Retail brands grapple with rising expansion costs

"The last few years have been both rich in opportunity for brick-and-mortar retail brands, and challenging when it comes to meeting expansion agreements," remarked Joshua Berger, Managing Partner at Century Partners Real Estate, Inc.

The firm recently polled several dozen major operators across the QSR, Auto Service, and Gas/C-Store segments. Operators reported feeling increased friction with regards to opening new stores across multiple elements, citing high construction and debt costs as key obstacles in store expansions.

"Brands have been forced to get creative to save on costs by seeking second-gen space, downsizing their physical store prototypes, and innovating with digital ordering and drive-thru-focused prototypes," said Matt Kramer, Founder and Managing Partner. "We've introduced three new programs to address these challenges, which are already driving strong results for our clients."

New programs to aid expansions by unlocking equity

Century Partners has introduced three innovative funding programs to help operators expand without large cost outlays or taking on high debt obligations.

One program, Direct Funding, helps operators open stores with little to no capital of their own by utilizing a takeout partner. The second, Equity Unlock, is a sale-leaseback program that utilizes the same equity or pre-sales to fund multiple store openings. The third program, M&A Offset, can offset the cost of an M&A store acquisition by selling the real estate, allowing operators to get into new stores at a massively reduced, or sometimes zero cost.

"In the last few years, we have funded dozens of stores by sourcing investors to buy the real estate, allowing the operators to quickly recycle their equity into the next site," said Berger. "This can happen as part of an M&A acquisition or as a new site build, although many of our clients are sourcing second-gen spaces to improve the margins," he continued. "We've used these methods to help clients go from their first store to their next 10 or 20 stores."

Standout client wins include:

Several Gas/C-Store operators opened new locations through sale-leasebacks executed by Joshua Berger; one notable client expanded from 1 to over 30 stores between 2023 and 2025.

An auto service operator went national with their brand and broke out of their home state of Florida, going from 5 locations to 18 by the end of 2025.

Vibe Restaurants completely offset their expansion costs into the Whataburger brand through multiple sale-leasebacks in 2024-2025.

Century Partners assisted multiple other franchise brands with their real estate expansions, including franchisees of Wendy's, 7 Brew, and Freddy's Frozen Custard & Steakburgers.

"We are here to help the entrepreneurs of America scale faster. We're a small business helping other dreamers," said Kramer.