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Arby's Franchise Loan: The Complete Financing Guide for Arby's Franchise Owners
Opening an Arby's franchise represents a significant investment in one of America's most recognizable quick-service restaurant (QSR) brands. Securing the right financing is the critical first step toward turning your entrepreneurial vision into a thriving business with "the meats." This comprehensive guide will walk you through every aspect of obtaining an Arby's franchise loan, from understanding the initial costs to navigating the application process with an expert partner like Crestmont Capital.In This Article
- What is an Arby's Franchise Loan?
- Understanding Arby's Franchise Costs
- Types of Financing Available for an Arby's Franchise
- How the Arby's Franchise Financing Process Works
- Who Qualifies for Arby's Franchise Financing?
- How Crestmont Capital Streamlines Arby's Franchise Loans
- Real-World Arby's Financing Scenarios
- Comparing Your Arby's Financing Options
- How to Apply for an Arby's Franchise Loan
- Frequently Asked Questions
- Your Next Steps to Securing Funding
- Conclusion
What is an Arby's Franchise Loan?
An Arby's franchise loan is a specific type of business financing designed to cover the significant costs associated with opening and operating an Arby's restaurant. Unlike a generic business loan, these financial instruments are tailored to the unique requirements of the franchise model. Lenders who specialize in franchise financing, like Crestmont Capital, understand the Arby's brand, its operational model, and its financial projections. This specialized knowledge often leads to a smoother application process and more favorable terms for the borrower. The loan is not a single product but rather a suite of potential financing solutions. These can include government-backed loans from the Small Business Administration (SBA), conventional bank loans, equipment financing, and lines of credit. The purpose of the loan is to provide the necessary capital for a wide range of expenses, including:- The initial franchise fee paid directly to Arby's corporate parent, Inspire Brands.
- Real estate acquisition or leasing costs for the restaurant location.
- Construction or renovation expenses to build out the restaurant to Arby's specifications.
- The purchase of all necessary kitchen equipment, point-of-sale (POS) systems, and dining room furniture.
- Initial inventory of food, beverages, and paper goods.
- Working capital to cover payroll, utilities, and other operating expenses during the initial ramp-up period.
- Grand opening marketing and advertising costs.
Understanding Arby's Franchise Costs
Before diving into financing options, it's crucial to have a granular understanding of the total investment required to open an Arby's. The costs can vary significantly based on factors like geographic location, the size of the restaurant, whether you build from the ground up or convert an existing building, and local market conditions for labor and materials. Arby's provides a detailed breakdown of these estimated costs in its Franchise Disclosure Document (FDD), which is the primary source for all prospective franchisees. The total estimated initial investment to open a traditional Arby's restaurant typically ranges from approximately **$700,000 to $1,800,000**. This is a broad range, so let's break down the key components that contribute to this total figure.Key Initial Investment Components
- Initial Franchise Fee: This is a flat fee of **$37,500** paid to Arby's upon signing the franchise agreement. This fee grants you the license to use the Arby's name, trademarks, and operating system. For multi-unit developers, this fee may be structured differently.
- Real Estate and Site Development: This is often the largest and most variable expense. It includes the cost of purchasing land and constructing a new building or leasing a property and performing necessary tenant improvements. Costs can range from $300,000 to over $1,000,000 depending on the market.
- Building and Improvements: If you are constructing a new building, this covers all construction costs. If you are converting an existing space, it covers renovations, plumbing, electrical work, and ensuring the layout meets Arby's strict brand standards. This can easily cost several hundred thousand dollars.
- Equipment Package: This includes all kitchen equipment required to operate, such as ovens, slicers, fryers, refrigeration units, and warming stations. It also covers the point-of-sale (POS) system, drive-thru communication systems, and office equipment. This package can cost between $150,000 and $250,000. For more information on funding this specific area, see our guide on Equipment Financing.
- Signage and Decor: This covers all interior and exterior branding, including the iconic Arby's hat sign, menu boards, interior graphics, and dining room furniture. This can range from $50,000 to $100,000.
- Initial Inventory: You'll need to stock your restaurant with an opening supply of food, beverages, packaging, and cleaning supplies. This typically costs between $20,000 and $30,000.
- Grand Opening Advertising: Arby's requires franchisees to spend a certain amount on local marketing to promote the new location's opening. This is usually in the range of $15,000 to $25,000.
- Additional Funds (Working Capital): This is a crucial buffer of cash to cover operating expenses for the first three to six months. It includes payroll, rent, utilities, and unforeseen costs before the restaurant becomes self-sustaining and profitable. Arby's recommends having $50,000 to $100,000 or more in working capital.
By the Numbers
Arby's Franchise Financing - Key Statistics
$700k - $1.8M
Total estimated initial investment to open a new Arby's restaurant.
$500,000
Minimum liquid capital required by Arby's for a franchisee candidate.
$1,000,000
Minimum net worth required by Arby's for a franchisee candidate.
8.2%
Total ongoing fees (4% royalty + 4.2% advertising) as a percentage of gross sales.
Ongoing Fees
Beyond the initial investment, it's vital to budget for recurring fees that will impact your cash flow and profitability.- Royalty Fee: Arby's charges a royalty fee of **4% of gross sales**. This is paid weekly or monthly and covers the ongoing use of the brand and support systems.
- Advertising Fee: Franchisees are required to contribute **4.2% of gross sales** to national and local advertising funds. This collective marketing power is a major benefit of the franchise system, driving brand awareness and customer traffic.
Types of Financing Available for an Arby's Franchise
Securing a multi-million-dollar investment for your Arby's franchise requires exploring various financing avenues. There is no one-size-fits-all solution; the best option depends on your financial profile, the project's scope, and your long-term business goals. Here are the most common and effective types of financing for aspiring Arby's owners.1. SBA 7(a) Loans
The SBA 7(a) loan program is the most popular and versatile option for franchise financing. The Small Business Administration doesn't lend money directly; instead, it provides a government guarantee to partner lenders (like banks and credit unions) for up to 85% of the loan amount. This guarantee significantly reduces the lender's risk, making them more willing to approve loans for new businesses and offer favorable terms.Best For: First-time franchisees, comprehensive financing covering real estate, equipment, and working capital.
Key Features:
- Loan Amounts: Up to $5 million, which is typically sufficient to cover the entire Arby's project cost.
- Use of Funds: Extremely flexible. Can be used for the franchise fee, real estate purchase, construction, equipment, inventory, and working capital.
- Repayment Terms: Long repayment periods are a major advantage. Up to 25 years for real estate and up to 10 years for equipment and working capital. This results in lower monthly payments, which is critical for cash flow in the early years.
- Interest Rates: Rates are competitive and capped by the SBA. They can be fixed or variable, tied to the Prime Rate plus a lender-determined margin.
- Down Payment: Typically requires a 10% to 20% down payment or equity injection from the borrower.
Because Arby's is on the SBA Franchise Directory, the application process for an SBA Loans is streamlined, as the lender does not need to conduct a separate review of the franchise system's viability.
2. SBA 504 Loans
The SBA 504 loan program is specifically designed for financing major fixed assets, such as real estate and long-term equipment. It's an excellent choice if your plan involves purchasing land and constructing a new building for your Arby's. The loan is structured in three parts:- A senior lender (like a bank) finances about 50% of the project cost.
- A Certified Development Company (CDC), a nonprofit partner of the SBA, finances up to 40% of the cost with an SBA-guaranteed loan.
- The borrower contributes at least 10% as a down payment.
Best For: Purchasing land and constructing a new restaurant building; major equipment purchases.
Key Features:
- Loan Amounts: The SBA portion is typically capped at $5 million (or $5.5 million for certain projects), but there is no cap on the total project size.
- Repayment Terms: Very long terms with fixed interest rates. 20 or 25 years for real estate and 10 years for equipment.
- Interest Rates: The rates on the CDC/SBA portion are below-market and fixed for the life of the loan, providing long-term stability.
- Down Payment: The 10% down payment requirement is one of the lowest available for commercial real estate financing.
A 504 loan cannot be used for working capital or inventory, so it is often paired with another financing product, like a working capital loan or a business line of credit.
3. Conventional Term Loans
A conventional term loan is a traditional loan from a bank or other financial institution without a government guarantee. These loans can be more difficult to obtain for a new business, as the lender assumes 100% of the risk. However, for well-qualified borrowers with strong credit, significant collateral, and a substantial down payment, they can be an excellent option.Best For: Experienced business owners, multi-unit franchisees, borrowers with strong financial profiles and significant collateral.
Key Features:
- Loan Amounts: Flexible, depending on the lender and the borrower's qualifications.
- Repayment Terms: Typically shorter than SBA loans, often in the 5 to 10-year range.
- Interest Rates: Can be very competitive for top-tier applicants, but may be higher than SBA-guaranteed loans for others. Rates can be fixed or variable.
- Down Payment: Lenders usually require a higher down payment, often 20% to 30% or more.
- Speed: The funding process can be faster than an SBA loan since there is no government agency involvement.
4. Equipment Financing
If you are acquiring an existing Arby's and only need to finance new equipment, or if you want to separate your equipment costs from your main real estate loan, equipment financing is a perfect solution. This is a type of asset-based lending where the equipment itself serves as the collateral for the loan.Best For: Purchasing kitchen equipment, POS systems, furniture, and signage.
Key Features:
- Loan Amounts: Covers up to 100% of the equipment cost.
- Repayment Terms: The term of the loan is typically matched to the expected useful life of the equipment, usually 3 to 7 years.
- Interest Rates: Rates vary based on creditworthiness but are generally competitive.
- Speed: This is one of the fastest financing options, with approvals and funding possible in a matter of days.
- Simplicity: The application process is much simpler than for a full-scale real estate or construction loan.
5. Business Line of Credit
A Business Line of Credit is not typically used for the initial purchase of the franchise but is an invaluable tool for ongoing operations. It provides a revolving source of capital that you can draw from as needed to manage cash flow, cover unexpected expenses, or seize opportunities.Best For: Managing working capital, short-term cash flow gaps, and unexpected repairs or opportunities.
Key Features:
- Flexibility: Draw funds when you need them, up to your credit limit, and pay interest only on the amount you've used.
- Revolving: As you repay the principal, your available credit is replenished.
- Speed: Once established, accessing funds is nearly instantaneous.
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Apply Now ->How the Arby's Franchise Financing Process Works
Navigating the financing process for an Arby's franchise can seem daunting, but it follows a logical progression. Working with a knowledgeable partner like Crestmont Capital can demystify these steps and ensure you are prepared at every stage. Here is a typical timeline and breakdown of the process.Step 1: Pre-Qualification and Initial Consultation
The journey begins before you even submit a formal application. The first step is an initial consultation with a financing expert. During this phase, you will:- Discuss your project goals (new build, conversion, multi-unit development).
- Review your personal financial situation, including credit score, net worth, and liquid assets.
- Get a preliminary assessment of which loan programs you are most likely to qualify for.
- Receive a checklist of the documents you will need to gather for the formal application.
Step 2: Business Plan and Financial Projections
This is the heart of your loan application. Lenders need to see a comprehensive business plan that demonstrates you have a thorough understanding of the venture and a clear path to profitability. This document should include:- Executive Summary: A high-level overview of your request.
- Company Description: Details about your legal business structure and your vision for your Arby's franchise.
- Management Team: Bios of you and any partners, highlighting relevant restaurant or business management experience.
- Market Analysis: Research on your proposed location, target demographic, and local competition.
- Marketing and Sales Strategy: How you plan to implement Arby's marketing programs and drive local sales.
- Financial Projections: This is a critical component. You'll need to provide detailed, month-by-month financial projections for at least the first three years of operation. This includes projected profit and loss statements, cash flow statements, and a balance sheet. Arby's may provide some data in their FDD to help with this, but you must tailor it to your specific location and market.
Step 3: Gathering and Submitting Documentation
With your business plan complete, you will assemble a comprehensive loan package. This typically includes, but is not limited to:- Completed loan application form.
- Personal financial statements for all owners with 20% or more equity.
- Personal and business tax returns for the last 3 years.
- Resumes for all key principals.
- The full business plan and financial projections.
- A copy of your signed Arby's Franchise Agreement.
- Details on the use of loan proceeds (e.g., construction bids, equipment quotes).
- Legal documents for your business entity (e.g., articles of incorporation, operating agreement).
Step 4: Underwriting and Due Diligence
Once your package is submitted, it moves to the lender's underwriting department. This is the most intensive phase of the process. Underwriters will meticulously review every document to assess the "five Cs of credit":- Character: Your credit history and business reputation.
- Capacity: Your ability to repay the loan, based on your projected cash flow.
- Capital: The amount of personal funds (equity) you are injecting into the project.
- Collateral: The assets securing the loan (e.g., the real estate, equipment).
- Conditions: The purpose of the loan and the economic conditions of the industry and your local market.
Step 5: Loan Approval and Commitment Letter
If the underwriter is satisfied, they will recommend the loan for approval. Once approved, you will receive a formal commitment letter. This document outlines all the terms and conditions of the loan, including the loan amount, interest rate, repayment term, fees, and any closing conditions (called "covenants") that must be met before funding. It is essential to review this document carefully with your financial advisor or attorney.Step 6: Closing and Funding
The final step is closing. This involves signing all the final loan documents. For loans involving real estate, this process is similar to a residential mortgage closing and will involve a title company and attorneys. Once all documents are signed and all closing conditions have been met, the lender will disburse the funds according to the plan outlined in your application, allowing you to pay the franchise fee, begin construction, and order equipment. The entire process from initial application to funding can take anywhere from 45 to 90 days or more, particularly for complex construction projects financed with SBA loans.Who Qualifies for Arby's Franchise Financing?
Lenders and Arby's corporate have specific criteria to ensure that new franchisees have the financial strength and business acumen to succeed. While each lender has its own underwriting standards, the following qualifications are generally considered essential.Arby's Corporate Requirements
Before you can even apply for a loan, you must be approved as a franchisee by Arby's. Their requirements set the baseline for what lenders will expect to see.- Minimum Net Worth: Candidates are required to have a minimum net worth of **$1,000,000**. Net worth is calculated as your total assets minus your total liabilities.
- Minimum Liquid Capital: Candidates must have at least **$500,000** in liquid capital. This refers to cash or assets that can be quickly converted to cash, such as stocks, bonds, or money market funds. This capital is needed for the down payment and to ensure you have sufficient reserves.
- Restaurant Experience: Arby's strongly prefers candidates with multi-unit restaurant management experience, either as an owner or a high-level manager. This demonstrates you understand the complexities of the QSR industry.
- Commitment to Development: Arby's is often looking for partners who are willing to develop multiple units over time, not just a single location.
Lender Qualification Criteria
Once you are approved by Arby's, lenders will conduct their own evaluation based on several key factors.- Strong Personal Credit Score: A personal credit score of 680 or higher is typically required for most franchise loans, with scores above 720 being ideal. Your credit history is seen as a reflection of your financial responsibility.
- Sufficient Equity Injection (Down Payment): No lender will finance 100% of a project. You will be required to contribute a down payment from your personal funds. For SBA loans, this is typically 10-20%. For conventional loans, it can be 20-30% or more. This "skin in the game" shows your commitment and shares the risk with the lender.
- Relevant Industry Experience: As mentioned, restaurant experience is highly valued. If you lack direct experience, lenders will want to see that you have a strong general manager with proven experience as part of your team.
- Collateral: The loan will be secured by the assets being purchased, such as the restaurant's real estate and equipment. Lenders may also require a lien on your personal residence or other personal assets as additional security, especially for new ventures.
- A Viable Business Plan: A well-researched, detailed business plan is non-negotiable. Lenders need to be convinced that your specific location is viable and that your financial projections are realistic and demonstrate a clear ability to service the debt.
Key Insight: The relationship between Arby's corporate requirements and lender criteria is symbiotic. Meeting Arby's high financial standards for net worth and liquidity automatically makes you a much stronger candidate in the eyes of a lender, significantly improving your chances of loan approval.
How Crestmont Capital Streamlines Arby's Franchise Loans
Securing financing for a major franchise like Arby's is a complex undertaking. Partnering with a specialized financial consultant like Crestmont Capital provides a distinct advantage over navigating the process alone or approaching a single bank. Our expertise is in understanding both the nuances of franchise lending and the specific requirements of top-tier brands like Arby's.Deep Expertise in Franchise Financing
Unlike a general loan officer at a local bank who might handle one franchise deal a year, our team lives and breathes franchise financing. We understand the language of the FDD, the importance of the SBA Franchise Directory, and the specific underwriting criteria that lenders apply to QSR businesses. This expertise translates into a more efficient process and a higher likelihood of success. We know what lenders are looking for in an Arby's application and can help you structure your business plan and financial projections to meet those expectations. Our experience is not limited to one brand; we have helped finance other top QSRs, which you can read about in our guides to Five Guys Franchise Loan and Wingstop Franchise Loan financing.Access to a Broad Network of Lenders
Crestmont Capital is not a direct lender; we are a strategic partner that connects you with the right lender for your specific needs. We maintain relationships with a wide network of SBA-preferred lenders, national and regional banks, and alternative financing sources. This is a critical advantage. Instead of you applying to multiple banks one by one, we can present your single, polished application to several lenders simultaneously. This creates a competitive environment where lenders vie for your business, often resulting in better terms, lower interest rates, and more flexible conditions than you could secure on your own.Personalized Strategy and Application Packaging
We begin by conducting a thorough analysis of your financial profile and project goals. Based on this, we develop a customized financing strategy. We don't just point you to a loan type; we help you determine the optimal mix of financing. For example, we might recommend an SBA 7(a) loan for the bulk of the project and a separate equipment lease to preserve working capital. Our team then works with you to prepare a professional, "lender-ready" loan package. We help you refine your business plan, stress-test your financial projections, and gather all necessary documentation. A clean, comprehensive, and professionally presented package makes a powerful first impression on underwriters and significantly speeds up the review process.Key Insight: Our role is to act as your advocate and project manager throughout the financing journey. We handle the communication with lenders, answer their questions, and negotiate on your behalf, allowing you to focus on the other critical aspects of launching your Arby's franchise, like site selection and training.
Saving You Time and Money
The loan application process is time-consuming and fraught with potential pitfalls. A single missing document or poorly-worded projection can cause weeks of delays or even an outright rejection. By managing the process for you, we prevent these costly mistakes. Our established lender relationships and streamlined process mean we can often secure funding faster than traditional channels. Furthermore, by creating a competitive lending environment, we help ensure you receive the most favorable financial terms available, potentially saving you tens of thousands of dollars over the life of the loan. In essence, Crestmont Capital acts as your outsourced Chief Financial Officer for the purpose of securing your Arby's franchise loan. We provide the expertise, network, and dedicated support to transform a complex financial challenge into a successful funding outcome.Let Us Be Your Financing Partner
Experience the Crestmont Capital difference. Our experts will guide you through every step of the Arby's loan process.
Get Started Today ->Real-World Arby's Financing Scenarios
To better illustrate how different financing strategies can be applied, let's explore a few hypothetical scenarios based on common franchisee profiles.Scenario 1: The First-Time Franchisee with a New Build
Profile: Sarah is a successful corporate manager with a net worth of $1.2 million and $600,000 in liquid assets. She has some management experience but has never owned a restaurant. She has been approved by Arby's and has identified a prime location for a new ground-up construction project.
Project Cost: $1.6 million total.
Financing Challenge: As a first-time owner with a high-cost new construction project, traditional banks might view her as a higher risk. She needs a comprehensive loan that covers everything from land acquisition to working capital, with favorable long-term repayment to manage cash flow.
Optimal Solution: The SBA 7(a) Loan
- Loan Amount: Sarah applies for an SBA 7(a) loan for $1.36 million (85% of the project cost).
- Equity Injection: She uses $240,000 of her liquid capital for the 15% down payment required by the lender. The remaining $360,000 is kept as post-closing liquidity and working capital, which strengthens her application.
- Terms: The loan is a blended term. The real estate portion ($800,000) is amortized over 25 years, while the equipment and working capital portion ($560,000) is amortized over 10 years. This structure keeps her monthly payments manageable.
- Why it Works: The SBA guarantee mitigates the lender's risk associated with her being a first-time operator. The loan's versatility allows her to finance the entire project under one umbrella, and the long repayment terms are crucial for a new business's cash flow.
Scenario 2: The Experienced Multi-Unit Operator Expanding
Profile: David already owns three successful QSR franchises of another brand. He has a net worth of $5 million and significant cash flow from his existing businesses. He wants to diversify his portfolio by adding two Arby's locations over the next 18 months. His first project is a conversion of a former restaurant building.
Project Cost: $950,000 for the first location (lower due to it being a conversion).
Financing Challenge: David wants speed and efficiency. He has a strong track record and doesn't want to go through the extensive paperwork of an SBA loan if he can avoid it. He also wants a financing partner who understands his multi-unit growth plans.
Optimal Solution: A Conventional Term Loan + Business Line of Credit
- Loan Amount: David secures a $712,500 conventional loan from a commercial bank, representing a 75% loan-to-value (LTV).
- Equity Injection: He contributes a 25% down payment of $237,500.
- Terms: The loan has a 10-year term with a competitive fixed interest rate, reflecting his strong financial standing and proven track record. The approval process is much faster than an SBA loan, taking only 4-6 weeks.
- Additional Tool: He also establishes a $250,000 Business Line of Credit. He won't use this for the initial purchase but will have it available for future working capital needs, minor renovations, or as a bridge for his next Arby's location.
- Why it Works: David's strong financials and experience make him an ideal candidate for a conventional loan. He gets faster funding and potentially better rates. The line of credit provides the flexibility he needs as a multi-unit operator.
Scenario 3: The Franchisee Remodeling and Upgrading Equipment
Profile: Maria has owned her Arby's for 10 years. The location is profitable, but her franchise agreement requires a major remodel to meet Arby's current brand standards. She also wants to upgrade her kitchen with more efficient, modern equipment.
Project Cost: $300,000 total ($150,000 for remodeling, $150,000 for new equipment).
Financing Challenge: Maria doesn't need a large real estate loan. She needs targeted, fast funding specifically for the remodel and equipment without putting up her building as collateral for a small loan.
Optimal Solution: Equipment Financing and a Short-Term Business Loan
- Equipment Financing: Maria secures a $150,000 equipment loan. The new equipment serves as the sole collateral for this loan. The term is 5 years, matching the useful life of the assets. The application is simple and funding occurs in less than a week.
- Short-Term Loan: For the $150,000 remodel, she obtains a Long-Term Business Loans (in this case, a shorter-term one) with a 3-year repayment period. The loan is based on the strong, consistent cash flow of her existing business.
- Why it Works: This strategy is fast and targeted. It allows Maria to finance her specific needs without the complexity of a large SBA or conventional loan. By separating the financing, she gets terms that are appropriate for each use of funds and avoids encumbering her real estate. Many lenders offer Fast Business Loans for established businesses like hers.
Comparing Your Arby's Financing Options
Choosing the right loan is a critical decision. This table provides a side-by-side comparison of the most common financing options for an Arby's franchise to help you understand their key differences.| Loan Type | Best For | Loan Amount | Term | Speed |
|---|---|---|---|---|
| SBA 7(a) Loan | Comprehensive financing for new builds, acquisitions, equipment, and working capital. Ideal for first-time owners. | Up to $5 Million | 10-25 Years | Slow (45-90+ days) |
| SBA 504 Loan | Purchasing commercial real estate and major long-term equipment. Best for new construction projects. | Up to $5.5 Million (SBA portion) | 10-25 Years | Slow (60-90+ days) |
| Conventional Term Loan | Experienced multi-unit operators with strong financials and significant collateral. | Varies by lender | 5-10 Years | Moderate (30-60 days) |
| Equipment Financing | Funding for kitchen equipment, POS systems, furniture, and signage. Can be used for new purchases or upgrades. | Up to 100% of equipment cost | 3-7 Years | Very Fast (2-7 days) |
| Business Line of Credit | Ongoing working capital management, covering payroll, inventory purchases, and unexpected expenses. | $10k - $500k+ | Revolving | Fast (1-2 weeks to set up) |
How to Apply for an Arby's Franchise Loan
Applying for your Arby's franchise loan through a streamlined process with Crestmont Capital is straightforward. Follow these steps to get started on the path to funding.- Initial Assessment: The first step is to ensure you meet the fundamental requirements set by Arby's ($1M net worth, $500k liquid capital) and general lender criteria (good credit, relevant experience). Assess your financial standing honestly.
- Contact Crestmont Capital: Reach out to our team for a free, no-obligation consultation. This is the most critical step. We will discuss your project, review your qualifications, and provide an initial assessment of your best financing options. You can start this process by filling out our simple online application form.
- Prepare Your Documents: With our guidance, you will begin assembling your loan package. We provide a clear checklist so you know exactly what is needed. This includes your business plan, financial statements, tax returns, and your Arby's Franchise Agreement.
- Application Submission and Lender Matching: Once your package is complete and polished, we submit it to our curated network of lenders who are the best fit for your specific project. We manage this process, ensuring your application gets in front of the right decision-makers.
- Review and Negotiation: We will help you review any term sheets or commitment letters you receive. We act as your advocate, helping to negotiate the best possible rates and terms on your behalf.
- Closing: We coordinate with you, the lender, and any third parties (like title companies) to ensure a smooth and efficient closing process, getting you the capital you need to launch your Arby's franchise.
Your Arby's Journey Starts Here
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Apply Now ->Frequently Asked Questions
What is the total investment to open an Arby's? +
The total estimated initial investment for a new Arby's franchise ranges from approximately $700,000 to $1,800,000. This wide range accounts for variables like real estate costs, construction vs. conversion, location, and other factors. A detailed breakdown is provided in the Arby's Franchise Disclosure Document (FDD).
How much cash do I need to qualify for an Arby's franchise? +
Arby's requires prospective franchisees to have a minimum of $500,000 in liquid capital. This refers to cash and other assets that can be converted to cash quickly. This capital is used for the down payment on your loan and to provide a working capital cushion.
What credit score is needed for an Arby's franchise loan? +
While requirements vary by lender, a personal credit score of 680 or higher is generally the minimum threshold for consideration. To secure the most favorable terms and interest rates, a score of 720 or above is highly recommended. Lenders view a strong credit score as an indicator of financial responsibility.
Is an SBA loan the best option for financing an Arby's? +
For many franchisees, especially first-time owners, an SBA 7(a) loan is often the best choice due to its high loan amounts, long repayment terms, and flexible use of funds. The government guarantee makes it easier to get approved. However, for experienced operators or for specific needs like equipment, other options like conventional loans or equipment financing may be faster or more suitable.
How long does the financing process take? +
The timeline varies depending on the loan type and project complexity. A simple equipment loan can be funded in a few days. A complex SBA 7(a) loan for new construction can take 60 to 90 days or more from application to closing. Working with an expert like Crestmont Capital can help expedite this timeline by ensuring a complete and accurate application package from the start.
Can I finance 100% of the Arby's franchise cost? +
No, 100% financing is not available for a new franchise. Lenders require a significant equity injection or down payment from the borrower, typically ranging from 10% to 30% of the total project cost. This demonstrates your commitment and shares the financial risk.
What is the Arby's royalty fee? +
Arby's charges an ongoing royalty fee of 4% of your restaurant's gross sales. Additionally, there is a 4.2% advertising fee, for a total of 8.2% of gross sales paid to the franchisor for ongoing support and marketing.
Do I need restaurant experience to get an Arby's franchise loan? +
Yes, both Arby's and lenders strongly prefer candidates with multi-unit restaurant management experience. If you do not have this experience personally, your loan application will be much stronger if you have a designated General Manager with a proven track record as part of your business plan.
What collateral is required for the loan? +
The primary collateral will be the business assets being financed, including the commercial real estate (if purchased) and all equipment. Lenders, especially for SBA loans, will also typically require a personal guarantee from all owners with 20% or more equity, and they may place a lien on your personal residence as additional security.
Can I use the loan to finance multiple Arby's locations? +
Yes, financing can be structured to support a multi-unit development plan. Experienced operators often secure a larger loan or line of credit to facilitate the opening of several locations over a set period. This should be clearly outlined in your business plan.
What is the SBA Franchise Directory and why is it important? +
The SBA Franchise Directory is a list of franchise brands whose agreements have been pre-vetted by the Small Business Administration. Because Arby's is on this list, it streamlines the SBA loan application process. The lender can proceed with confidence, knowing the franchise system meets SBA eligibility requirements, which can speed up underwriting.
Can I use my retirement funds for the down payment? +
Yes, you can use a program called Rollover for Business Start-ups (ROBS) to use funds from an eligible retirement account (like a 401(k) or IRA) for your down payment without incurring early withdrawal penalties or taxes. This is a complex process, and it's essential to work with a financial advisor who specializes in ROBS to ensure it's structured correctly.
What are the ongoing support systems Arby's provides? +
Arby's provides comprehensive support, which is a key reason lenders feel confident in the brand. This includes initial training, site selection assistance, construction management, ongoing operational support from franchise business consultants, supply chain management, and powerful national and regional marketing campaigns.
Does Arby's offer financing directly? +
No, Arby's (and its parent company, Inspire Brands) does not offer direct financing to franchisees. However, they maintain relationships with third-party lenders who specialize in franchise financing and can provide a list of recommended sources. Working with a broker like Crestmont Capital gives you access to an even broader network of these lenders.
What is a Franchise Disclosure Document (FDD)? +
The FDD is a legal document that franchisors are required by law to provide to prospective franchisees. It contains 23 specific sections (called "Items") that detail information about the franchise system, including fees, estimated investment, litigation history, financial performance representations, and the franchise agreement itself. It is the single most important document to review before investing.
Your Next Steps to Securing Funding
You've learned about the costs, qualifications, and financing options. Now it's time to take action. Follow these structured next steps to move forward with confidence.Before anything else, gather your financial documents and calculate your precise net worth and liquid capital. Check your credit score. Ensure you meet the minimum thresholds required by Arby's to avoid any surprises.
Formally contact the Arby's franchising department to request their Franchise Disclosure Document. Review this document meticulously, ideally with an attorney who specializes in franchise law. This document is the blueprint for your investment.
This is your most important financial step. Contact our team to discuss your plans. We will provide a clear, expert assessment of your financing options and lay out a strategic roadmap to get you funded.
Conclusion
Investing in an Arby's franchise is a significant undertaking, but it offers the opportunity to partner with a world-class brand in the resilient QSR industry. The journey from aspiring franchisee to grand opening is paved with critical financial decisions. The most important of these is securing the right type of loan with the best possible terms. As we've explored, options range from versatile SBA loans ideal for new owners to swift conventional and equipment loans for experienced operators. Success in this endeavor hinges on thorough preparation: understanding the costs, meeting the stringent qualifications, and crafting a business plan that inspires confidence. Navigating this complex landscape alone can be overwhelming. Partnering with a franchise financing expert like Crestmont Capital provides the guidance, lender access, and strategic support necessary to streamline the process. We help you present your vision in the most compelling way, ensuring you not only get approved but also secure a financial structure that supports your long-term profitability and growth. Your dream of owning an Arby's is within reach-and the right financing is the key that unlocks the door.Disclaimer: The information provided in this article is for general educational purposes only and is not financial, legal, or tax advice. Funding terms, qualifications, and product availability may vary and are subject to change without notice. Crestmont Capital does not guarantee approval, rates, or specific outcomes. For personalized information about your business funding options, contact our team directly.
