Arby’s Franchise Costs $645K – $2.4M (+ 2024 Profits)

Arby’s stands as a significant player in the quick-service restaurant (QSR) industry, recognized for its unique positioning and innovative approach to fast food. Founded in 1964, Arby’s has grown to become the second-largest sandwich restaurant brand in the world.

The brand, which is part of the Inspire Brands family, operates from its headquarters in Atlanta, Georgia, and is celebrated for its commitment to serving high-quality proteins alongside inventive and craveable sides, such as Curly Fries and Jamocha shakes. 

Arby’s differentiates itself through its Fast Crafted® restaurant services, blending the efficiency of quick-service with the quality and personalized care characteristic of fast-casual dining experiences.

Arby’s franchise opportunities offer a compelling investment for those looking to enter the QSR market. The brand’s franchise system benefits from its long-standing industry presence since 1965, capitalizing on proven operational efficiencies, a recognized brand name, and a menu that promises both quality and convenience.

Type of Expenditure	Amount (Free-Standing)	Amount (Non-Free-Standing)
Development Fee	$6,250 – $12,500	$6,250 – $12,500
License Fee	$0 – $37,500	$0 – $37,500
Lease Deposits and Payments	$12,000 – $50,000	$12,000 – $50,000
Site Costs	$0 – $451,000	$0 – $4,000
Landscaping	$0 – $45,000	N/A
Equipment	$753,000 – $1,615,000	$536,000 – $1,030,000
Opening Inventory	$18,000 – $26,000	$18,000 – $26,000
Insurance	$8,400 – $14,400	$8,400 – $14,400
Working Capital / Additional Funds	$33,000 – $100,000	$33,000 – $100,000
Rent (one month)	$4,000 – $10,000	$4,000 – $10,000
Business Licenses, Health Permits, Utilities Deposits	$1,000 – $25,000	$1,000 – $25,000
Total Pre-Opening / Operating Deposits	$85,700 – $216,600	$85,700 – $216,600
Total Estimated Initial Investment	$861,950 – $2,451,000	$644,950 – $1,324,000

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Initial Franchise Fee

Under the standard conditions, the initial franchise fee is set at $37,500. This fee must be paid no later than ten days after receiving a written notice from Arby’s if certain conditions are not met, such as failing to comply with the New Restaurant Opening (NRO) incentive program.

Royalty Fee

• Traditional Restaurants: 4% of Gross Sales, subject to applicable incentives.
• Non-Traditional Restaurants: 6.2% of Gross Sales, subject to applicable incentives. The Royalty Fee is payable monthly on or before the 10th day of the following month.

Advertising and Marketing Service Fee

For Traditional Restaurants, there is a minimum aggregate expenditure of 4.2% of Gross Sales, including this fee, Local Market Advertising, and Local Cooperative Area Advertising, subject to applicable incentives. For Non-Traditional Restaurants, the fee currently ranges from 2.22% to 4% of Gross Sales.

Renewal Fees

The renewal fee is 10% of the then-applicable standard initial franchise fee for Traditional Restaurants, payable upon submission of an application for a new franchise, at least 180 days before the expiration date of the current Franchise Agreement.

Transfer Fee

There is a fee of $17,500 for the transfer of the first Arby’s Restaurant; $2,500 if the transferee is already a party or holds a 50% interest in a party to at least one existing Arby’s agreement. The fee is due upon submission of a request for approval.

Franchise Pros and cons

Operating an Arby’s franchise, just like any other business, has its advantages and disadvantages.

Pros

• Fast-growing brand: Arby’s brand has grown rapidly in recent years. It was able to open new stores even during the COVID-19 pandemic. Being a vibrant brand, it gives new franchisees an opportunity to establish themselves in potentially profitable locations.
• Wide menu selection: Arby’s is well known for its giant stacks of roast beef on soft buns. In addition, they have expanded their menu to include other delicious foods like deli-inspired sandwiches and complementary side items and desserts. Customers can choose from a wide variety and have a reason to keep coming back for more.
• Eye-catching design: Arby’s constructs its restaurants in an appealing pinnacle design that portrays its famous architectural design. The luxurious designs can fit into any prime location, preserving Arby’s tradition and appealing to its customers in any market location.
• Different franchise models: Arby’s offers investors multiple models to choose from. A franchisee can choose the traditional franchise model, which is either freestanding with full customer service, convenience stores, or a full menu. Secondly, there is the non-traditional model, which means a limited menu, limited size, limited customer service, no or limited seating, reduced services, and reduced space.
• Solid training and support: As a new franchisee, you need maximum support to learn the tricks of the market. Arby’s offers would-be franchisees the necessary training and on-the-job support to grow their business, whether they have prior experience or not.
• Proven operation model: Arby’s brand and culture have been in operation for a long time. They have perfected the culture of serving their customers delicious beef sandwiches with simplicity and affordability. They introduce to new franchisees Arby’s buying, storage, training, and management processes that have worked.

Cons:

• Competition: One of the drawbacks of operating an Arby’s franchise is that it faces stiff competition from established brands such as Subway. As a new franchisee, you may record low sales and high advertising costs to stay competitive.
• No financing: The Arby’s franchise does not offer financing to new franchisees. This leaves franchisees with limited financing options. Also, Arby’s does not guarantee a franchisee’s note, lease, or obligation. One can only opt for an SBA loan to fund their investment or expand to multiple units.
• No territory protection: Arby’s does not provide exclusive territory protection. It may only offer a specific and limited protected area to a selected traditional franchise restaurant under certain terms and conditions. This leaves room for Arby’s to grant other competing franchises permission to operate businesses in a territory occupied by its non-traditional franchisees.

How to open

Opening a Arby’s franchise involves several steps, designed to ensure you are a good fit for the franchise. Here are the main steps to follow to open a Arby’s franchise.

1. Reaching Out

• Begin by expressing your interest in the Arby’s franchise by filling out a contact form on the official franchising website.
• This initial step is crucial for establishing a line of communication with Arby’s franchising team.

2. Reading the Franchise Disclosure Document (FDD)

• Spend time reviewing Arby’s FDD for a comprehensive understanding of the franchise opportunity.
• The FDD provides in-depth information about the financial investment, contractual obligations, and what to expect as an Arby’s franchisee.

3. Speaking with Existing Arby’s Franchisees

• Engage with current Arby’s franchise owners to gain insights from their experiences.
• This step allows you to understand the operational realities, challenges, and rewards of owning an Arby’s franchise.

4. Real Estate and Location Selection

• Work with Arby’s real estate team to identify and secure the ideal location for your franchise, considering factors like demographics and visibility.
• The right location is a critical factor in the success of your restaurant.

5. Construction and Design

• Collaborate with Arby’s on the design and construction of your restaurant, ensuring it meets brand standards and local requirements.
• This phase involves selecting contractors, ordering equipment, and overseeing the build-out process.

6. Training and Preparation

• Participate in a comprehensive training program, which includes a combination of classroom instruction, online learning, and hands-on management training.
• This training ensures you and your staff are fully prepared to deliver the Arby’s experience.

Disclaimer

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

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