Chick-fil-A TENANT OVERVIEW


Pros
- Corporate guarantee
- Ground leases
- Increases in primary term
- High barriers of entry for new locations
Cons
- Private company
- Low cap rates
Tenant Description
Chick-fil-A, Inc. is the largest quick-service chicken restaurant chain in the United States, based on domestic annual sales. Supported by a strong brand and award-winning restaurant design and architecture, the family-owned, privately-held company is strategically expanding and uniquely positioned for continued future growth.
Chick-fil-A is notorious for having strong franchised restaurant operators, proven by the fact that Chick-fil-A maintains a franchisee turnover rate of less than 5% per year. The company only accepts about 0.4% of the applicants who apply every year. For net lease investors, it is reassuring to know that Chick-fil-A NNN leases have a corporate guarantee by Chick-fil-A, Inc.
When purchasing a Chick-fil-A ground-leased property, investors are buying the real estate upon which the Chick-fil-A restaurant sits. These ground-leased properties provide additional investment security given the nature of the real estate investment made by Chick-fil-A's real estate team, which generally pays for the design, construction, and equipment for all new stores. Finally, from a real estate fundamentals perspective, knowing that store locations and developments are chosen based on corporate goals for target markets; it is not surprising that new stores are typically located in high-traffic areas and are often found as outparcel/pad sites at major shopping centers.
Ever since Truett Cathy invented the chicken sandwich in 1964, the name Chick-Fil-A has become as synonymous with Atlanta as Coca-Cola. The chicken sandwich recipe has remained relatively unchanged: a hand-breaded chicken breast stuffed in a soft buttered bun and garnished with a couple of pickle chips. Cathy sold it for less than a buck at his Dwarf House in Hapeville, a place so small it had only 10 stools and four tables. The first Chick-fil-A restaurant arrived in 1967, and today the fast-chicken giant boasts more than 2,300 locations in 47 states and Washington, DC.
Average Sale Price | $3,051,000 |
NOI | $131,500 |
$/Square Foot | $678 |
Building SF | 4,500 |
Lot Size | 1.0 - 2.0 Acres |
Lease Term | 20 Years |
Escalations | 10% Every 5 Years & Options |
Stock Symbol | N/A |

Colorado, CO | 4.00% |
Albany, GA | 4.50% |
Rohnert Park, CA | 5.40% |