Texas Roadhouse NNN
lease analysis.
Texas Roadhouse is among the strongest-performing casual-dining NNN tenants. The company's same-store sales have outperformed most casual-dining peers, and corporate-signed leases carry solid credit backing. Cap rates sit wider than Chick-fil-A or major QSR credit but tighter than most other casual-dining operators (Applebee's, Outback, etc.) reflecting the stronger operating fundamentals.
Quick reference · Texas Roadhouse
- Legal entity
- Texas Roadhouse, Inc.
- Parent
- Texas Roadhouse, Inc. (TXRH)
- Credit profile
- Publicly traded casual dining operator with strong same-store sales and operational discipline; not investment-grade but solid credit perception.
- Typical lease
- NNN with corporate guarantee; some ground lease structures.
- Typical term
- 15–20 years initial with 5-year options.
- Rent bumps
- 10% every 5 years typical.
- Prototype size
- ~7,000–8,500 SF on a 2.0–3.0 acre pad.
- Cap rate band
- 6.00–7.25% (2026)
About Texas Roadhouse as a NNN tenant
Texas Roadhouse is among the strongest-performing casual-dining NNN tenants. The company's same-store sales have outperformed most casual-dining peers, and corporate-signed leases carry solid credit backing. Cap rates sit wider than Chick-fil-A or major QSR credit but tighter than most other casual-dining operators (Applebee's, Outback, etc.) reflecting the stronger operating fundamentals.
How Texas Roadhouse structures its NNN leases
Texas Roadhouse NNN leases carry corporate guarantee from Texas Roadhouse, Inc. Most are triple net with 15-20 year primary terms.
Store specs and site profile
Prototype is 7,000–8,500 SF sit-down restaurant on a 2.0–3.0 acre pad with dedicated parking (typically 150-200 spaces given casual-dining dwell time).
Red flags on a Texas Roadhouse NNN deal
- Casual dining sector faces structural headwinds vs. QSR
- Corporate vs. franchisee-signed lease distinction
- Short remaining primary term
- Basis relative to QSR replacement cost (casual dining basis is often higher)
What to underwrite before buying a Texas Roadhouse property
- Corporate vs. franchisee lease
- Remaining primary term and options
- Trade-area casual-dining demand and demographics
- Same-store sales context from Texas Roadhouse earnings
- Basis vs. local pad replacement cost
Frequently asked questions
Is Texas Roadhouse a safe casual-dining NNN investment?
Texas Roadhouse is considered among the strongest casual-dining NNN credits due to consistent same-store sales growth and operational discipline. The casual-dining sector broadly faces headwinds, but Texas Roadhouse's financial performance is an outlier among casual peers.
What cap rate is typical for Texas Roadhouse NNN?
In 2026, corporate-signed Texas Roadhouse NNN in primary markets trades at 6.00–6.75% cap rates. Franchisee leases are typically 50–100 bps wider.
Using Texas Roadhouse in a 1031 exchange
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