5 Burger King locations in Iowa just sold for less than the price of a Whopper

• A franchisee just bought five Burger King locations in Iowa for just $1.
• The $1 price tag for five restaurants is uncommon, even in the pandemic, which has sparked massive disruption within the industry.
• Franchisees for chains including Pizza Hut, IHOP, and Subway have filed for bankruptcy in recent months.

Five Burger Kings are selling for less than the cost of a Whopper.

On Wednesday, Los Angeles-based Tasty Restaurant Group announced it was acquiring five Burger King restaurants in Iowa for just $1 from an unnamed seller. The deal includes three locations that are currently owned by the seller and two leased locations, the company said in a press release.

The $1 price tag for five restaurants is uncommon, even in the pandemic, which has sparked massive disruption within the industry.

A representative for Tasty Restaurant Group told Restaurant Business that the surprising deal is a "straightforward transaction, in which the operator is assuming the assets and liabilities held by each location it is acquiring."

The pandemic is presenting a chance for certain restaurant companies to acquire new locations. Chains including Papa John's, Dunkin', and McDonald's have said that the pandemic presents opportunities for franchisees to acquire new real estate and open more restaurants.

At the same time, franchisees across major brands have declared bankruptcy in recent months. NPC International, the largest franchisee in the US with more than 1,600 Pizza Hut and Wendy's locations, filed for bankruptcy in early July, and is attempting to sell at least some of its restaurants. Smaller franchisees at chains such as Pizza Hut, IHOP, and Subway have also filed for bankruptcy.

"The sale might be a small one, but it's also a sign of the challenges in the franchise space, where small franchisees struggle to get financing for remodels or expansion and end up selling to much larger companies, which amass greater and greater holdings," reports Restaurant Business' Jonathan Maze, who called the $1 price "eye-popping."