5624 Watauga Rd — Golden Glaze Owner-Occupied Acquisition

01The Opportunity

A corner-lot, modern metal-construction retail building with drive-through capability and ample parking. The seller offers an immediate-income leaseback on ~2,000 SF, leaving 6,030 SF for Golden Glaze to occupy — which is exactly what unlocks SBA owner-occupied financing.

Property facts

Address5624 Watauga Rd, 76148

Building size8,030 SF

Year built2023 (new)

Lot size0.91 AC · corner

ConstructionMetal · 1 story

Drive-throughYes

Property typeRetail (Class C)

Occupancy split

Mr. Froze (leaseback tenant)~2,000 SF · 25%

Golden Glaze (owner-user)~6,030 SF · 75%

SBA owner-occupancy required51% min

StatusClears easily

Because GG occupies well above 51%, the building qualifies for SBA 504 / 7(a). You keep Mr. Froze as a paying tenant in the other 25% (SBA allows leasing up to 49% of an existing building) and that rent helps your coverage.

The leaseback is the hook — read it right. This is marketed as an investment priced on a cap rate, but the leaseback is only ~25% of the building. The other 75% you occupy yourself, so for that portion you're an owner-user buying real estate, not an investor buying income. Don't let the broker price the whole building on the investment premium.

02Why SBA 504

For a real-estate-heavy, owner-occupied purchase, the SBA 504 is the cheapest capital available — lowest down payment and a long-term fixed rate you can't get on a conventional or 7(a) loan.

50% — Bank (1st lien)

Conventional first mortgage from your bank. ~25-yr amortization, market rate. Often the lead lender originates this piece.

40% — CDC / SBA

SBA-backed debenture through a Certified Development Company. 25-yr fixed rate — you lock today's rate for the life of the loan. This is the magic of 504.

10% — You (down)

Borrower injection. Lowest of any commercial structure (conventional wants 25–30%). Can sometimes be partly a seller note on standby.

504 vs 7(a)

Use 504 when the deal is mostly real estate (this one). Lower down, fixed rate, lower blended cost.
Use 7(a) only if you're also buying the Mr. Froze operating business or need working capital rolled in — variable rate, up to $5M, one loan.
This is a real-estate acquisition → 504 is the move.

The "new construction" nuance

Built 2023, but you're buying an already-built building, not constructing it with loan funds — so SBA treats it as existing and the 51% rule applies (which you clear). The stricter 60%-now / 80%-in-10-yr rule only hits ground-up construction. Expect the lender to confirm this classification; it's routine.

03Comps & Pricing

Asking price is $2,200,000 (Crexi) — about $274/SF on 8,030 SF. After a full research deep-dive (3 tracks, Jun '26) the honest read is: $274/SF is fair — at-to-slightly-above replacement cost for a metal building, not a discount. The earlier "below market / below replacement" framing was overstated. The corridor "comps" don't hold up like-for-like, and the value drivers are the 2023 vintage, the drive-through, the corner, and the in-place Mr. Froze income — not a cheap basis. Underwrite on income and unit economics, not on a price-per-SF bargain. deep-dive corrected, Jun '26

The two-PSF-world trap. QSR real estate trades in two non-interchangeable worlds. (1) Net-lease investment sales — a leased building bought by a passive investor, priced off capitalized rent — run $700–$1,200/SF in TX. (2) Owner-occupant / replacement-cost sales — what this is — run $250–$450/SF. This deal lives in world #2. Comparing $274/SF to net-lease PSF (or even the $372 conventional-retail average) makes it look cheap, but that's apples-to-oranges. The right test is replacement cost — and it passes at par, not at a discount.

Replacement-cost stack (metal build) verified

Land (~0.85 ac corner pad, est.)~$370K

PEMB finished shell w/ MEP~$482K

QSR fit-out / kitchen (blended)~$1.04M

Drive-thru + sitework~$300K

Soft costs (~20%)~$365K

All-in mid (range $212–449/SF)~$2.56M · $319/SF

Build-it-new lands ~$212–449/SF (mid ~$319). The $274 ask sits in the lower-middle — you're paying roughly cost-to-replace and skipping 6+ months of construction + lease-up risk. Asterisk: the biggest layer is QSR fit-out — if GG rips out the existing kitchen, that's value you discard, which makes $274 look rich. Walk the kitchen before anchoring.

Cap-rate signals (Mr. Froze portion) verified

Corporate-credit QSR NNN~5.8%

Franchisee QSR (avg)~6.8%

Franchisee QSR, under-10-yr term~7.55%

Watauga (softer submarket) anchor7.25–7.75%

GG is franchisee/owner-operator credit, not corporate — underwrite the leased portion at ~7.5%, not the ~5.8% a broker will pitch. The cap rate only governs the ~25% leased to Mr. Froze; the rest is owner-occupied and valued on replacement, not yield.

Why the corridor "comps" don't hold up corrected

5625 Watauga Rd — 2,100 SF, built 1950, 2 bldgs, no drive-thru$849K ask

8247 Rufe Snow Dr — 10,233 SF, built 2005, multi-tenant strip$4.5M ask

Son-of-a-Butcher "sales" (Sep '25) — all ground leasesprice n/a

This deal — 8,030 SF, 2023, single-tenant + drive-thru$2.2M ask

The earlier $404 & $440/SF "comps" are mirages: 5625 is a 75-year-old 2,100 SF two-building infill parcel (PSF is a land/optionality artifact); 8247 is a 2005 multi-tenant strip priced on rent roll, not construction. Both are conventional, not metal, and neither is an owner-user QSR. The Son-of-a-Butcher trades were all ground leases (land only, no price disclosed) — not usable as building comps. No 2023-vintage metal QSR drive-thru resale exists in the corridor — the SBA appraiser will need CoStar/MLS closed sales.

Negotiating wedge. Seller's likely all-in basis is ~$2.0–2.1M (2021–22 land + a cheap metal shell ~$45–60/SF + fit-out + soft costs). The $2.2M ask is priced at their basis — they're not sitting on appreciation, and at $274/SF they're quietly pricing a metal building like conventional construction. Anchor opening at ~$1.9–2.0M ($237–249/SF): documented basis, minus metal-vs-masonry, minus any fit-out you'll replace. The Mr. Froze income is the only thing justifying a premium above replacement — make them prove it on the income approach, and don't let them double-count "new construction" and "leased asset."

Diligence flags before you anchor a number

Confirm fee-simple, not a ground leasethesis-breaker

Walk the kitchen — keep or rip-and-replace?±$300–600K

Confirm SBA-504 lender has no metal-construction haircutfinancing risk

Pull TAD parcel 42996692 — exterior-wall class + exact lot size±$200K land

Ground leases are common in this exact submarket/developer ecosystem (the Son-of-a-Butcher pads all were) — confirm the land conveys. The fit-out scope GG actually keeps and the true lot size are the two assumptions that move the answer most.

Sources: Crexi / LoopNet / @properties (subject + corridor listings), Tarrant Appraisal District (parcel records), Partners DFW Retail Q1 2026, Matthews TX QSR H1 (net-lease avg $742/SF, 5.8% cap), InvestmentGrade Q1 2026 (franchisee QSR cap rates), Boulder Group / Northmarq net-lease, Hanley Investment Group (Son-of-a-Butcher / Portillo's DFW drive-thru ground leases, Sep 2025), Star Building Systems / American Steel / BuildingsGuide (PEMB cost), Maxx Builders / EB3 / Terrapin (TX construction & QSR fit-out cost). Deep-dive validated by 3-track research team, Jun 2026.

04Interactive Underwriting Model

Drag the inputs to pressure-test the deal. Two coverage lenses — the consuls forced this split (see §06): Store-profit DSCR leans on the new shop's cash flow, Rent-roll DSCR underwrites the building on market rent alone (GG pays itself + Mr. Froze), which is how a lender sizes the real estate. Lenders want ≥ 1.25×.

Purchase price $2,200,000

Down payment 10%

Bank tranche (1st lien) 50%

CDC/SBA tranche: 40%

Bank rate 7.25%

CDC rate 6.50%

Amortization 25 yrs

GG store sales / month $60,000

Store margin (before occupancy) 25%

Mr. Froze rent / year $40,000

GG market rent / year $120,000

~6,030 SF @ ~$20/SF NNN. What GG would pay a landlord — drives the rent-roll DSCR.

Store-profit DSCR

1.00×

Target ≥ 1.25×

Rent-roll DSCR

0.96×

How a lender sizes the RE

Cash to close

$290,000

down + ~1.5% CDC fee + ~$50k soft costs

Price / SF

$361

vs ~$325 target

Bank loan (1st lien)
CDC / SBA debenture
Borrower down payment
Bank payment / mo
CDC payment / mo
Total debt service / mo
Total debt service / yr

GG store revenue / yr
Store cash flow before occupancy
+ Mr. Froze rent / yr
Cash available for debt service
Annual debt service
Surplus / (shortfall) after debt

GG market rent / yr (paid to itself)
+ Mr. Froze rent / yr
Total rent roll
Annual debt service
Rent-roll DSCR

Sensitivity — DSCR by price & store margin

Green ≥ 1.25× · Amber 1.00–1.25× · Red < 1.00× (at current rate & sales inputs)

Margin ↓ / Price →	$2.0M	$2.2M	$2.4M	$2.6M

Read this before you obsess over the single-store DSCR. SBA underwrites your global cash flow — all 7 Golden Glaze shops + FlexStay — not just this one store, so approval likely isn't the question. But the consuls (§06) flagged that the store-profit number double-counts the rent GG stops paying. The honest test is the rent-roll DSCR: on market rent alone the building sits near 0.96× at ask — it does not self-fund as real estate. That's a price-and-rent discipline signal, not a dealbreaker if global coverage carries it. Every $100k off the ask ≈ $8.5k/yr less debt service.

Assumptions & disclaimer. Figures are estimates for internal planning only — not a loan commitment, appraisal, or offer. "Store margin before occupancy" = store-level cash flow after COGS, labor, and opex but before rent/mortgage and before debt service. Default base case: $2.2M price, 10% down, 50/40/10 split, 7.25% bank / 6.50% CDC, 25-yr amortization, $60k/mo sales, 25% margin, $40k/yr Mr. Froze rent, $120k/yr GG market rent. Cash-to-close approximates CDC processing (~1.5% of debenture) + ~$50k soft costs (appraisal, Phase I, title, legal, packaging); confirm exact figures with your lender. Note: a limited-/special-purpose property or a new business at the site can push the 504 down payment to 15–20% — model it with the down-payment slider. The bank first lien may reset/balloon at yr 5–10 rather than stay fixed 25 yrs. Verify the Mr. Froze lease terms and GG store projections before acting.

05Action Plan

From "I want this" to keys in hand. SBA 504 typically closes in 45–75 days when the package is clean and you use a Preferred Lender.

Lender package checklist

3 yrs business tax returns (Golden Glaze entity)
3 yrs personal tax returns + personal financial statement
YTD P&L + balance sheet, business debt schedule
Store-level pro forma for the Watauga location
Mr. Froze lease (rate, term, who pays taxes/insurance)
Purchase contract / LOI once price is agreed
Entity docs, ownership %, business plan summary

What lenders want to see

Owner-occupancy51%+ ✓ 75%

Global DSCR≥ 1.25× likely ✓

Credit (personal FICO)~680+

Down payment10% 15–20% if special-purpose

Property appraisalsupports price

Get the Mr. Froze lease termsAsk is in at $2.2M / $274/SF. Last number you need is the leaseback rent + remaining term — it sets the income side of the DSCR.
Submit LOI / negotiate priceAnchor with the owner-user argument: 75% isn't an income asset, it's just real estate.
Engage an SBA Preferred Lender (PLP) + a strong CDCLive Oak, Newtek, Byline, Readycap, or a top regional bank. PLP status = delegated authority = weeks faster.
Underwriting & appraisalLender pulls global cash flow, orders appraisal + environmental (Phase I likely).
SBA authorization & closingCDC files the debenture, bank funds the first lien, you wire ~10% + fees.
Build-out & open shop #8Take possession of the 6,030 SF, keep Mr. Froze paying rent in their 2,000 SF.

06Consul Review — Devil's Advocate

Three advisors were spun up to attack this model, not bless it. They converged on one thing: the original 1.32× standalone DSCR was optimistic. Corrected for the phantom-rent double-count, a Year-1 ramp, and real SBA costs, the building does not self-fund as real estate — it clears on Golden Glaze's global cash flow, not its own. The deal still has a strong floor (sub-replacement-cost price), but the cash-flow story needed rebuilding.

🛑 Red-team — attack the assumptions

Day-1 ≠ Year-3. New donut shops don't open at $60k/mo — they ramp (~$25–35k early). Month-1 standalone DSCR is closer to 0.78×, not 1.32×.
25% margin borrows rent you now pay. A single shop nets 10–18% after real labor/COGS/waste; the 25% figure quietly excludes occupancy. Haircut to ~15% and store profit drops $180k → $108k.
Leaseback is binary. Mr. Froze is 18% of income with an unknown term. If he rolls off, coverage craters. Get the estoppel + lease before signing.
Bank lien likely isn't 25-yr fixed. The 50% first usually resets at yr 5–10. A reset to ~9.25% pushes a thin 1.32× toward ~1.15×.
Drive-through donut build = special-purpose. Likely 15% down, maybe 20% as a new business at the site.

Verdict: Qualified go on price, no-go on the model's cash-flow story. Honest Year-1 standalone DSCR is below 1.0×; it lives or dies on the other businesses carrying year one.

♟ Strategist — is this the right use of capital?

The $220k down is the kitchen raise's collateral. That cash + a personal guarantee on ~$2M of debt sits on the same balance sheet you're showing investors for the $1M commissary. You're pre-spending borrowing capacity.
Early rollups keep capital in the OpCo. Unit-level ROIC should beat the ~6–8% of owning the slab. Owning beats leasing only once the concept's proven and capital has nowhere better to go — not at 7→10 shops mid-raise.
The building is wagging the dog. Was Watauga on the shop-#8 list before this listing? A cheap building in the wrong trade area is still the wrong trade area.
Three new fronts at the worst time. Close a $2.2M deal + open a shop + become Mr. Froze's landlord, all while running two businesses and a live raise with no W2.

Verdict: Wait — unless Watauga was independently chosen as shop #8 before this building came up. That single fact flips it to proceed.

📒 Controller — the mechanics

Phantom-rent double-count (the big one). Counting the 25% store profit and treating the building as covered banks the rent GG stops paying twice. On a clean rent-roll basis — ~$120k GG (6,030 SF @ ~$20/SF NNN) + $40k Mr. Froze = ~$160k rent vs ~$167k debt = 0.96×, not 1.32×.
Down payment is probably 15%, not 10%. Special/limited-purpose + new business at the site → injection ~$330k, not $220k.
Cash-to-close omits the soft-cost stack. CDC processing (~1.5% of debenture), guaranty/funding fees, packaging, appraisal, Phase I, title, legal — another ~$40–60k+.
Bank first lien resets at yr 5–10 — modeling it fixed 25-yr understates refinance risk.
Use a separate RE LLC leasing to the GG OpCo — clean rent roll, liability isolation, depreciation, and it walls the SBA debt off from the $1M raise.

Bottom line: Corrected, this is ~0.95–1.0× rent-roll DSCR with ~$370–390k cash to close (15% down + soft costs), not 1.32× at $220k. It does not clear as drawn — it needs higher contracted GG rent, more equity, or documented store-profit support without the double-count.

Maple's synthesis — what actually changes. All three are right that the headline 1.32× was flattered. The model now shows two DSCRs: store-profit (optimistic) and rent-roll (~0.96×, how a lender sizes the RE). The price floor is still the best part of this deal — $274/SF under replacement cost limits the downside even if you re-tenant. Net: this is fundable on global cash flow, but it's not a self-funding real-estate play, and it shouldn't jump the queue ahead of the commissary unless Watauga was already your next shop. Three gating questions before an LOI: (1) was Watauga already shop #8? (2) what are Mr. Froze's actual rent + term? (3) does your SBA lender classify this special-purpose (15–20% down)?

Original base case (as first modeled)

Standalone DSCR1.32×

Down payment10% · $220k

Cash to close~$240k

Basisstore profit + rent

Consul-corrected base case

Rent-roll DSCR~0.96× thin

Down payment15% · ~$330k

Cash to close~$370–390k

Clears viaglobal cash flow ✓

07Research Appendix — Comp Deep-Dive

Three parallel research tracks (live web, Jun '26) rebuilt the comp set from primary records. Headline: $274/SF is fair — at-to-slightly-below replacement cost, not a discount. The earlier corridor "comps" don't hold up like-for-like, and the Son-of-a-Butcher "sales" were ground leases with no disclosed price. Full detail, confidence flags, and sources below. asking ≠ closed sale — SBA appraiser will need CoStar/MLS closed comps

Track 1 — Corridor listings (why they're not like-for-like)

5625 Watauga Rd not comparable

Asking~$849,000

Implied $/SF (≈2,100 SF)~$404/SF

Building2 structures, ~2,100 SF total

Lot0.499 ac (~21,700 SF)

Year built1950

Drive-throughnone

Constructionconventional (not metal)

A 75-year-old, 2,100 SF two-building infill parcel. The $404/SF is a tiny-denominator land/optionality artifact, not a QSR construction comp. ~8+ months on market.

8247 Rufe Snow Dr not comparable

Asking$4,500,000

$/SF (10,233 SF)~$440/SF

Typemulti-tenant strip (Gateway Center)

Lot~1.44 ac

Year built2005–2006

TenantsJ Donuts, dental, smoke shop +more

Constructionconventional (not metal)

A stabilized multi-tenant investment asset priced on rent roll / cap rate — not an owner-user freestanding QSR. Wrong asset class for this comparison.

Track 2 — QSR drive-thru transactions & cap rates

Son-of-a-Butcher / Portillo's DFW deals (Sep '25) ground leases — no price

Property	SF	Structure	Price
Son of a Butcher — Grapevine (SH-114)	2,389	15-yr NNN ground lease	n/a
Son of a Butcher — Fort Worth (Alliance)	2,247	15-yr NNN ground lease	n/a (off-mkt)
Portillo's — Grapevine (SH-114)	6,250	10.5-yr NNN ground lease	n/a (rent >$300k/yr)

All three were ground leases — the investor bought the land, the tenant owns the building, and no sale prices were disclosed. Not usable as building-$/SF comps. (Hanley Investment Group, ~Sep 17 '25.) A real fee-simple analog — a 2,500 SF Starbucks drive-thru in Gadsden AL — sold May '25 at $3.0M / $1,200/SF / 6.29%, but that's corporate-credit net-lease investment pricing, the opposite world from an owner-user.

Franchisee QSR cap rates (the right benchmark for GG)

Segment	Cap rate
All franchisee QSR (avg)	6.80%
Franchisee QSR, 15–19 yr term	6.30%
Franchisee QSR, under-10-yr term	7.55%
All corporate-credit QSR (avg)	5.82%
TX QSR net-lease avg (Matthews H1)	5.8% · $742/SF

GG is franchisee/owner-operator credit, so underwrite the Mr. Froze leaseback at ~7.5%, not the ~5.8% corporate comp. The $742/SF TX net-lease average is investment-world PSF (capitalized rent) — it does not apply to an owner-user purchase and shouldn't be used to call $274/SF "cheap."

Track 3 — Replacement-cost stack (build-it-new, metal)

Layer	Low	Mid	High
Land (~0.85 ac corner pad, est.)	$225k	$370k	$610k
PEMB finished shell w/ MEP	$361k	$482k	$602k
QSR fit-out / kitchen (blended)	$723k	$1,044k	$1,365k
Drive-thru + sitework	$200k	$300k	$430k
Soft costs (15–25%)	$193k	$365k	$599k
All-in total	~$1.70M	~$2.56M	~$3.61M
$/SF (÷ 8,030)	~$212	~$319	~$449

The $2.2M / $274/SF ask sits in the lower-middle of the $212–449/SF replacement range (mid ~$319). You're paying roughly cost-to-replace, minus 6+ months of construction + lease-up risk. Two assumptions move the answer most: (1) lot size — modeled at 0.85 ac, confirm at TAD (swings land ±$200k); (2) fit-out you keep — if GG rips out and rebuilds the donut line, strip $300–600k of "value to you" and $274 looks rich. Seller's likely 2023 basis is ~$2.0–2.1M, so the ask is priced at basis — anchor opening at ~$1.9–2.0M ($237–249/SF).

What we could NOT confirm from public record. Crexi / LoopNet / Tarrant Appraisal District all bot-block direct fetch, so these need a manual pull before LOI: (1) subject construction class + exact lot size — TAD parcel 42996692; (2) fee-simple vs ground lease — ground leases are common with this submarket/developer (the Son-of-a-Butcher pads all were); (3) construction class of the corridor comps (assumed conventional by vintage, not record-confirmed); (4) a closed-sale 2020+ metal QSR drive-thru comp in NE Tarrant — none surfaced in open web; the SBA appraiser will need CoStar/MLS.

Sources (live, Jun '26): 5625 Watauga (@properties) · 8247 Rufe Snow (Crexi) · 5624 subject (LoopNet) · Tarrant Appraisal District · Hanley — SoaB/Portillo's DFW ground leases · InvestmentGrade — QSR cap rates Q1 '26 · Matthews — TX QSR H1 · Star Building Systems — PEMB cost · BuildingsGuide — metal prices · Maxx Builders — DFW construction · EB3 — QSR drive-thru cost · Terrapin — TI buildout cost

08 · CEO Board — proceed or pass?

The question on the table: should GG buy 5624 Watauga as the vehicle to execute the centralized-kitchen plan (the $1M raise)? Four seats debated it independently.

Verdict: 4–0 PASS — not on the building, on using this building as the commissary. The board's core reframe: the building and the commissary are not the same project. Buying the real estate doesn't buy the production capacity, and it competes with the raise for the same guarantee and liquidity.

The capacity math that drives the room: a 10-shop donut commissary needs ~8,000 SF of production alone. This is 8,030 SF total — but ~75% is GG retail + drive-thru. Net production space ≈ 4,800–6,000 SF = a 5–6 shop commissary at full build. It physically cannot be the 10-shop hub the raise is meant to fund unless GG kills the retail/drive-thru use entirely.

💰 CFO — PASS

"$1M raise buys ~$500k of commissary capacity; this building is $2M of RE + retail + a tenant."
Scarce resource isn't equity — it's PG capacity + liquidity. The purchase spends both.
~$330k cash-to-close mid-raise depletes runway; the RE doesn't self-fund (corrected DSCR ~0.96x).

Flip: a signed Mr. Froze lease (term + escrow) plus a renewed pro-forma DSCR ≥ 1.25x on the building standalone.

🏭 COO — PASS

"Capacity — this is the deal-killer." ~8,000 SF production needed; retail+drive-thru leaves 4,800–6,000 SF = 5–6 shop hub.
Watauga is off-center. Logistics centroid for the shop network is Mid-Cities / HEB corridor, not NE Tarrant.
Fit-out is gutted on day one: "You're not buying a head start; you're buying drywall."

Flip: GG drops retail/drive-thru and dedicates the full 8,030 SF to production.

♟ Chief Strategy — PASS

Three fronts at once (operate, raise, develop RE) = derail risk.
Pre-spends creditworthiness and muddies 506(b) optics right when the raise needs a clean story.
"Opportunistic quality is how good operators talk themselves into mistimed deals."

Flip: Watauga was independently the chosen next commissary site on the merits — before this listing surfaced.

🛑 Dissenting Director — PASS

One test: "does it make the $1M raise more likely to succeed, or less? It makes it less."
"Drive-thrus don't make commissaries." Wrong building shape for the stated goal.
18-month regret scenario: capital tied in RE, raise stalled, commissary still not built.

Flip: a long-term Froze (or signed replacement) lease that pushes true DSCR comfortably above ~1.25x standalone.

Chair synthesis (Maple): the board is right that this is two decisions wearing one price tag. Solve the commissary the way it was scoped — the $1M raise funding a leased Mid-Cities production space sized and sited for 10 shops. Keep 5624 Watauga as a separate, later question, not the centralized-kitchen vehicle. Two independent locks have to click before it reopens: (1) decouple from the raise so it isn't competing for the same PG/collateral, AND (2) a DSCR-fixing signed lease (Mr. Froze long-term) or a confirmed trade-area fit that makes the building earn on its own. Absent both, it's a pass.

Decision

PASS — as the commissary vehicle Pursue the commissary via the raise + leased Mid-Cities space. Revisit Watauga only if it decouples from the raise and a long-term lease lifts standalone DSCR ≥ 1.25x.