Arby's
Date of Incorporation: 1964
Franchising Since: 1965
Headquarters: Atlanta, Georgia
Country: USA
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: Two franchise offerings:
i.) Arby's traditional ful service/fulll menu restaurant which are either free standing or situated within malls, convenience stores and truch stops that occupy at least 1600 sq feet
ii.) Limited menu, limited size and limited service restaurants. Non traditional Arby's Restaurant categories include locations in
A) Airports, stadiums and arenas which have no seating or shared seating
B) Casinos, colleges and universities which have common area seating.
C) Convenience stores and truck stops with less then 1,600 sq feet of restaurant space and 0 to 28 seats.
Financial Assistance: The franchisor does not engage in the business of offering financing to franchisees. They do not guarantee the franchisees note, lease, or any other obligation. However, The CIT Group/Equipment Financing, Inc. offers a finance program for the remodeling of previously existing Arby's franchise restaurants.
Training and Assistance: It is required for the franchisee to participate in the Pre-Opening Orientation Program. For the first unit opened, completion of and certification in the Arby's restaurant Management Training Program is mandatory for new franchisees and at least two Restaurant Managers. If the franchisee will not be participating in the direct operation of the licensed business, then three Managers must attend, complete, and become certified in the MTP. The training lasts 7 weeks, with 48 hours of ‘on-the-job’ training per week.
Territory: The franchisee will be granted a specific and limited protected area surrounding the Restaurant. The franchisor will not operate or license others to operate an Arby's restaurant within the Protected Area during the term of the License Agreement. If the Restaurant is a free-standing structure, we will typically delineate the Protected Area by a 1-mile radius.
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 2,574 franchised 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 | $325,00 |
| 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 | Not to exceed 2% of monthly Gross Sales (current amount being 1.2%). |
| Local Advertising | Not less than 3% of annual Gross Sales. |
| Co-Op Advertising | Determined by participants in the co-op area advertising program and is generally in the range of 3%-7%. |
| Membership in ARCOP, Inc. | $100 Initial fee per Restaurant/$190 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 | The first Arby's restaurant license fee includes the training fee for three managers in the first Restaurant and for one manager upon opening thesecond 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 is dependent on whether the manager(s) attends training at a nationally or locally certified training restaurant, and it ranges from $0 to $1,500. The franchisee pays for their 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 annum. |
| 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: 2009
The above information has been taken from the UFOC/FDD and online sources of Arby's.
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