Arby’s Franchise Cost & Fees

Arby’s is the second-largest sandwich restaurant brand in the world with more than 3,400 restaurants in eight countries.

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Description

Success in life isn’t an accident. It’s a choice- a decision to desire more than average and do whatever it takes to attain it. To take the opportunity to achieve something different and better than what’s merely presented to you.

At Arby’s, we know this too. That’s why we have unique, cut-above selections, from our thinly sliced roast beef to our delicious Market Fresh® line of sandwiches, salads, and wraps. It’s also why we continue to be food innovators in the quick-service industry, offering customers unique menu selections, a welcoming dining atmosphere, and an overall experience that is authentic, exceptional, and real.

 

Year Business Began: 1964

Franchising Since: 1965

Headquarters: Atlanta, Georgia

Estimated Number of Units: 3,345

Franchise Description: The franchisor is Arby’s Franchisor, LLC. Franchisees operate a restaurant under the name Arby’s and featuring a variety of Arby’s deli inspired sandwiches and complementary side items and desserts. There are two franchise offerings:Traditional: full-menu, limited service Arby’s Restaurants, which are either freestanding, convenience stores, travel plazas, truck stops, travel plaza/convenience store combos, end cap and inline locations, and malls. Non-traditional: limited menu, limited size and reduced service restaurants, which generally occupy a smaller retail space, offers no or very limited seating and may cater to a captive audience, may have a limited menu and may possibly feature reduced services, labor, storage and different hours of operation. Non-Traditional Arby’s Restaurant categories include but are not limited to locations in airports, military bases, hospitals, toll plazas, stadiums, theme/amusement parks and arenas which have no seating or shared seating, casinos, colleges, universities, and other institutional type facilities which have common area seating.Training Overview: If franchisees are new, the franchisor requires them to participate in New Franchisee Orientation (NFO). If franchisees are a partnership or corporation, then the franchisor requires that a partner or approved shareholder participate in the NFO. The NFO is a brief overview of the Arby’s system and the administrative corporate support provided. For the first and second Restaurants, franchisees must at all times employ three managers (six total) who have completed (to Arby’s satisfaction) and are certified in the Arby’s Restaurant Management Training Program (MTP), or a comparable training program approved by the franchisor in its sole judgment. One of these people may be the franchisee, if he/she will be participating in the direct operation of the Licensed Business.

The current MTP runs for seven weeks at a Nationally Certified Training Restaurant. In addition to the NFO and the MTP, the franchisor utilizes the Revitalization Roadmap to ensure successful executions for new Restaurants openings, for the first and second Restaurants opened by a franchisee. For the first Restaurant opened, the training includes the services of two people to assist with the needed pre-opening and post-opening crew training at the Licensed Premises for 10 calendar days. For the second Restaurant opened, the training includes the services of one person to assist with the needed pre-opening and post-opening crew training at the Licensed Premises for six calendar days. The franchisor reserves the right, in its sole judgment, to specify additional training requirements, including, but not limited to, supplemental or refresher training programs for franchisees, their managers and/or employees.Territory Granted: Each License Agreement will authorize franchisees to operate one Arby’s Restaurant at a specified location referred to as the “Licensed Premises.” The franchisor may, in its sole judgment, grant franchisees a specific and limited protected area surrounding the Restaurant. The franchisor will not operate or license others to operate an Arby’s Restaurant within the Protected Area, if any, during the term of the License Agreement using the licensed Trademarks and offering deli inspired sandwiches for sale to consumers. If the Restaurant is a free-standing structure and the franchisor grants a Protected Area, it will typically delineate the Protected Area by a 1-mile radius (excluding malls, college, and university campus locations and other similar institutional type facilities, toll plazas, military bases, hospitals, theme/amusement parks, airports, casinos, special location activity centers such as sports arenas and sovereign nations) from the location or by boundary streets or highways. Outside of any Protected Area, if any, franchisees may face competition from other franchisees, from Arby’s Restaurants that the franchisor owns, or from other channels of distribution or competitive brands that it controls. Each Non-Traditional Arby’s Restaurant License Agreement will authorize the franchisee to operate one Arby’s Restaurant at the Licensed Premises. The franchisee will not receive a Protected Area that extends beyond the Licensed Premises for Non-Traditional Restaurants.

Obligations and Restrictions: Franchisees must at all times faithfully, honestly, and diligently perform their obligations under the Arby’s License Agreement, continuously exert their best efforts to promote and enhance the Arby’s restaurant, and not engage in any other business or activity that conflicts with their obligations to operate the Arby’s restaurant in compliance with the Arby’s License Agreement. Franchisees may only sell those food and non-alcoholic beverage products designated in the Manual as being included in the standard Arby’s menu and meeting the quality standards (including product specifications and sources, cleanliness and sanitation, customer service and hours of operation) in the Manual or as otherwise designated in writing.Term of Agreement and Renewal: The length of the initial franchise term for a traditional restaurant is up to 20 years, but may be less if the franchisee’s lease is shorter than 20 years or the franchisee purchased an existing company-owned Restaurant and the franchisor does not own the property; or purchases an existing franchisee’s Restaurant, in which case, the franchisee will either receive the balance of the term under the existing agreement or a 20-year term. For non-traditional restaurants, the initial term is equal to the shorter of 10 years or the term of the lease with the applicable airport authority, stadium or arena, or length of the lease for the Licensed Premises. If franchisees are in good standing and meet approval criteria, they may receive a new License Agreement (which may have materially different terms and conditions than your previous License Agreement).Financial Assistance: The franchisor has an agreement with PNC Equipment Finance, LLC (PNC) relating to financing that PNC will provide to qualified franchisees who are remodeling their Arby’s Restaurants. PNC is not the franchisor’s affiliate and neither the franchisor nor its affiliates receives any payment or other consideration for placing financing with PNC. Except as described, the franchisor and its affiliates do not offer direct or indirect financing for a franchisee’s Arby’s business, and it does not guaranty a franchisee’s note, lease, or any other obligation. Investment Tables: Estimated Initial Investment Name of Fee Low High Development Fee $6,250 $12,500 License Fee $0 $37,500 Travel and Living Expenses while Training $5,000 $23,000 Real Property/Occupancy Charge Varies Site Costs $1,000 $200,000 Landscaping $0 $41,000 Civil & Architectural Drawings/ Professional Fees $5,000 $73,000 Zoning/Permitting Costs$1,000$85,000 Building Costs $1,000 $755,000 Equipment $152,000 $234,000 Computer Hardware and Software/POS System $20,000 $50,000 Décor Package $34,000 $65,000 Signage & Drive Thru $9,000 $64,000 Pre-Opening Wages $21,300 $41,200 Opening Inventory $18,000 $26,000 Insurance $7,000 $12,000 Working Capital/Additional Funds $33,000 $100,000 Lease Deposits and Payments Variable Business Licenses, Health Permits, Utilities Deposits $1,000 $25,000 ESTIMATED TOTAL $314,550 $1,844,200 Other Fees for a Traditional Arby’s Restaurant Type of Fee Amount Royalty 4% of total gross sales. Advertising Marketing Service Fee A percentage of monthly Gross Sales, with a current minimum of 4.2% aggregate including this fee, Local Advertising, and Cooperative Advertising (if applicable). Local Market Advertising A percentage of monthly Gross Sales, with a current minimum of 4.2% aggregate including this fee, the Advertising and Marketing Service Fee, and Cooperative Advertising (if applicable). Local Cooperative Area Advertising A percentage of monthly Gross Sales, with a current minimum of 4.2% aggregate including this fee, the Advertising and Marketing Service Fee, and Local Advertising. Membership in ARCOP, Inc. Upcharge on key food items (currently cases of French fry products, roast beef, and some frozen bread). Renewal Fees 10% of the then applicable standard license fee (excluding the impact of any discounts or promotions, including any development incentive programs that may be available). Transfer Fee (Ownership) $17,500 for transfer of first Arby’s restaurant; $2,500 if franchisee is already a 50% owner of at least one existing License Agreement. Training Fee $1,700 per attendee. However, there is no training fee for three managers in the first Restaurant, and for one manager in the second Restaurant. Franchisees pay the training fee for all their other attendees, and they pay their trainees’ expenses. Additional Training The fee ranges from $0 to $1,700. Franchisees pay for their trainees’ expenses. Audits Interest on the deficiency. If deficiency is more than 3% of actual Gross Sales, franchisee must pay interest plus audit expenses. Testing of Samples for Approval Cost of samples. Approval of Suppliers Costs and expenses incurred, which may range from $2,500 to $10,000 Interest Up to the highest rate permitted by the law of the State in which the licensed business is located or the laws of the State of Georgia, whichever is higher, but in no event to exceed 18% per year. Costs and Attorney Fees Will vary under circumstances. Taxes, Assessments, Penalties, Interests and Additional Charges As assessed. Indemnity Will vary under circumstances. Insurance Insurance Carrier sets the premium The above information has been compiled from the FDD of Arby’s. Year of FDD: 2018Franchise Direct’s Disclaimer

 

Other Fees for a Traditional Arby’s Restaurant
Type of Fee Amount
Royalty 4% of total gross sales.
Advertising Marketing Service Fee A percentage of monthly Gross Sales, with a current minimum of 4.2% aggregate including this fee, Local Advertising, and Cooperative Advertising (if applicable).
Local Market Advertising A percentage of monthly Gross Sales, with a current minimum of 4.2% aggregate including this fee, the Advertising and Marketing Service Fee, and Cooperative Advertising (if applicable).
Local Cooperative Area Advertising A percentage of monthly Gross Sales, with a current minimum of 4.2% aggregate including this fee, the Advertising and Marketing Service Fee, and Local Advertising.
Membership in ARCOP, Inc. Upcharge on key food items (currently cases of French fry products, roast beef, and some frozen bread).
Renewal Fees 10% of the then applicable standard license fee (excluding the impact of any discounts or promotions, including any development incentive programs that may be available).
Transfer Fee (Ownership) $17,500 for transfer of first Arby’s restaurant; $2,500 if franchisee is already a 50% owner of at least one existing License Agreement.
Training Fee $1,700 per attendee. However, there is no training fee for three managers in the first Restaurant, and for one manager in the second Restaurant. Franchisees pay the training fee for all their other attendees, and they pay their trainees’ expenses.
Additional Training The fee ranges from $0 to $1,700. Franchisees pay for their trainees’ expenses.
Audits Interest on the deficiency. If deficiency is more than 3% of actual Gross Sales, franchisee must pay interest plus audit expenses.
Testing of Samples for Approval Cost of samples.
Approval of Suppliers Costs and expenses incurred, which may range from $2,500 to $10,000
Interest Up to the highest rate permitted by the law of the State in which the licensed business is located or the laws of the State of Georgia, whichever is higher, but in no event to exceed 18% per year.
Costs and Attorney Fees Will vary under circumstances.
Taxes, Assessments, Penalties, Interests and Additional Charges As assessed.
Indemnity Will vary under circumstances.
Insurance Insurance Carrier sets the premium

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