomorrow.

Wendy's is getting a makeover of sorts by taking an addition by subtraction approach. The fast food chain is closing an additional 140 outdated stores in addition to the 100 it announced earlier in the year and plans to open more high-tech locations that streamline ordering and improve the customer experience. Wendy's has been in the midst of a giant redesign of its restaurants that began two years ago featuring new tech and drive-thru improvements. The fast food category has face a year of upheaval as customers bolted because of inflation and rising prices at chains. That's forced McDonald's, Burger King and Wendy's to into a value meal price war, scaling back prices and offering more deals. It's been a less than financially healthy year for Wendy's. While the chain ranks second behind top burger McDonald's and ahead of 'what's the crown for' Burger King, sales growth in 2024 has been like a bag of soggy fries with growth at just 2.3% globally compared to the 7.2% growth it saw in 2023. Same-restaurant sales growth is like a broken soft serve machine, which is just 0.7% globally compared to 5.2% in 2023. Krabby Patty to the rescue! Streamlining the ordering process and drive-thru experience are good places to start in terms of luring customers back. More signficantly, however, is refocusing the menu to offer more incentives and discounts. Wendy's recently launched its limited-time Krabby Patty Meal and Pineapple Under the Sea Frosty in addition to its current $1 promotion beverage deal. All in all, Wendy's makeover seems to be going according to plan https://lnkd.in/gpimTDCR #wendys #fastfood #restaurant #customers #technology #drivethru #realestate

As much as I love Chipotle as an operator, market trends are shifting for them from an investment sales standpoint: ✅ Cap rates are rising - 3 deals traded north of a 5.50% ✅ Inventory hits an all-time high - in the 22 months we've tracked this tenant. ✅ Deals are taking longer to close - we're seeing approx 15 months of buildup on the market. Cap Rates in the 4's could be a thing of the past. DM me if you'd like our most recent sales comp report.

A Bigger Slice: Domino’s Is Winning The Store Count Wars. On Thursday, Domino's Pizza reported third quarter #earnings, with U.S. same-store #sales rising 3.0%, slightly worse than expected, contributing to the company revising its forecast for sales growth this year. The company now expects global #retail sales to grow 6% this year, down from 7%. The news comes just two days after the company renewed its “Emergency Pizza” promotion to drive sales, where customers can get a free medium, two-topping pizza... if they place a qualifying order. The company also revealed that it now has 21,002 stores across the world, as it continues to build on its ambitious global #growth plans or, as Domino’s calls it, the “Hungry for MORE” strategy. A substantial slice of those — some 33% — are in the U.S., with the rest spread across its 90 #international markets. The new additions widen the gap to its nearest rival, Pizza Hut, which had fewer than 20,000 locations at the latest count. Most of the store growth for Domino’s came from overseas: in Q3, the company’s international division opened 184 new stores and closed 136, for net growth of 48 stores. That feels pretty typical for most large chains. Some restaurants naturally close every quarter for a host of reasons (underperformance, franchisee change, etc.). What’s slightly odd is that — out of more than 6,900 restaurants in the U.S. — Domino’s didn’t shut down a single store; it opened 24 with no #closures. In the previous two quarters combined it closed only three stores, and in the previous year it closed only 10. Either the company is firing on literally all cylinders, or underperforming stores just don’t close down. The takeaway? If a Domino’s opens up near you, chances are, it’s sticking around for a long time. JSesko@meridianfinance.com 818-914-9271 #tradecreditinsurance

🚨 Denny’s Closing 150 Restaurants: Here’s What It Means for the Industry! 🚨 Imagine walking past your favorite Denny’s, only to find its doors closed for good. 😟 This might be the reality soon, as Denny’s plans to shut down 150 locations, including 50 by the end of 2024. Why? It’s all about focusing on cash flow and getting rid of unprofitable locations. 💔 The Problem: Denny’s has some restaurants that are too old to remodel or just not profitable enough. When a restaurant brand is over 70 years old, it’s bound to have some outdated spots that don’t serve well anymore. 💡 The Solution: Denny’s is betting on this cleanup to strengthen its bottom line, making the remaining locations more profitable. Sometimes, closing doors today can mean better growth tomorrow! 🏢 Takeaway for Restaurant Owners: Keep an eye on the financial performance of your locations. Don’t be afraid to make tough decisions for long-term success. Focus on updating and optimizing operations where it counts most. Let’s see how Denny’s transformation plays out. Do you think this is the right move? 🔍 Stay ahead in the restaurant industry by learning from these big shifts! 💬 Drop a comment with your thoughts! #RestaurantNews #DinerDownsizing #FoodIndustryTrends #CashFlowOptimization #DineSmart

Chipotle Sees Double-Digit Traffic Gains in Q2 Chipotle Mexican Grill added 247 locations over the past year and achieved a 16.9% increase in overall visits and a 9.5% rise in visits per location, according to Placer.ai. Over the past five years, Chipotle's customer base has grown significantly, with repeat visits rising thanks in part to its Chipotle Rewards loyalty program, which now has 40 million members. Notably, National Burrito Day saw a 19.7% increase in store traffic. Vincent Knipp 📞 (972) 755-5205 ✉️ Vincent.Knipp@marcusmillichap.com https://lnkd.in/gyaY6ttz #NNN #retail #realestate #investment #investing #commercialrealestate #property #passiveincome #cre #investor #realestateinvesting #commercialproperty #netlease #retailrealestate #chipotle

Another blazing, industry-defying quarter from Chipotle: Q2 results, just announced: Total revenue up 18.2 percent, year-over-year, to $3 billion. Same-store sales growth of 11.1 percent. That owed to higher transactions of 8.7 percent (nearly unheard of these days) and a 2.4 percent increase in average check. Digital sales represented 35.3 percent of total F&B revenue. Chipotle in Q2 opened 52 new company-operated restaurants, of which 46 included a Chipotlane, and one international licensed restaurant. The company expects to debut 285 to 315 new store openings this year, with over 80 percent including the order-ahead pickup Chipotlane. Operating margin was 19.7 percent, a jump from 17.2 percent. Restaurant-level operating margin was 28.9 percent compared to 27.5 percent in the year-ago quarter.

“McDonald’s on Monday reported that sales at US stores open at least a year fell 0.7% last quarter from the same period a year earlier, dragged down by fewer customers going to the fast-food company’s restaurants. McDonald’s isn’t alone: Starbucks, Burger King, Wendy’s and other rivals are also reporting less foot traffic and lower overall sales as consumers pull back their spending on food away from home.” “The tough environment for McDonald’s wasn’t limited to the United States: Sales at stores open for at least a year fell 1% globally. It’s the first time sales fell by that measure since the last quarter of 2020.” https://lnkd.in/e-ayQJYA