VALUATION OF…
Fast Food Property
Quick-service restaurant premises, typically let to a franchisee on a lease linked to a national or international brand.
Content status: Methodology and evidence log — Sources, Caselaw and Market Information are added incrementally.
Methodology
Fast food property is generally valued using the Income Capitalisation Method, applied to a contract or market rental agreed with a franchise operator, given the strength and standardisation of national fast-food lease terms.
Under the Big Five framework, the Income Generating Unit is typically the whole premises let as a single drive-through or walk-in unit; contract rental is compared to market rental for comparable fast-food sites on similar traffic counts and visibility, and the capitalisation rate applied reflects the franchise brand covenant and the remaining lease term.
Site visibility, traffic count and drive-through configuration are the dominant value drivers. A Direct Comparison cross-check on a rate per square metre, or against sales of comparable fast-food outlets on similar sites, should be used to test the primary valuation.
Caselaw
Case law, regulatory rulings and expert-determination disputes relevant to valuing this asset class. Each entry cites its source and summarises the practice implication for valuers — this is not investment, financial, or legal advice.
The Evidence Log is for VDH Members
The Evidence Log for Fast Food Property — sourced sales, disposals and rentals with Valuer’s Lens commentary — is included in VDH Membership: from R125/month for SACPVP candidates and students, R399/month standard. All prices include VAT.
The methodology and case law on this page remain free to read.