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Texas Restaurant Law

The Changing Nature Of Restaurant Real Estate

Posted in Acquisitions, Commentary, Franchises, Franchising, News, Real Estate

For those familiar with the International Convention of Shopping Centers (a/k/a “ICSC”), you probably received your copy of Shopping Centers Today (“SCT”), which is the monthly magazine that they publish on national real estate. For those who don’t know, ICSC connects nearly all retail operators, landlords, and brokers who are involved in real estate, and they do so via national and regional conventions. I received my copy of Shopping Centers Today, and I was amazed for several reasons related to restaurants.

First, about half of the publication was devoted to restaurants. Next, Texas played an equally vital role on the national and international arena. Finally and most significantly, the usual players and usual strategies were not present. With that in mind, here are some key differences from just this one publication that show the changing nature of restaurant real estate.


Restaurants these days need more than just good food. It is becoming harder and harder for a restaurant concept to start, make money, and thrive without sophistication. To really succeed, restaurants need business plans, legal guidance, tax and accounting advice, and those are just starters. As one example, the Smashburger article in SCT shows that they raised $15 million of private equity funding prior to opening the first three restaurants. Clearly, Smashburger did not need all of that capital for three restaurants. However, they were thinking ahead and expanding as they opened. This shows the level of sophistication and forethought by one highly successful franchise.

International Focus

Another key example of the restaurant industry’s new focus is its international direction. Outside of the U.S., restaurants like McDonald’s are expanding like crazy. Inside the country, international food continues to be where growth lies.

Malls Revisited

We have all heard of and seen the contraction and consolidation of traditional malls. Still, those malls are being converted into open-air venues, and strip malls are again on the rise. Have you considered how your restaurant may benefit or be hurt by this direction?

The above examples are just a few of the changes in the quickly evolving restaurant industry. Let us know how you see things changing!

About the author: Matthew Sanderson is a restaurant lawyer in Texas. “Good service with a smile” is his motto. Click here to find out more about Matthew Sanderson’s legal practice and how he can help you today. Follow him on Twitter @dealattorney.