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As many franchise systems put their foot back on the gas for expansion, the real estate “bargains” many had hoped to find are not materializing. Rents on retail and restaurant space have not only held up in high-demand locations, but landlords have raised rates and available space can be difficult to find.
Unleashed Brands is one franchisor seeing rents rise as it steps up expansion across its six youth enrichment brands that offer play and learning experiences. The company opened more than 230 new locations in 2022 and expects to open another 250 next year.
Over the last 24 months, rents have been trending 6 to 8 percent—and in some cases up to 10 percent—higher than where rates were prior to 2020, according to Josh Wall, chief growth officer at Unleashed Brands in Bedford, Texas. “It’s also a more competitive real estate environment, probably one of the more competitive I’ve seen in the last 10 years,” he said. “In order to compete for Class A and even Class B retail, we really have to know what we want and be ready to go for it.”
Learn more about the franchising real estate outlook for 2023 and how Unleashed Brands plans to navigate it here.