Charley's Philly Steaks is one of the fastest-growing fast-casual chains in North America, with over 600 locations across the United States and internationally. Known for its authentic Philly-style cheesesteaks, grilled chicken subs, and loaded fries, Charley's has carved out a loyal customer base in malls, airports, military bases, and strip centers. For ambitious entrepreneurs looking to tap into the booming fast-casual market, a Charley's Philly Steaks franchise represents a compelling opportunity backed by decades of brand recognition.
But like any franchise investment, opening a Charley's location requires serious capital. Between franchise fees, construction costs, equipment purchases, and working capital reserves, total startup costs can range from $250,000 to over $800,000 depending on the location type and build-out requirements. That is where a smart financing strategy becomes essential. This guide covers everything you need to know about securing a Charley's Philly Steaks franchise loan - from understanding total investment costs to comparing loan options, qualifying requirements, and how Crestmont Capital can help you get funded faster.
Before you can map out a financing strategy, you need a clear picture of what a Charley's Philly Steaks franchise actually costs. According to the brand's Franchise Disclosure Document (FDD), total investment costs vary based on the type of location - inline mall, airport, food court, strip center, or freestanding building.
Total initial investment for a Charley's Philly Steaks franchise typically ranges from $249,000 to $846,000, depending on location type, lease terms, and local construction costs. The franchise fee alone is $29,500.
Here is a breakdown of the major cost components you will need to plan for:
Construction and leasehold improvements are typically the largest cost category. Depending on whether you are converting an existing space or building from scratch, these costs range from:
A Charley's kitchen requires specialized cooking equipment including flat-top grills, prep stations, refrigeration units, point-of-sale systems, and more. Equipment costs typically range from $60,000 to $130,000 for a standard location.
Charley's FDD recommends maintaining 3-6 months of working capital reserve, which typically amounts to $30,000 - $80,000. Pre-opening costs including training, staffing, and initial inventory add another $10,000 - $30,000.
Most lenders will want to see your full FDD, a signed lease or Letter of Intent for your location, your business plan, and personal financial statements. Charley's has a strong royalty structure and established brand name - both factors that work in your favor when applying for franchise financing.
When it comes to franchise financing, one size does not fit all. The right loan depends on your credit profile, liquid assets, chosen location type, and timeline. Here are the most common financing options available to Charley's franchise candidates.
SBA 7(a) loans are widely regarded as the best financing vehicle for new franchises. Through the SBA's 7(a) program, qualified borrowers can access up to $5 million with repayment terms up to 10 years for working capital and up to 25 years for real estate. For a Charley's franchise, SBA 7(a) loans are ideal for covering franchise fees, build-out costs, equipment, and initial working capital - all rolled into one convenient package.
Key benefits include:
According to SBA loan data, franchise businesses consistently have higher approval rates than non-franchise startups, largely because franchised brands come with proven business models and built-in support systems.
Learn more about SBA loans for franchise owners at Crestmont Capital.
If you plan to purchase property for a freestanding Charley's location, the SBA 504 loan program offers up to $5.5 million specifically for fixed assets like real estate and long-term equipment. The 504 structure typically involves a bank covering 50%, a Certified Development Company (CDC) covering 40%, and the borrower contributing 10% down.
Conventional term loans from banks or alternative lenders offer more flexibility than SBA loans in terms of documentation requirements and speed of funding. While interest rates may be higher, these loans can be funded in days rather than weeks. Small business loans from Crestmont Capital are designed for entrepreneurs who need capital quickly without navigating the SBA bureaucracy.
Equipment financing allows you to purchase your Charley's kitchen equipment - grills, refrigeration, POS systems - while spreading payments over 3-7 years. The equipment itself serves as collateral, making qualification easier even for borrowers with limited credit history. Explore equipment financing options at Crestmont Capital.
Charley's Philly Steaks does not directly offer in-house financing, but they maintain relationships with preferred lenders who specialize in franchise financing. These lenders understand the Charley's brand, FDD, and typical investment structure, which can streamline the approval process.
Crestmont Capital specializes in franchise business loans with fast approvals, flexible terms, and no prepayment penalties on most products.
Apply Now - Get Pre-Qualified in MinutesThe SBA loan program is the most commonly used financing vehicle for new franchise units, and for good reason. For a Charley's Philly Steaks franchise, SBA financing can cover virtually all of your startup costs in one loan - making it easier to manage cash flow during those critical first months of operation.
The SBA maintains a Franchise Registry that lists franchisors whose FDDs have been pre-reviewed, which can speed up the loan process. You will want to confirm whether Charley's Philly Steaks is listed on the current SBA Franchise Directory, which can be checked through the SBA's official website. Most established QSR brands qualify.
Here is the typical SBA franchise loan process:
As Forbes reports on SBA franchise loans, borrowers who prepare a detailed business plan and have strong personal credit (680+) tend to have significantly higher approval rates.
While requirements vary by lender, most SBA lenders look for:
One of the smartest ways to reduce your total borrowing needs is to finance equipment separately from your overall franchise loan. Equipment financing allows you to preserve working capital for day-to-day operations while still acquiring the high-quality cooking and POS equipment your Charley's franchise requires.
Standard Charley's restaurant equipment includes:
Total equipment costs for a typical Charley's unit run between $60,000 and $130,000. With equipment financing, you can cover this with a down payment as low as 10-20% and monthly payments spread over 3-7 years.
By financing $90,000 in equipment over 5 years at 8%, your monthly payment is approximately $1,823 - a manageable expense even in the first months of operation. This frees up capital for hiring, marketing, and inventory.
Learn more about equipment financing options at Crestmont Capital designed for restaurant and food service businesses.
Lenders evaluating franchise loan applications look at several key factors. Understanding what lenders want - and preparing accordingly - dramatically improves your approval odds.
Most conventional and SBA lenders require a minimum personal credit score of 650-680. The higher your score, the better your rates. Borrowers with scores above 720 typically qualify for the best terms. If your credit score is below 640, consider working with lenders who specialize in bad credit business loans before pursuing franchise financing.
Charley's corporate requires franchisees to have a minimum of $100,000 in liquid assets (cash, stocks, or other liquid investments). Lenders typically want to see even more - usually enough to cover your equity injection plus 3-6 months of operating expenses.
Charley's Philly Steaks requires prospective franchisees to demonstrate a minimum net worth of $250,000. This provides lenders with confidence that you have the financial stability to weather early-stage challenges.
A well-crafted business plan is not just a lender requirement - it is your roadmap to success. Your plan should include:
While not always required, having prior experience in restaurant management or food service operations significantly strengthens your application. Many SBA lenders specifically ask about industry experience when evaluating franchise loans.
For secured loans, lenders may require collateral such as equipment, personal real estate, or business assets. For SBA loans, personal guarantees are standard. If you lack traditional collateral, consider fast business loans with flexible collateral requirements as a bridge financing option.
Securing franchise financing is as much about preparation as it is about qualifications. The following strategies can dramatically improve both your approval odds and the loan terms you receive.
Lenders will request extensive documentation including 2-3 years of personal tax returns, bank statements, a personal financial statement, and copies of your franchise agreement. Having these ready before you apply saves weeks off your timeline.
Forming an LLC or corporation before applying for your franchise loan adds credibility to your application and may provide tax advantages. Many lenders prefer to lend to business entities rather than individuals.
Consider a blended financing approach: use an SBA 7(a) loan for the franchise fee, build-out, and working capital, while financing equipment separately through an equipment lender. This can reduce your primary loan amount and improve cash flow during the startup phase. See how similar franchise owners structure this approach in our Checkers franchise loan guide.
Having a signed Letter of Intent (LOI) or lease agreement for your chosen Charley's location significantly strengthens your loan application. Lenders want to know exactly where the business will operate before committing funds.
Beyond your equity injection, lenders want to see that you have enough cash reserves to survive the first 6-12 months of operation - even if sales are slower than projected. A 6-month reserve of operating expenses (approximately $30,000-$80,000 for most Charley's locations) is a solid baseline.
Lenders evaluate your ability to repay debt through your DSCR (Debt Service Coverage Ratio). A ratio of 1.25 or higher - meaning your projected income is 25% greater than your debt payments - is typically required. Understanding this metric before applying helps you right-size your loan request.
According to CNBC's small business coverage, franchise businesses that prepare comprehensive financial projections before approaching lenders close loans significantly faster than those who apply without detailed projections.
Crestmont Capital works with multiple lenders to find the best rate and terms for your Charley's Philly Steaks franchise. No obligation to proceed.
Compare Franchise Loan Options NowIn addition to traditional loans, Charley's franchise candidates have access to several alternative financing strategies worth considering.
If you have a 401(k) or IRA with substantial balances, a ROBS arrangement allows you to use those funds to invest in your franchise without early withdrawal penalties or taxes. While complex to set up, ROBS can provide significant upfront capital without creating debt service obligations.
Franchisees with substantial home equity may use a HELOC or home equity loan to fund part of their franchise investment. Rates are typically lower than business loans, though this approach does put your home at risk if the business underperforms.
Bringing in a business partner who contributes capital in exchange for equity ownership is another path to reducing your financing needs. Charley's allows multi-owner franchise arrangements, so this can be a viable option for those who want to share both the investment and the workload.
Charley's Philly Steaks maintains relationships with financial service partners who specialize in restaurant franchise financing. These lenders are familiar with the Charley's business model and FDD, which can simplify the underwriting process.
According to franchise lending data, franchise businesses are approved for SBA loans at higher rates than independent startups. Lenders view the established brand, operational systems, and training support that franchises provide as risk-mitigating factors. Charley's 30+ year track record makes it a particularly attractive franchise for lenders.
Before committing to a franchise loan, it is critical to understand the unit economics of a Charley's franchise - what you can realistically expect to earn and how long it will take to recoup your investment.
While Charley's does not publicly disclose detailed Item 19 financials for every location type, industry data suggests that mall-based fast casual units often generate annual revenues in the $600,000 to $1.2 million range. Strip center and freestanding locations may generate higher volumes depending on traffic and market size.
The quick-service restaurant industry operates on thin margins - typically 5-15% net profit after all costs. For a Charley's unit generating $800,000 in annual revenue, a 10% net margin would produce $80,000 in annual profit. This underscores the importance of right-sizing your debt service so that loan payments do not consume your entire margin.
Understanding your break-even point - the revenue level at which your income exactly covers all fixed and variable costs - is essential for financial planning. For most Charley's locations, break-even revenue falls between $400,000 and $700,000 annually, depending on rent, labor, and loan payments.
Crestmont Capital has helped hundreds of franchise owners secure the funding they need to open their doors. Our franchise loan specialists understand the unique requirements of restaurant franchises and can match you with the right lender for your specific situation.
Apply for Your Franchise Loan NowThe total initial investment to open a Charley's Philly Steaks franchise ranges from approximately $249,000 to $846,000, depending on location type, lease terms, and local construction costs. This includes the $29,500 franchise fee, leasehold improvements, equipment, initial inventory, working capital, and other startup costs. The wide range reflects the significant difference in costs between a small food court location versus a larger strip center or freestanding unit.
Can I get an SBA loan to open a Charley's Philly Steaks franchise?Yes, SBA loans are one of the most popular financing options for Charley's franchise candidates. The SBA 7(a) program allows qualified borrowers to borrow up to $5 million for franchise startup costs including the franchise fee, construction, equipment, and working capital. The SBA 504 program is an option if you plan to purchase real estate for a freestanding location. Most established franchise brands like Charley's are eligible for SBA franchise financing.
How much liquid capital do I need to qualify for a Charley's franchise?Charley's Philly Steaks requires prospective franchisees to have a minimum of $100,000 in liquid assets available at the time of application. Lenders typically want to see enough liquid capital to cover your equity injection (usually 10-20% of the total loan) plus several months of operating reserve. In practice, most successful franchise candidates have $150,000-$250,000 or more in liquid assets.
What credit score do I need to get a Charley's franchise loan?Most traditional lenders and SBA lenders require a minimum personal credit score of 650-680 for franchise financing. However, borrowers with scores above 720 will qualify for the best interest rates and terms. If your credit score is below 640, consider working with alternative lenders who specialize in challenged credit situations, or take steps to improve your score before applying.
How long does it take to get a franchise loan approved?Loan approval timelines vary by loan type and lender. Conventional business loans from alternative lenders can be approved and funded in as little as 3-7 business days. SBA loans typically take 30-90 days from application to funding, depending on the complexity of the transaction and the lender's pipeline. Preparing your documents in advance and working with an experienced franchise lender can significantly reduce processing time.
Does Charley's Philly Steaks offer in-house financing?Charley's Philly Steaks does not offer direct in-house financing to franchisees. However, they do maintain relationships with preferred lenders and financial service partners who specialize in restaurant franchise financing. These lenders are familiar with the Charley's FDD and investment structure, which can streamline the underwriting process compared to going directly to a traditional bank.
What documents do I need to apply for a Charley's franchise loan?Standard documents required for a franchise loan application include: 2-3 years of personal tax returns, 6 months of bank statements, a completed personal financial statement, a copy of the signed franchise agreement or FDD, a business plan with financial projections, a personal resume or biography, and a Letter of Intent or lease agreement for your chosen location. Some lenders may also request additional documentation such as personal and business credit reports.
Can I finance the Charley's franchise fee separately from other costs?Yes, it is possible to structure your financing to cover the franchise fee separately from other startup costs. However, most franchise lenders prefer to bundle all startup costs into a single loan for simplicity. The exception is equipment financing, which is commonly structured as a separate product due to the equipment serving as its own collateral. Discuss your financing structure preferences with your lender during the pre-qualification phase.
Is previous restaurant experience required to get a Charley's franchise loan?Previous restaurant experience is not always a hard requirement for loan approval, but it significantly strengthens your application. Lenders view relevant industry experience as a risk-mitigating factor. If you lack direct restaurant experience, you can compensate by hiring an experienced general manager, taking formal restaurant management courses, or completing Charley's training program before your loan closes.
What is the royalty fee for a Charley's Philly Steaks franchise?Charley's Philly Steaks charges a royalty fee of 6% of gross sales, paid weekly. In addition, franchisees contribute 2% of gross sales to the national marketing fund and approximately $400 per month in technology fees. When calculating your debt service coverage ratio for loan purposes, these ongoing fees must be factored into your cost structure as fixed operating expenses.
Can I open multiple Charley's Philly Steaks locations with one loan?Multi-unit franchise financing is available through several lenders, including through the SBA. If you plan to develop multiple Charley's units, a development agreement with the franchisor and a portfolio loan structure may be more efficient than applying for separate loans for each location. Discuss multi-unit financing options with Crestmont Capital for a customized financing plan.
What happens if my Charley's franchise underperforms and I cannot repay the loan?If your franchise business underperforms and you have difficulty repaying your loan, you have several options: loan modification or deferment with your lender, refinancing to extend terms and lower payments, selling the franchise unit, or negotiating directly with the lender. SBA-backed loans have specific workout procedures. The best strategy is to communicate proactively with your lender at the first sign of financial difficulty rather than waiting until payments are missed.
How does equipment financing work for a Charley's franchise?Equipment financing for a Charley's franchise works by using the equipment itself as collateral for the loan. You apply for a loan equal to the purchase price of the equipment (or a portion of it), the lender pays the vendor directly, and you repay the loan over 3-7 years with interest. Down payments range from 0-20% depending on your credit profile. At the end of the loan term, you own the equipment outright.
Are there any grants available for Charley's franchise financing?Traditional business grants for franchise startups are rare, but some options do exist. State and local economic development agencies occasionally offer grants or low-interest loans for job-creating businesses in specific locations or enterprise zones. If you are a veteran, woman, or minority business owner, targeted grant programs may be available through organizations like the SBA, SCORE, or local CDFIs. However, for most Charley's franchise candidates, loans are the primary financing vehicle.
How do I compare different franchise loan offers effectively?When comparing franchise loan offers, focus on the Annual Percentage Rate (APR) rather than just the stated interest rate, as APR includes all fees. Also compare: loan term length, prepayment penalties, origination fees, collateral requirements, personal guarantee requirements, and the lender's track record with franchise financing. Crestmont Capital provides a transparent comparison of all costs before you commit, making it easier to choose the right loan for your Charley's franchise.
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.