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The Arby’s Franchise Cost: How Much Does It Take to Own Your Own Arby’s?
Arby’s restaurants are famous for serving up roast beef sandwiches and curly fries, but there’s a lot more to this fast food chain than meets the eye. With over 30 years of experience, Arby’s has become an American icon, with franchises in all 50 states and nearly 30 countries worldwide. Whether you want to own your own business or get in on a booming industry, buying an Arby’s franchise can be an excellent choice. But what does it take to run your own Arby’s franchise? Plus, know the real Arby’s franchise cost below!
Franchise Description
Franchising with Arby’s gives you the chance to own and operate your own business while benefiting from the company’s strong brand recognition and reputation. It is under two parent companies which are Arby’s Restaurant Group, Inc. and Inspire Brands, Inc. They offer two franchise types:
- Traditional – your choice of freestanding buildings, convenience stores, and truck stops typically with drive-through windows
- Non-traditional – has limited menu, size, and reduced service restaurants which may be located on airports, hospitals, toll plazas, parks, and many similar venues
Training Overview
New franchisees are required to take part in Arby’s New Franchisee Orientation (NFO) which is an overview of the company’s system. They need to employ a total of six managers who have completed and are certified in Arby’s Restaurant Management Training Program (MTP).
Territory Granted
As a franchisee, you will be responsible for running a single restaurant at an approved location. The franchisor may, at their discretion, allow you to have a limited protected area surrounding your restaurant. For the duration of the License Agreement, the franchisor agrees not to operate or license any other Arby’s restaurants that would sell deli sandwiches to consumers within your protected area, if applicable.
Obligations and Restrictions
When you become a franchisee, you’re making a commitment to uphold the standards of the brand. That means adhering to certain obligations and restrictions, including those related to advertising, product offerings, and site selection. Of course, these requirements vary from franchise to franchise, so be sure to do your research before signing on the dotted line. You’ll also need to provide evidence that you have the financial resources necessary for operating your restaurant.
Term of Agreement and Renewal
The term of the franchise agreement is 20 years, with an automatic renewal for an additional 20 years if certain conditions are met. The initial franchise fee is $30,000, with a continuing monthly royalty fee of 4% of gross sales for traditional restaurants and 6.2% of gross sales for non-traditional restaurants. Additionally, there is a 4.2% advertising fund contribution required. The estimated initial investment necessary to begin operation of an Arby’s restaurant ranges from $1 to $2 million.
Did You Know?
Get to know more about Arby’s with these fun facts:
- Arby’s was founded in Boardman, Ohio in 1964 by Forrest and Leroy Raffel.
- The name Arby’s is derived from the initials R.B. of the Raffel Brothers.
- Arby’s is the second largest quick-service sandwich chain in the U.S. with more than 3,000 restaurants nationwide.
Arby’s Franchise Cost
Read more below Arby’s franchise cost:
| Name of Fee | Low | High |
|---|---|---|
| Development Fee | $6,250 | $12,500 |
| License Fee | $0 | $37,500 |
| Travel and Living Expenses while Training | $5,000 | $23,400 |
| Real Property/Occupancy Charge | Varies | |
| Site Costs | $0 | $451,000 |
| Landscaping | $0 | $63,000 |
| Civil & Architectural Drawings/ Professional Fees | $6,000 | $219,000 |
| Zoning/Permitting Costs | $2,000 | $112,000 |
| Building Costs | $236,000 | $731,000 |
| Equipment | $200,000 | $262,000 |
| Computer Hardware and Software/POS System | $40,000 | $55,000 |
| Décor Package | $27,000 | $45,000 |
| Signage & Drive Thru | $25,000 | $88,000 |
| Pre-Opening Wages | $21,300 | $41,200 |
| Opening Inventory | $18,000 | $26,000 |
| Insurance | $8,400 | $14,400 |
| 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 (excluding real estate purchase/lease) | $628,950 | $2,306,000 |
Other Costs
| Type of Fee | Amount |
|---|---|
| Royalty | 4% of gross sales for traditional restaurants and 6.2% of gross sales for non-traditional restaurants |
| Advertising Marketing Service Fee | Currently a minimum aggregate expenditure of 4.2% of gross sales comprised of this fee, local market advertising, and local cooperative area advertising (if applicable) for traditional restaurants. Payment made from the royalty for non- traditional restaurants. |
| Renewal Fees | 10% of then applicable standard initial license fee (excluding discounts, promotions and incentive programs) for traditional restaurants, and then applicable non-traditional restaurant initial license fee for non-traditional restaurants. |
| 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. |
| MTP Learning Path Program Fee | $2,100 per attendee, but 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. |
| Learning Management System Fee | Currently $59.22 plus tax per year for each Arby’s restaurant in the franchisee’s portfolio, but may change depending on number of restaurants participating. |
| Additional Training | The fee ranges from $0 to $2,100. Franchisees pay for their trainees’ expenses. |
| Arby’s Order Ahead Platform Service Fee | Monthly fee is $25 (currently waived). Current per transaction fee is 2% of gross sales on each order placed on the platform. |
| Audits | The franchisor’s audit expenses, plus interest. |
| 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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