Arbys
Arby's offers deli-inspired sandwiches in a franchise model with investments ranging from $644,950 to $2,451,000. Known for roast beef subs, it operates in the quick-service restaurant sector.
About Arbys
Arby's Restaurant Group, Inc. doing business as Arby's is an American fast food sandwich restaurant chain with more than 3,300 restaurants. The flagship property of Inspire Brands, it ranked third in systemwide sales in the United States in the quick-service and fast-casual restaurant industries in 2012, behind Subway and Panera Bread. In October 2017, Food & Wine called Arby's "America's second largest sandwich chain ".
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Arbys franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of an Arby's Restaurant franchise ranges from $861,950 to $2,451,000 for a Free-Standing Arby's Restaurant and from $644,950 to $1,374,000 for a Non-Free-Standing Arby's Restaurant [p.1].
What is the initial franchise fee?
The initial franchise fee is a sum that must be paid by Franchisee to Arby's prior to issuing the Franchise Agreement. This fee is non-refundable and is not in exchange for any specific products, services, or assistance but rather for the granting of the franchise to operate an Arby's restaurant [p.268].
What are the ongoing royalty and advertising fees?
Ongoing royalties from franchised restaurants are based on a percentage of restaurant sales and are recognized as earned in the month following the revenue generation [p.217]. Advertising contributions by franchisees, managed by company subsidiaries, are also based on a percentage of restaurant sales and are recorded within "Franchise contributions for advertising" [p.233].
How long is the initial franchise agreement, and can I renew it?
The initial term of the franchise agreement is subject to a 10 to 20-year period, which may be renewed depending on meeting certain conditions [p.232]. Prior to the end of the term or as otherwise provided by the Company, a franchisee may elect to renew the term of the franchise agreement if certain conditions are met [p.232].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you cannot sell or transfer your franchise without the franchisor's approval, except for good cause as defined [p.5]. Additionally, any proposed transfer involving a direct or indirect ownership interest in your franchise or all or substantially all of its assets must also include the simultaneous transfer of associated rights and obligations, subject to the franchisor's consent [p.329].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the franchise agreement if any Other Franchise Agreement expires or terminates without renewal, or if the franchisee abandons or ceases to operate any Other Restaurant for any reason, as stated in [p.329].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The provided FDD does not detail specific net worth or liquid capital requirements for franchisees to qualify.
Do I get an exclusive or protected territory?
Based on the excerpts, you do not receive an exclusive territory. The franchise agreement does not provide options, rights of first refusal, or similar rights to acquire additional franchises within your Protected Area or contiguous areas [p.59]. Additionally, Arby's reserves the right to operate or franchise other parties to operate Arby's Restaurants at nontraditional locations inside the Territory or Protected Area, and in some cases, you do not receive a Protected Area at all [p.59]. Therefore, you may face competition from other franchisees, outlets owned by Arby's, or other competitive brands that Arby's controls [p.59].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training as part of the 'New Franchisee Orientation' [p.49], but the specific details are not detailed in these excerpts. For ongoing technology issues, the franchisor may offer guidance on strategy development, planning, and vendor resolution matters [p.54]. However, franchisees are responsible for ensuring compliance with POS and technology systems, including PCI requirements, and must assemble a team to address any issues [p.54]. Training fees for additional or specialized training at multi-brand locations are also provided by the franchisor [p.328, p.217], though the exact nature of this training is not specified in these excerpts.
How many franchised outlets are there, and how many have closed or been terminated?
As of December 31, 2024, there were 524 franchised McAlister's Deli restaurants in the United States [p.14]. For Arby's, 63 franchised outlets closed in 2024 [p.71], and according to Table No. 3, any divestments throughout each fiscal year are included in the "Outlets at the End of the Year" column [p.82]. This isn't specified in the excerpts for a precise number of terminated or closed Arby's franchises beyond those that closed in 2024.
Does the franchisor share any financial performance or earnings information?
The franchisor shares actual historical 'AUVs' (average unit volumes) for specific groups of franchised Arby's Restaurants, but this does not include projections or forecasts of future financial performance. This information is provided based on 2024 fiscal year data and does not reflect costs that must be deducted from AUV figures to determine net income [p.71, p.73].
What am I restricted to selling, and where must I buy supplies?
You are restricted in what you can sell as per [p.63], but specific details are not provided here. Regarding supply purchases, you may have to buy or lease items from the franchisor or a limited group of suppliers designated by them, which might be more expensive than other options ([p.3]). You need prior written approval from the franchisor to purchase from unauthorized suppliers for items that require approved suppliers ([p.44]).