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Arby's Franchise ProfileRestaurant Franchises > Quick-Service Restaurants |
Initial Investment Overview for Arby's Franchise
To open an Arby's franchise, you'll need to prepare for a significant financial commitment. The initial investment ranges from approximately $644,950 to $2,451,000, which includes the franchise fee of $37,500. Additionally, you'll need to consider cash requirements between $861,950 and $2,451,000, along with a net worth requirement ranging from $100,000 to $1,000,000. Understanding these costs is crucial for aspiring franchisees to ensure they meet the financial criteria for successful ownership.
Revenue Potential of Arby's Franchise
Arby's franchises have the potential for robust financial performance. The average annual revenue per unit stands at about $1,321,907, with a median revenue of $1,257,204. However, performance can vary significantly, with the lowest annual revenue recorded at $301,126 and the highest at $4,229,701. This range highlights the importance of location, management, and market conditions in determining a franchise's success.
Operational Insights and Expenses
Running an Arby's franchise involves various operational expenses that franchisees should be aware of. Average annual costs include rent between $48,000 and $120,000, utilities ranging from $12,000 to $30,000, and insurance costs of $8,400 to $14,400. Marketing and advertising can add another $60,000 to $100,000 to your budget, while management and administrative salaries may range from $90,000 to $150,000. Overall, total annual expenses can vary between $243,400 and $464,400, impacting profitability.
Growth and Expansion of Arby's Franchise
Arby's has shown steady growth in its franchise network over recent years. As of 2023, the total number of franchised units reached 2,316, up from 2,173 in 2021. This growth indicates a strong brand presence and market demand. Additionally, the breakeven time for new units is approximately 12 months, with an investment payback period of around 24 months, making it an attractive option for those looking to enter the fast-food franchise sector.
Arby's Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Arby's Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 3289 | 3401 | 3413 |
| Net Change YoY | 112 | 12 | |
| Franchised Units | 2173 | 2291 | 2316 |
| Net Change YoY | 118 | 25 | |
| Corporate Units | 1116 | 1110 | 1097 |
| Net Change YoY | -6 | -13 |
Franchise Overview
Arby’s is a well-established quick-service restaurant chain known for its unique offering of roast beef sandwiches and a diverse menu that includes deli-style sandwiches, salads, and sides. Founded in 1964, Arby’s has grown to become a significant player in the fast-food industry, with a commitment to quality ingredients and innovative menu items. The brand's focus on "We Have the Meats" highlights its dedication to providing hearty, protein-rich meals for customers.
Investment Details
Starting an Arby’s franchise requires a substantial investment, with initial costs ranging from $644,950 to $2,451,000. The initial franchise fee is set at $37,500. Franchisees should also be prepared for ongoing royalty fees of 4% of gross sales and a marketing contribution of 2.22%. A cash requirement between $861,950 and $2,451,000 is necessary, along with a net worth requirement ranging from $100,000 to $1,000,000.
Financial Performance
On average, Arby’s units generate annual revenues of approximately $1,321,907, with a median revenue of $1,257,204. The revenue range varies significantly, with some units reporting as low as $301,126 and others as high as $4,229,701. Franchisees can expect a breakeven period of around 12 months, with an investment payback period of approximately 24 months, making it a potentially lucrative opportunity for investors.
Operational Costs
Running an Arby’s franchise involves various operational expenses, which typically range from $243,400 to $464,400 annually. Key costs include rent (between $48,000 and $120,000), utilities ($12,000 to $30,000), insurance ($8,400 to $14,400), and marketing expenses ($60,000 to $100,000). Management and administrative salaries can range from $90,000 to $150,000, with miscellaneous expenses adding to the overall operational budget.
Franchise Growth
Arby’s has shown steady growth in its franchised units, increasing from 2,173 units in 2021 to 2,316 units in 2023. The overall total units, including corporate locations, have also grown, indicating a strong demand for the brand. This expansion reflects Arby’s strategic focus on enhancing its market presence and providing franchisees with opportunities for growth in various regions.
Support and Training
Franchisees receive comprehensive support and training from Arby’s corporate team, which is essential for success in the competitive fast-food landscape. This includes assistance with site selection, operational training, marketing strategies, and ongoing business management. The support structure is designed to equip franchisees with the tools necessary to effectively run their restaurants and maximize profitability.
Frequently Asked Questions
The initial investment for an Arby's franchise ranges from $644,950 to $2,451,000. This amount includes the franchise fee, equipment, and other startup costs necessary to launch the business.