-

KBRA Releases Research – Restaurant ABS Trends: Whole Business Transaction Operators Face Inflationary Challenges

NEW YORK--(BUSINESS WIRE)--KBRA releases research covering inflationary challenges and responses in the restaurant whole business securitization (WBS) sector.

The restaurant sector faces high inflation, tight labor markets, reduced margins, supply shortages, and an uncertain economic environment after navigating pandemic-related restrictions. In facing these headwinds, many restaurant operators in the WBS space continue to adopt strategies that help drive revenues, manage expenses, and respond to changing consumer behavior. These strategies include a continued focus on menu simplification, hours of operation, improved kitchen utilization, and off-premise dining—meals ordered from the restaurant but consumed elsewhere.

Key Takeaways

  • Inflation is impacting food prices, but not equally. Year-over-year price increases for food-at-home (i.e., groceries) are higher compared with food-away-from-home prices (i.e., restaurants).
  • WBS backed by restaurant brands have posted continued systemwide sales (SWS) growth in 2022, with securitization debt service coverage ratios decreasing somewhat during the same period but remaining generally healthy.
  • Restaurant operators are combatting inflationary pressures and labor shortages by focusing on a variety of strategies: off-premise dining, sourcing and distributing labor efficiently, better utilization of the kitchen and restaurant layout, menu simplification and diversification, and leveraging aggregator and brand-owned apps.

Click here to view the report.

Related Reports

About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

Contacts

Primary Authors

Xilun Chen, Managing Director
+1 (646) 731-2431
xilun.chen@kbra.com

Matthew Gardener, Associate Director
+1 (646) 731-1276
matthew.gardener@kbra.com

Maxim Berger, Director, Consumer ABS
+1 (646) 731-1260
maxim.berger@kbra.com

Additional Contacts

Eric Neglia, Senior Managing Director, Head of Commercial and Consumer ABS
+1 (646) 731-2456
eric.neglia@kbra.com

Rosemary Kelley, Senior Managing Director, Head of Global ABS
+1 (646) 731-2337
rosemary.kelley@kbra.com

Business Development Contact

Ted Burbage, Managing Director
+1 (646) 731-3325
ted.burbage@kbra.com

KBRA

Details
Headquarters: New York City, New York
CEO: Jim Nadler
Employees: 400+
Organization: PRI

Release Versions

Contacts

Primary Authors

Xilun Chen, Managing Director
+1 (646) 731-2431
xilun.chen@kbra.com

Matthew Gardener, Associate Director
+1 (646) 731-1276
matthew.gardener@kbra.com

Maxim Berger, Director, Consumer ABS
+1 (646) 731-1260
maxim.berger@kbra.com

Additional Contacts

Eric Neglia, Senior Managing Director, Head of Commercial and Consumer ABS
+1 (646) 731-2456
eric.neglia@kbra.com

Rosemary Kelley, Senior Managing Director, Head of Global ABS
+1 (646) 731-2337
rosemary.kelley@kbra.com

Business Development Contact

Ted Burbage, Managing Director
+1 (646) 731-3325
ted.burbage@kbra.com

More News From KBRA

KBRA Assigns Preliminary Ratings to OBX 2026-NQM2 Trust

NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to 14 classes of mortgage-backed notes from OBX 2026-NQM2 Trust, a $809.8 million non-prime RMBS transaction. The underlying collateral, comprising 1,553 residential mortgages, is characterized by fixed-rate mortgages (FRMs) and hybrid adjustable-rate mortgages (ARMs) making up 92.6% and 7.4% of the pool, respectively. A majority of the loans are either classified as non-qualified mortgages (Non-QM; 42.1%) or exempt (46.8%) from the Ab...

KBRA Assigns Preliminary Ratings to COOPR Residential Mortgage Trust 2026-CES1 (COOPR 2026-CES1)

NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to eight classes of Certificates from COOPR Residential Mortgage Trust 2026-CES1 (COOPR 2026-CES1), a $253.3 million RMBS transaction, as of the cut-off date, sponsored by Nationstar Mortgage LLC d/b/a Mr. Cooper and Loan Funding Structure VIII LLC and consists almost entirely of 3,438 newly originated closed-end second lien mortgages (CES; 99.9%). The underlying pool is seasoned one month and all loans are originated by Mr. Cooper. Th...

KBRA Assigns Preliminary Ratings to GS Mortgage-Backed Securities Trust 2026-NQM1 (GSMBS 2026-NQM1)

NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to 10 classes of mortgage-backed certificates from GS Mortgage-Backed Securities Trust 2026-NQM1 (GSMBS 2026-NQM1). GS Mortgage-Backed Securities Trust 2026-NQM1 (GSMBS 2026-NQM1), is a $410.6 million RMBS transaction sponsored by Goldman Sachs Mortgage Company (Goldman Sachs). The transaction is collateralized by a pool of 1,076 fixed-rate residential mortgages (FRM; 100.0%), and includes a meaningful concentration of collateral that...
Back to Newsroom