Do you want to start a restaurant business by buying Arby franchise? If YES, here is how much it cost to open a Arby franchise and the requirement.
Arby’s restaurant was founded in Boardman, Ohio, on July 23, 1964, by Forrest and Leroy Raffel. These business partners, who previously owned a restaurant equipment business, saw the emergence of the fast food niche and thought it would be a good idea to open a fast food restaurant that offers foods that are not hamburger.
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Franchising at Arby’s Restaurant
Arby’s restaurant started franchising in 1965, and since then their franchises have been growing continually. The restaurant offers various franchises that entrepreneurs can choose from if they want to do business with the company.
The two franchise offerings in Arby’s Restaurant include:
- Traditional franchise: this franchise offering means that the franchisees will open a 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 franchise: this franchise offering means that the owner will offer limited menu, limited size and reduced services. The restaurant which generally occupies 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.
How Much It Cost to Open an Arby’s Franchise
The initial license fee for an Arby’s restaurant is $37,500 for the first franchise unit and $25,000 for each subsequent unit.
The estimated initial investment for an Arby’s restaurant ranges from $336,500 to $927,900 for a lease situation, and from $750,700 to $2,474,400 for a land and building purchase situation (based on an initial license fee of $37,500 for the first unit).
- Royalty Fee – 4% of gross sales.
- Advertising – 1.2% of gross sales for participation in our franchisee-owned marketing association and national advertising; at least 3% of gross sales for local store marketing.
- 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. Payments are usually 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.
- 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 $1,700. Franchisees pay for their trainees’ expenses.
- Audits: The franchisor’s audit expenses, plus interest.
- 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.
- Indemnity: Will vary under circumstances.
- Insurance: Insurance Carrier sets the premium
Steps on How to Open an Arby’s Franchise Restaurant
To be able to be a part of this team, Arby’s is looking out for certain qualities. First, and foremost, they are looking for candidates with a real passion for the brand, as well as experience in the restaurant industry. For a candidate to qualify, he or she must have a minimum of $500,000 in liquidity per restaurant, and $1 million net worth per restaurant.
The restaurant management is also looking out for minimum commitment of three restaurants per development agreement. Finally, they are looking for franchisees that are ready to make their customers smile as they serve them food. The full modalities of opening an Arby’s franchise would be given to you when you contact them via their website.
What You Must Know About Arby’s Franchise
In addition to its classic Roast Beef and Beef ‘n Cheddar sandwiches, Arby’s products also include deli-style Market Fresh line of sandwiches, Greek gyros, Curly Fries and Jamocha Shakes.
Arby’s has its headquarters at Sandy Springs, Georgia, a suburb of Atlanta. They have international locations in five countries outside the United States: Canada, Turkey, Qatar, Kuwait, and United Arab Emirates. As of 2017, Arby’s was named the second largest sandwich chain after Subway.
In 2019, there were 3,472 restaurants. There are locations in five countries outside the United States: Canada, Turkey, and Qatar. Arby’s is owned by Inspire Brands, the renamed Arby’s Restaurant Group, Inc. (ARG). ARG was renamed as the company took over ownership of Buffalo Wild Wings on February 5, 2018.