Fast Food Value Deals Are Losing Their Pull for Net-Lease Owners Article originally posted on Globe St. on August 18, 2026 For net lease investors, the latest fast-food earnings reports offer a reminder that a familiar brand name is not, by itself, a complete credit story. McDonald’s disappointing value-menu performance, a 7% same-store sales decline at Wendy’s and a 7.5% U.S. same-store sales decline at Wingstop suggest that discounts are not consistently bringing lower-income consumers back to restaurants. That matters to owners and buyers of QSR real estate because sustained traffic and restaurant-level profitability ultimately support the rent. Executives and industry sources who spoke with GlobeSt.com say the mixed results make franchise credit, lease structure and local operating performance increasingly important for underwriting considerations. McDonald’s second-quarter earnings release and conference call provided one of the clearest signals. The company had positioned its Every Day Affordable Price menu or EDAP, as a key part of its U.S. strategy, offering 10 items for under $3 and a $4 breakfast meal deal. But CEO Christopher Kempczinski said on the company’s Aug. 4 earnings call that the 10 items under $3 had not met expectations. “It was the last piece that we felt like we needed to get done in the U.S.,” Kempczinski said. “As we look at actually what happened in the quarter, the 10 items for under $3 has not delivered against our expectation.” The challenge is not simply whether consumers want lower prices. It is whether restaurant operators can execute promotions consistently enough to generate incremental visits without further pressuring already thin margins. For net-lease investors, that distinction is important: a value offering that fails to produce traffic can weaken tenant economics without resolving the underlying demand problem. McDonald’s Finds Execution Gaps McDonald’s Global CFO Ian Borden said similar value offerings had been successful in the company’s top international markets. In the U.S., however, inconsistent execution at the restaurant level and lower-than-expected consumer awareness reduced the program’s effectiveness. Kempczinski said only 60% to 65% of the system was executing the recommended pricing architecture for the 10 items under $3. The company also encountered marketing programs that did not meet expectations, customer confusion over replaced offers and an overload of deployments that made restaurant operations less efficient. Those operational issues had consequences. Service times increased and customer satisfaction scores declined, Kempczinski said. McDonald’s has long been viewed through both an operating and real estate lens, given its large restaurant footprint and franchise model. Still, the company’s experience shows the limits of a promotion-led strategy when execution varies across locations. Weakness Is Not Limited To McDonald’s If the problem were confined to McDonald’s, net-lease owners, operators and developers might view it as a company-specific issue. Recent results elsewhere in the QSR sector suggest a broader, though uneven, pressure on consumer demand. Wendy’s reported a 7% decline in same-restaurant sales, while international same-restaurant sales fell 2.3%. CEO Robert Wright said during the company’s Aug. 7 earnings call that the results reinforced the work needed to improve execution across the system. Wingstop reported a 7.5% decline in U.S. same-store sales despite its $1 wings promotion. Jason Milton, CEO of Custom Capital, told GlobeSt.com that the weakness was concentrated in urban markets, while visits in higher-income markets rose by as much as 9%. The divergence points to a more complicated consumer picture than a simple aversion to fast food or value offers. Some chains have found that value-focused strategies can still help drive sales and traffic. Burger King recently surpassed Wendy’s as the nation’s second-largest burger chain and Domino’s Pizza has found value offerings helpful in attracting customers, according to Reuters. The takeaway for investors is not that discounts no longer work; rather, their effectiveness appears to depend on a chain’s execution, the market it serves and the financial condition of its customers. Consumers May Be Cutting Trips, Not Trading Down Milton told GlobeSt.com that higher gasoline prices and financial pressure on lower-income households may be limiting fast-food visits more fundamentally than menu pricing can address. “Gasoline is at a $4.10 national average, up 30% year over year,” Milton said. “If price were the binding constraint, discounts would work. The reality is that low-income households simply have nothing to spend at all. They’re cutting fast food trips from the budget entirely.” That dynamic creates a difficult operating environment for restaurant tenants. Discounts can reduce margins, but if they don’t generate enough incremental visits, operators may be left with lower revenue and higher costs. Labor, food and occupancy expenses remain a continuing concern. “The concern for landlords is whether the restaurant can maintain enough traffic and profitability to support the rent over the long term,” Daniel Amodeo, president of Amo Realty, told GlobeSt.com. “If discounts aren’t bringing price-conscious customers back, operators can get squeezed from both directions: lower margins on discounted food and continued pressure from labor, food, and occupancy costs.” For net-lease owners, the question is less about whether a tenant is offering a deal this quarter and more about whether its store-level economics can sustain lease payments through changing consumer conditions. Underwriting Must Go Beyond The Brand The QSR sector’s mixed performance makes more detailed due diligence essential, particularly in franchise-backed deals. Investors should understand who is responsible for the lease, the economics of the underlying restaurant and how the property’s ownership and lease structure affect risk. Joshua Pardue, founder and principal of JPRE Development and a senior vice president in Northmarq’s New York office, told GlobeSt.com that investors should focus on whether they are relying on franchise or corporate credit, as well as the structure of the real estate transaction. “When looking at fast food net lease investments, it’s prudent to ask, ‘Is this a franchise credit or a corporate credit? Is this on a ground lease or a fee simple purchase?'” Pardue hypothetically laid out. “At times, those key questions emerge later and cause challenges.” For commercial real estate investors, the current discounting debate is therefore more than a consumer story. It is a tenant-credit story. As QSR operators work to restore traffic and preserve margins, the strongest restaurant net-lease investments may be those backed not just by recognizable brands, but by durable unit economics, sound lease structures and operators that can perform in a more selective consumer environment.