Arby's
Date of Incorporation: 1964
Franchising Since: 1965
Headquarters: Atlanta, Georgia
Country: U.S.
Description: Arby's restaurants are full-menu/service restaurants offering a variety of Arby's signature roast beef sandwiches and other items such as the unique Market Fresh deli-style sandwiches, roast chicken, roast turkey, specialty sandwiches, chicken sandwiches, chicken fingers, super-stuffed potatoes, potato cakes, salad, dessert, shakes and other food, and non-alcoholic beverage products.
Franchise Offer: There are two franchise offerings:
- Traditional Full service/Full menu Restaurant which is either free-standing or situated within malls, convenience stores and truck stops that occupy at least 1600sq feet
- Non-traditional Arby's Restaurant which has a limited menu, limited size and limited service. Categories include locations in:
- Airports, stadiums and arenas which have no seating or shared seating
- Casinos, colleges and universities which have common area seating.
- Convenience stores and truck stops with less than 1,600sq feet of restaurant space and 0 to 28 seats.
Financial Assistance: The franchisor and their affiliates do not offer direct or indirect financing for the franchisee’s Arby's business. The franchisor does not guaranty the franchisee’s note, lease, or any other obligation. The franchisor does not receive any payments from any third-party financing institutions to which franchisees might be referred for potential financing assistance.
Training and Assistance: If the franchisee is new, the franchisor requires him or her to participate in the New Franchisee Orientation Program (NFOP). The NFOP is a day-long orientation program. There is no cost for the program; however, the franchisee will pay his or her own travel, meal, and lodging expenses. For the franchisee’s first and second Restaurants, he or she 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). The current MTP runs for seven weeks at a Nationally Certified Training Restaurant.
Territory: If the franchisee wishes to open one or more Restaurants, he or she must sign a Development Agreement before signing a License Agreement. This Agreement gives the franchisee the right during the term of the Development Agreement to open one or more new Arby's Restaurants within the geographical area specified in the Development Agreement. The exclusive territory is generally defined by a radius encompassing a specific trade area or governmental boundaries (streets, city, county).
Term of Agreement and Renewal: The term of the franchise is 20 years, with an option to receive a new license agreement for a term of 20 years, if the franchisee is in good standing and meets the franchisor’s approval criteria.
Obligations and Restrictions: There is no requirement for franchisees to have any interest or ownership in the licensed business. The franchisee 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.
Total Number of Units: Approximately 3,718 units.
Investment Tables:
Initial Investment:
Traditional Arby's Restaurant.
Standard Costs (applicable to both leased and purchased sites)
| Name of Fee | Low | High |
|---|---|---|
| Initial License Fee | $1,000 | $37,500 |
| Travel and Living Expenses while Training | $4,000 | $19,000 |
| Site Development Costs | $10,000 | $265,000 |
| Miscellaneous Opening Costs | $5,000 | $25,000 |
| Opening Inventory | $10,000 | $20,000 |
| Management Pre-Opening Salary | $10,000 | $20,000 |
| Additional Funds (3 Months) | $104,000 | $158,000 |
| Total | $144,000 | $544,500 |
Leased Site Costs:
| Name of Fee | Low | High |
|---|---|---|
| Equipment, Decor and Sign Package | $135,000 | $325,000 |
| Leased Land and Building Costs (up to 5 months) | $21,000 | $59,000 |
| Total | $156,000 | $384,000 |
Total Estimated Initial Investment for Leased Site: $300,000 - $928,500
Purchased Site Costs
| Name of Fee | Low | High |
|---|---|---|
| Equipment, Decor and Sign Package | $200,000 | $325,000 |
| Land Costs | $200,000 | $1,000,000 |
| Building Costs | $155,000 | $615,000 |
| Mortgage Costs | $15,000 | $35,000 |
| Total | $570,000 |
$1,975,000 |
Total Estimated Initial Investment for Purchased Site: $714,000 - $2,519,500
Ongoing Fees:
| Name 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 Co¬Op Advertising (if applicable). |
| Local 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 Co-operative Advertising (if applicable). |
| Co-Op 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. | $100 Initial fee per Restaurant/$340 subsequent semi-annual fee per Restaurant |
| Renewal Fees | 10% of the then applicable license fee. |
| Transfer Fee (Ownership) | $13,500 for transfer of first Arby's restaurant; $1,000 if franchisee is already a 50% owner of at least one existing License Agreement |
| Training Fee | $1,200 per attendee. The first Arby's restaurant license fee includes the training fee for three managers in the first Restaurant and for one manager upon opening the second Restaurant The training fee is dependent on whether the manager(s) attends training at a nationally or locally certified training restaurant. The franchisee pays for their trainees' expenses. |
| Additional Training | The fee ranges from $0 to $1,200. You pay for your 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. |
| Repairs, Maintenance and Remodeling | As assessed. |
| 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 and Insurance | Insurance Carrier sets the premium |
Date of FDD: 2010
The above information has been compiled from the FDD of Arby’s along with online sources.
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