Jonathan Hill, Co-Founder, Morrow Hill

It’s a whirlwind of challenges and opportunities right now. We’re still dealing with a tight labor market, supply chain disruptions, and rising food prices. Market availability is at an all-time low of just under 5 percent, while demand is at a record high. In other words, it’s an extremely competitive market.

Rents have risen 2.6 percent over the past year, reaching a record average of $25 per square foot. Given these factors, landlords have significant negotiating power, especially for smaller spaces under 2,500 square feet, which are in high demand.

Interestingly, much of this leasing activity is due to the growth of quick service restaurants and personal services. Record spending on dining out has resulted in food and beverage retailers now accounting for nearly 20 percent of all leasing activity – another new record.

In this highly competitive market, it is critical for franchises to be well represented when negotiating their leases. The stakes are higher, and securing prime locations requires extra time and patience to overcome unexpected hurdles. Franchises that can adapt to these unprecedented market conditions and stay ahead of the curve will thrive.