Triple net lease (NNN) properties have been some of the most attractive investment vehicles in real estate for a lot of reasons. For starters, they require minimal responsibilities for the landlord. Aside from that, they come with low risk, while generating long-term passive income for the owner.
Now, one of the most lucrative NNN investment options today is buying Panera Bread stores for sale. After all, you will be engaged in a business that sells items that consumers would need every day.
Let this article serve as your guide to buying these stores.
Panera Bread: A Quick Insight into the Business
Panera Bread is a chain store of bakery/cafe-style restaurants with more than 2,000 across the US and Canada. The brand is known for offering a wide variety of pastries and other baked goods, from brownies and muffins to pasta and pizza.
This company was the best performing restaurant stock in the US from 1997 to 2017, generating great returns for shareholders, and it is still doing that until now. They have been successful in providing an excellent in-store experience for customers, setting a welcoming atmosphere where they can relax and interact with other people as they take their orders.
So, if you want to start investing in real estate, you would never go wrong with buying NNN Panera Bread stores.
Important Things to Consider When Buying Panera Bread Stores
While buying Panera Bread stores for sale is a good decision to make, there are still things to keep in mind to get the most out of an NNN investment.
Establish Your Preferred Investment Returns
While they are operating under the same brand, Panera Bread stores provide different return potentials.
With that in mind, it is important to determine the capitalization rate of the property you are interested in. Typically, the higher the cap rate is, the better the investment returns you can expect.
The formula for calculating cap rate is:
Cap Rate = Net Operating Income (NOI) / Purchase Price
Find the Right Financing Solution
If you cannot fully finance your investment out of your pocket, then you should find a lender that can provide the support that you need.
When choosing a lender, see if they have someone who could travel with you as you try to find the best property to buy. This allows you to make quick decisions when you see a property that fits your criteria.
Consider Hiring an NNN Advisor
After finding a potential Panera Bread store to purchase, it is best to seek advice from an NNN advisor who can help you decide whether or not the property is best suited to your requirements. With deep knowledge about NNN investment, this professional should be able to help you find the most ideal properties, proceed with due diligence, and set up your business for success.
While you are buying a franchise, there would still be nuances in this type of investment that would cause you to miss opportunities, so it is vital to have an advisor by your side.
Know the Associated Obligations
Before you buy a Panera Bread NNN property, you should first get yourself familiar with the obligations that come with it. Of course, you will receive certain rights to operate under the brand, but there are also some limitations.
To know what you can and cannot do, do your research, give the company’s website a visit, and look for information about franchising. You can also ask other existing franchise owners who will be able to give you first-hand information about running such a business.
Review the Contract Carefully
Before you sign on the dotted line, you should take the time to review the contract and confirm any final information for the franchise agreement.
However, franchising contracts tend to be very long and can contain verbiage that you may not be familiar with, so you might want to also consult a lawyer to help with this process, apart from the advisor.
Requirements for Buying a Panera Franchise
Before you can buy Panera NNN properties, the company requires potential franchisees to meet a set of criteria. The main Panera franchise requirements stipulate that investors or buyers must:
- Have experience as an owner of a multi-unit restaurant or, at least, recognized as a restaurant operator.
- Have a net worth of $7,500,000.
- Have liquid assets that amount to $3,000,000 or more in total.
- Have the infrastructure and resources to meet Panera’s development schedules, which involve opening a minimum of 15 units within six years.
- Have a passion for fresh and quality bread, as well as a commitment to the development of the brand.
Aside from these, you, your manager, and bakers will be required to complete a training program facilitated by the franchisor, who will also handle all the associated expenses.
Of course, like other franchises, you will also be granted the right to own and operate in a specific territory. Except for limited exceptions, franchisees are not allowed to operate Panera Bread stores in the same geographic location within a one-mile radius from each other’s premises, unless they have different protected areas.
How Much Does It Cost
Generally speaking, a Panera franchise cost would depend on several factors. For example, it would depend on the store’s location and size.
However, to give you an idea, the cost can run from around $2,375,000 to around $5,630,000. And, these do not include the franchise fee of $35,000.
To know exactly how much you have to invest in these NNN properties, you should thoroughly discuss such details during your initial negotiations.
Without a doubt, buying Panera Bread stores for sale is a wise investment decision to make. With the brand’s carefully crafted reputation of providing healthy food options, while offering a comfortable and welcoming atmosphere to their customers as they come in, you can assure yourself of a lucrative business for years and years to come.
However, like any other form of investment, you should make sure you are taking the right steps. With the information provided in this article, you will be good on your way to starting a venture that will help you attain the financial freedom that you have been longing for.
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