Buyer Guide
Arby's Franchise Cost: The 0% Default Rate Secret
Arby's costs $652K-$2.5M with a perfect 0% SBA default rate across 261 loans. Why the safest QSR franchise is also one of the most overlooked.
Zero percent. Across 261 SBA 7(a) loans, not a single Arby's franchisee has defaulted. That is the same perfect record that McDonald's holds (across 1,247 loans) and that Chick-fil-A holds as well. Arby's is the third-largest franchise system with a 0% SBA charge-off rate. And almost nobody talks about it. The total investment runs $651,550 to $2,456,600. Average revenue is $1,274,787. The question is whether those numbers justify the strong loan performance, or whether the 0% rate is masking other risks.
The cost to open an Arby's
| Cost Category | Low | High |
|---|---|---|
| Franchise fee | $37,500 | $37,500 |
| Building & site development | $300,000 | $1,400,000 |
| Equipment, furnishings & signage | $175,000 | $550,000 |
| Opening inventory & supplies | $12,000 | $30,000 |
| Insurance, permits, working capital | $127,050 | $439,100 |
| Total estimated investment | $651,550 | $2,456,600 |
The $37,500 franchise fee sits between the $15,000 that Sonic charges and the $50,000 at Wendy's and Burger King. The total investment range is broad because Arby's operates freestanding drive-through restaurants, inline strip-mall locations, and non-traditional formats (airports, travel plazas, college campuses). A standard freestanding build runs $1.2M to $2M.
Why 0% SBA default is a bigger deal than you think
SBA loans carry personal guarantees. If a franchisee defaults, they lose the business and face personal liability. The fact that zero out of 261 Arby's borrowers defaulted means one of two things: either the unit economics are strong enough to service debt consistently, or the franchisee selection process filters for operators who will not overextend.
Probably both. Arby's is not a system where first-time franchisees walk in with an SBA loan and a dream. The typical Arby's operator is an experienced multi-unit restaurant professional. That selection bias contributes to the clean SBA record, but the record itself is still remarkable.
For comparison, here is how Arby's stacks up against its sister brands under Inspire Brands and competitors:
| Brand | SBA Default | SBA Loans | Avg Revenue |
|---|---|---|---|
| Arby's | 0.0% | 261 | $1.27M |
| Sonic (sister brand) | 8.3% | 144 | $1.55M |
| Wendy's | 1.3% | 99 | $2.11M |
| Burger King | 7.3% | 275 | $1.45M |
| QSR Average | 6.8% | -- | Varies |
$1.27M revenue is the weak link
Average gross sales of $1,274,787 put Arby's at the lower end of QSR revenue. It trails Sonic ($1.55M), Wendy's ($2.1M), and McDonald's ($4.0M). On a $1.5M buildout, a 0.85:1 investment-to-revenue ratio in year one is tight.
The FDD does not disclose net income, so we cannot verify what Arby's owners actually take home. But back-of-envelope math on $1.27M revenue with 4-6.2% royalty ($51K-$79K), 5.2% ad fund ($66K), 30% food cost ($382K), 28% labor ($356K), and 10% rent ($127K) leaves roughly $160K to $190K before other overhead. Owner earnings likely range from $70K to $130K per year.
That is modest. Not terrible for a franchise with a 0% default rate, but not the kind of return that gets operators excited about opening a fifth unit.
Slow growth: 2.5% per year
Arby's went from 2,316 to 2,344 franchised units over three years, with 3,265 total. Growth of 2.5% annually is better than contraction (which Sonic, KFC, and Subway are experiencing), but it is well below the 9-12% growth rates of Jersey Mike's and Wingstop.
Litigation: product misrepresentation and data breaches
The FDD discloses class action lawsuits regarding product misrepresentation (meat quantity and wagyu content claims) and data security breaches. The no-poaching settlements common to Inspire Brands also appear. These lawsuits affect brand perception and could deter customers, though Arby's has managed to maintain stable revenue through them.
20-year term with radius-based territory
The 20-year initial term is standard for large QSR brands. The radius-based territory gives you a defined market area, which is better than the location-only protection at Burger King and Wendy's. For a drive-through concept, the radius matters because your competition is every other restaurant within driving distance, including other Arby's locations.
The verdict on Arby's
Arby's is the franchise equivalent of a utility stock: low drama, steady performance, no spectacular returns. The 0% SBA default rate is the strongest signal in its favor. The $1.27M average revenue is the biggest limitation. If you want safety over growth, Arby's delivers. If you want a high-growth, high-return QSR play, look elsewhere.
See the full breakdown on the Arby's profile page, or compare it to other QSR brands using real FDD and SBA data.
The bottom line
The data tells us something counterintuitive about Arby's: it may be the most underrated franchise in QSR. A 0% SBA charge-off rate across 261 loans puts it in elite company with McDonald's and Chick-fil-A, yet most buyers overlook it because roast beef sandwiches are not as exciting as chicken or burgers. If I were investing, I would view that niche positioning as a strength, not a weakness — Arby's competes in a category with almost no direct competitors, which insulates it from the brutal competition that drives up default rates at burger and pizza brands. What most buyers miss is that being part of Inspire Brands gives Arby's access to shared supply chain and technology investments from a portfolio that includes Dunkin', Sonic, and Buffalo Wild Wings.
Related franchise research
Continue your research with our Burger King franchise analysis, Chick-fil-A franchise model, and best food franchises guide.
Research Arby's further
- 📄 Download the Arby's FDD summary — $5 per brand
- 📞 Get Arby's's verified franchisee contacts — $49 per brand. Call real owners before you sign.
- 📊 Category profitability report — $99. See how Arby's ranks against every competitor.
Frequently Asked Questions
- How much does an Arby's franchise cost?
- An Arby's franchise costs $651,550 to $2,456,600 to open, per the 2026 FDD. The franchise fee is $37,500. A standard freestanding drive-through restaurant typically costs $1.2M to $2M including construction, equipment, and working capital.
- What is Arby's SBA default rate?
- Arby's has a 0% SBA 7(a) charge-off rate across 261 loans. This is one of the best track records in the QSR category, matching McDonald's (0% across 1,247 loans) and Chick-fil-A. No Arby's franchisee in the SBA database has defaulted on a government-backed loan.
- How does Arby's royalty compare to category average?
- Arby's charges a 4% royalty plus 4.2% advertising, totaling 8.2% of gross sales. The QSR average royalty is approximately 5.4%. Arby's total fee load is among the lowest in the QSR category, which combined with the 0% SBA default rate, makes the unit economics favorable.
- Does Arby's require owner-operators?
- Arby's focuses on multi-unit operators with restaurant experience. Inspire Brands (the parent company) typically approves franchisees who commit to developing multiple locations, which means the brand skews toward experienced operators rather than first-time franchise buyers.
- What other brands does Inspire Brands own besides Arby's?
- Inspire Brands is the second-largest restaurant company in the United States, operating Arby's alongside Dunkin', Buffalo Wild Wings, Sonic Drive-In, Jimmy John's, and Baskin-Robbins. This portfolio gives Arby's franchisees access to shared supply chain leverage, technology platforms, and cross-brand real estate expertise. However, managing six major brands also means corporate attention is split, and franchisee concerns can get deprioritized when portfolio-level decisions take precedence over individual brand needs.