Franchise Deep Dive: Arby's Franchise Costs, Fees, Profit and Data

Sure, the chain may ‘have the meats,’ but does it have the goods to be a winning business opportunity?

By Luca Piacentini1851 Franchise Managing Editor

Updated 10:10AM • 01/10/23

LAST UPDATED: December 15, 2022
FRANCHISE WEBSITE: https://arbysfranchising.com/
NUMBER OF LOCATIONS: 3,300
REPORTED COST TO GET IN: $637,950 to $2,306,000
REPORTED ROI (Item 19): $1,296,616 Median Franchise Sales

Arby’s, the 3,300-unit sandwich franchise under the Inspire Brands umbrella, is headquartered in Sandy Springs, Georgia. Arby’s was founded in Boardman, Ohio, by the Forrest brothers and Leroy Raffel in 1964. Back then, the fast-food burger business was booming, and the founders wanted to offer a tasty and quick-serve alternative: roast beef. Today, the Arby's menu includes its famous roast beef, Market Fresh sandwiches, wraps and salads, as well as other one-of-a-kind items such as curly fries and Jamocha shakes.

How Many Arby’s Locations Are There?

Over the last three years, the company has increased its outlet presence from 3,327 in 2019 to 3,407 in 2021, which is a significant indicator of growth during the COVID-19 pandemic period. Both franchising units and company-operated stores have increased. Arby’s footprint includes locations in Canada, Mexico, Turkey, Egypt, South Korea and Yemen, in addition to the U.S.

Arby’s has been franchising since 1965. Roark Capital Group acquired 81.5% of Arby’s Restaurant Group in 2011, forming the major share of ownership with The Wendy’s Company having a stake of 18.5% in Arby’s. In 2018, ARG took over the ownership of Buffalo Wild Wings.

Today, Arby’s is part of parent company Inspire Brands, a global, multi-brand restaurant company unlike any other. They are home to five leading restaurant brands and more than 11,100 locations globally.

What is the Arby’s Business Model?

For the past 65 years, Arby’s has been perfecting its systems so that each franchisee can take advantage of easy buying, storage, training and management processes. Arby's restaurants are now constructed in a traditional or non-traditional design, highlighting prominent architectural features. The flexible, contemporary layout allows the brand to adapt restaurants to almost any prime commercial site. The chain also offers a range of prototypes and investment options to accommodate specific business needs.

Traditional: 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. The vast majority of these include a drive-thru window.
Non-traditional: Limited menu, limited size and reduced service restaurants, which generally occupy a smaller retail space, offer 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 Can Arby’s Franchise Owners Make?

2021 Arby’s Median Franchise Sales: $1,296,616

Based on the median sales provided by Arby’s franchise locations, at an average of a 15% profit margin, it will take around 10 years to recoup the investment. This is longer than other franchise opportunities.

How Much Does it Cost to Open an Arby’s?

The estimated total investment necessary to begin the operation of an Arby’s Franchise ranges from $637,950 to $2,306,000. The following costs are part of the upfront costs included in the initial investment for Arby’s. Many of these are one-time fees that are needed to launch the franchise.

Development Fee: $6,250 – $12,500
License Fee: $0 – $37,500
Fees and Expenses During Training: $5,000 – $23,400
Total Development & License Fees/Training: $11,250 – $73,400
Real Property/Occupancy ChargeVariable/FootnoteSite Costs: $0 – $451,000
Landscaping: $0 – $63,000
Total Site and Real Estate (excluding purchase/lease): $0 – $514,000
Civil & Architectural Drawings/Professional Fees: $40,000 – $219,000
Zoning/Permitting Costs: $1,000 – $112,000
Building Costs: $234,000 – $731,000
Equipment: $183,000 – $262,000
Computer Hardware and Software/ POS: $32,000 – $55,000
Décor Package: $11,000 – $45,000
Signage & Drive Thru: $44,000 – $88,000
Total Building/Construction/Equipment: $545,000 – $1,512,000
Pre-Opening Wages: $21,300 – $41,200
Opening Inventory: $18,000 – $26,000
Insurance: $8,400 – $14,400
Working Capital/Additional Funds: $33,000 – $100,000
Lease Deposits and PaymentsVariable/FootnoteBusiness Licenses, Health Permits, Utilities Deposits: $1,000 – $25,000
Total Pre-Opening/Operating Deposits: $81,700 – $206,600
Total Estimated Initial Investment (excluding purchase/lease): $637,950 – $2,306,000

Ongoing Costs

Royalty: 4.0% of gross sales for traditional restaurants and 6.2% for nontraditional ones.
Marketing Fee: 4.2% of gross sales
Local Marketing: 2.3% of gross sales

What if the Franchise Fee for Arby’s?

The initial Arby’s Development Fee is between $6,250 to $12,500, paid at the time of the signing of the Development Agreement. A further $0 to $37,500 License Fee is paid upon commencement of construction.

Who is the Leadership of Arby’s?

What Helpful Articles Can I Read to Learn More About Arby’s?

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