
Restaurant Finance Executive Summary
- 2022 traditional restaurant financing volume of $13.4 billion represents a -25% y/y decrease after a record 2021 and was -15% lower than last year’s survey projections.
- 25% of participating financiers expect to increase 2023 loan originations (vs. 2022) while 19% plan to cut back, resulting in an expected +6.6% net increase to $14.2 billion.
- 2022 loan portfolio balance increased by +6.2% to $65.6 billion (record high) as higher net new originations more than off-set principal repayments.
- Lenders indicate a modest deterioration in the financial condition of their QSR borrowers in 2022 (we illustrate with a underwriting model tracking a 2019 credit) but a slight improvement in FSR – QSR borrowers are still outperforming overall.
- Interest rate spreads remain stable but borrowing indexes have increased dramatically over the last 9 months.
- Leverage underwriting ratios remain conservative relative to 2019 (although significantly more favorable for QSR) with total debt ratios expected to tighten slightly in 2023.

2H:22 Valuations & Cap Rates Executive Summary
- Aggregate franchisee unit-level EBITDA valuation multiples contracted for the second consecutive period and a 1H:23 EBITDA multiple outlook of a -4.5% decline would be the biggest contraction since 1H:20.
- Aggregate cap rates for single-tenant net-leased $1B+ chain restaurant properties increased only +10 bps in 2H:22 but recent property price reductions are driving cap rates higher and transaction volume lower.

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