Arby’s Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$645,000

-

$2,451,000

OPERATING PROFIT

Unlock

Emily

Updated

January 30, 2024

Is

Arby’s

a franchise?

Yes,
Arby’s
is a franchise and
currently
accepts
franchise
applications

Arby's was founded in 1964 and has since grown into the second-largest sandwich restaurant brand in the world, with a presence across eight countries. The company is headquartered in Atlanta, Georgia, and began franchising just a year after its inception, in 1965.

Arby's distinguishes itself in the competitive quick-service restaurant (QSR) sector with its unique Fast Crafted® menu, featuring a variety of high-quality, deli-inspired sandwiches, alongside complementary sides and desserts. This focus on quality and variety at an affordable price point, combined with the convenience and speed that customers demand, sets Arby's apart from other sandwich chains.

Furthermore, Arby's is part of the Inspire Brands family, which is the second-largest restaurant company in the US. This affiliation provides Arby's franchisees with significant competitive advantages, including superior support and unmatched purchasing power from the very beginning of their franchise journey.

How many

Arby’s

franchises

are there?

In 2022, there were
3407
outlets in the United States, of which
2291
are franchises, and
1116
are corporate-owned.

What are the

Arby’s

franchise

fees?

Initial franchise fee

$37,500

Royalty fee

4.0%

Advertising fee

4.2%

Initial Franchise Fee ($37,500 for Standard Traditional Restaurant, $18,750 for Non-Traditional Restaurant)

The initial franchise fee for a standard Traditional Restaurant is $37,500, and for a Non-Traditional Restaurant, it is $18,750. This fee is payable in full upon signing the License Agreement and is not refundable under any circumstances.

Royalty Fee (4.0% of Gross Sales)

Franchisees are required to pay a monthly royalty fee equal to 4.0% of the prior month's Gross Sales for each Restaurant franchised under the agreement.

Advertising (Combined Minimum 4.2% of Gross Sales)

The Franchise Agreement states that franchisees are required to spend a combined minimum of 4.2% of Gross Sales on advertising. This includes Local Market Advertising, and Local Cooperative Area Advertising for Traditional Restaurants.

Rent (Varies)

The rent is variable and is agreed upon in the lease agreement if the property is leased from Arby's.

Training Fees ($2,100 per attendee for additional managers)

Arby's does not charge any training fee for training 3 managers in your first Restaurant and one manager in your second Restaurant. However, you must pay a training fee of $2,100 per attendee for each additional manager.

Transfer Fee (10% of then applicable standard initial license fee for Traditional Restaurants)

Upon the sale of a franchise or other transfer, a transfer fee is applicable. This fee is 10% of the then applicable standard initial license fee for Traditional Restaurants.

How much does

it cost

to start a

Arby’s

franchise?

It costs between
$645,000
and
$2,451,000
to start a
Arby’s
franchise.

The total estimated initial investment for a traditional Free-Standing Arby's Restaurant ranges from $861,950 to $2,451,000, while for a Non-Free-Standing Arby's Restaurant, it ranges from $644,950 to $1,324,000.

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.

Does

Arby’s

provide

training

to its

franchisees?

Yes,
Arby’s
provides training to its franchisees.

Arby's has a structured training program in place to ensure that franchisees are well-prepared to operate their franchises effectively. Here's a breakdown of the training process:

Before diving into the operational aspects, each new franchisee, or an approved owner if the franchisee is a corporation or other business entity, must participate in the New Franchisee Orientation (NFO).

The NFO is a brief overview of the Arby’s Restaurant system and the administrative corporate support provided by Arby's. This orientation is typically conducted each quarter at the Arby’s Support Center, although the frequency can vary based on demand.

Following the orientation, franchisees move on to the more intensive Arby’s Restaurant Management Training Program (MTP), which is conducted in one of the Nationally Certified Training Restaurants (NCTR) located across the country.

This 7-week operational training program is designed to equip the franchisees and their teams with the necessary skills and knowledge to run the restaurant efficiently.

Does

Arby’s

provides

territory

protection?

Franchisees are granted the right to operate an Arby’s Restaurant within a defined area referred to as the "Protected Area." Within this Protected Area, they are obligated to develop and operate the Franchised Restaurants. However, while there are some territorial rights associated with the Protected Area, these rights do not guarantee exclusivity.

Specifically, franchisees may face competition from other franchisees or other channels of distribution in the future. The License Agreement does not provide options, rights of first refusal, or similar rights to acquire additional franchises within the Protected Area or contiguous areas.

Furthermore, continuation of territorial rights under the License Agreement does not depend on achieving a certain sales volume, market penetration, or other contingency.

Can a

Arby’s

franchise

be run as

a passive

investment?

Arby's does not require the franchisee to participate in the direct operation of the Restaurant, although it is recommended.

However, for each of the first and second Restaurants, the franchisee must employ three managers (six in total) who have completed and are certified in the Arby’s Management Training Program (MTP), or a comparable training program approved by Arby's.

One of these individuals can be the franchisee if they will be participating in the direct operation of the Restaurant. For the third and subsequent Restaurants, the franchisee must employ one manager per Restaurant who has completed and is certified in MTP.

There is no requirement for managers to have any equity interest or ownership in the franchisee entity or the Restaurant.

Related Posts