category behind the much larger names of Chick-fil-A, KFC, and Popeye’s. Average annual store sales are strong at close to $2.2 million and in 2013 it became a billion dollar chain. To continue its growth objectives, Zaxby’s is reportedly working on an initial public offering (IPO) of around $200 million that could come as early as the fourth quarter of 2016. Though the IPO market has been slow in recent months, the past two years have seen a spate of “fast-casual” restaurant IPOs, including chicken and biscuit chain Bojangles Inc., pizza chain Papa Murphy’s Holdings Inc, and wings restaurant Wingstop Inc.
Zaxby’s locations are in freestanding buildings with drive-thru windows. The average restaurant is 3,300 to 3,800 square feet on approximately one acre. Preferred sites can be suburban or rural but need strong residential and daytime populations driven by office, retail, and university environments. The typical Zaxby’s lease is absolute triple net for a 20-year primary term with either annual or periodic rent increases.