Arby’s Franchise – Comprehensive Guide to Cost and Profit Analysis Today

 

Arby’s, one of the largest top fast-food chains in the United States, makes it a priority to deliver tasty quick food that keeps customers returning for more. Operating an Arby’s franchise might position you as a franchisee of one of America’s most famous and loved restaurants.www

The food and beverage business employs 13% of all manufacturing workers in the United States. This industry employs around 1.46 million people. Food franchises account for 36% of total franchise operations in the United States, and it is predicted that 1.6 million more jobs will be created by 2027.

 

Is Arby’s A Franchise Opportunity?

Yes, Arby’s is a franchise opportunity and one of the largest fast-food chains, having franchised over 3,000 locations, including the company’s 1,000+ locations.

What is the Arby’s?

Arby’s is a fast-food sandwich restaurant brand in the United States with over 3,300 locations and ranks third in terms of sales. It was started on July 23, 1964, in Boardman, Ohio, by Forrest and Leroy Raffel, owners of a restaurant equipment company that saw a market opening for a fast food franchise focused on food other than hamburgers.

A Brief History of Arby’s

Arby’s products include deli-style Market Fresh sandwiches, Curly Fries, and Jamocha Shakes, in addition to its famous Roast Beef and Beef ‘n Cheddar sandwiches. The company is headquartered in Sandy Springs, Georgia, an Atlanta suburb with Atlanta postal addresses. Outside of the United States, there are foreign locations in Turkey, Qatar, the United Arab Emirates, Canada, and Kuwait.

Arby’s was founded in 1964 in Boardman, Ohio by Forrest and Leroy Raffel. The brothers wanted to create a unique fast-food concept that would offer a wide variety of delicious sandwiches. They started with just one restaurant but quickly expanded to other locations. Today, Arby’s has over 3,500 restaurants worldwide and is still growing.

What Does Arby’s Offer on its Menu?

Arby’s is best known for its delicious roast beef sandwiches, but the restaurant also offers a variety of other menu items, including chicken sandwiches, salads, sides, and desserts. The restaurant is always looking for new and innovative ways to offer its customers the best possible dining experience. Whether you’re in the mood for a classic roast beef sandwich or something a little more adventurous, Arby’s has something for everyone.

Facts That Nobody Told You About Arby’s

• There does not exist anyone named Arby. 
• The largest curly fry in the world was 38 inches long. 
• Rhode Island and Vermont are two of the only states without an Arby’s.
• It was the first fast-food chain to ban smoking in all its restaurants. 
• Most Arby’s restaurants in America are in Ohio.
• Hank Aaraon was Arby’s franchisee once. 
• Their original menu had three items, and none among them was burgers. 

Arby’s Franchise Review and Information

Industry Type	Food Franchise Opportunities
Sub Category	Sandwich Franchise Opportunities
Year Established	1964
Company Name	Arby’s Restaurant Group, Inc. (ARG).
Founder/Management Head	Jim Taylor (President)
Franchising Started	1965
Franchise Expansion Plan	Offering new franchises throughout the US and worldwide
Number of Units	3602 units (as 0f 2023)
Number of Franchise Units	2291 franchise units in the United States154 franchise units internationally
Social Media Handles	Facebook
	Twitter
	Youtube
	Instagram
Company Office location	3 Glenlake Pkwy. N.E. Atlanta, GA

Arby’s Franchise Requirements

To become a successful franchise owner of Arby as per their official website, their ideal applicant must have extensive knowledge and expertise when it comes to operating multi-unit restaurants. Also, a strong desire to open more Arby’s locations. 

Candidates must also have a liquid capital of at least $500,000 and a net worth of at least $1,000,000.

 

How much does an Arby’s franchise cost?

The franchise cost of an Arby’s franchise can be summarized as below: 

• Initial franchise fee: $6,250-$50,000
• Initial investment: $644,950 – $2,451,000
• Net worth: $1,000,000
• Cash requirement: $500,000

Further, the royalty fee and advertising fee to become a franchisee is 4% and 4.2% respectively. 

How much does it cost to franchise an Arby’s in the United States?

Arby’s Initial and On-going Franchise Cost
Arby’s Franchise Fee	$6,250-$50,000
Arby’s Franchise Cost	$644,950 – $2,451,000
Royalty Fee	4%
Advertising Fee	4.2%
Term of Agreement	20
Is the franchise term renewable?	Yes
Veteran Discount	50% off the development fee and the license fee is waived and the royalty fee for the first year is decreased

Arby’s Training to Franchises

If franchisees are new, the franchisor will require them to attend New Franchisee Orientation (NFO). If they are a partnership or corporation, the franchisor demands participation in the NFO by a partner or approved shareholder. The NFO provides a quick overview of Arby’s system and administrative corporate support. 

Franchisees must always employ three managers who have managed to complete and are certified in the Management Training Program (MTP) by Arby’s or a comparable training program approved by the franchisor for the first and second restaurants. If the franchisee will be directly involved in the operation of the restaurant, one of these individuals may be the franchisee.

The current MTP lasts seven weeks and is held at a Nationally Certified Training Restaurant. Along with the MTP and  NFO, the franchisor utilizes its “Revitalization Roadmap” to assure successful implementations for new restaurant openings, particularly for a franchisee’s first and second stores. The training for the first restaurant incorporates the services of two individuals who will help with the required pre-opening and post-opening staff training for ten calendar days. The training for the second restaurant includes the services of one person to assist with the required pre-opening and post-opening staff training at the restaurant for days.

Arby’s Franchising Operations 

For carrying out its franchising operations, Arby has two franchise format offerings

• Traditional 

It includes limited service and a full menu at Arby’s restaurant, which can be found at standalone sites, travel plazas, inline and end cap locations, truck stops, malls, and convenience store combos. Most of them tend to have a drive-through window.

• Non-traditional 

This includes limited menu selection, size, and service restaurants that typically occupy a smaller retail location, provide no or limited seating, might cater to a large audience, have a limited menu, and may offer reduced services, labor, storage, and altered hours of operation. 

Locations in casinos, hospitals, universities, stadiums, airports, army bases, toll plazas, amusement parks and arenas, colleges, and other institutionalized facilities with common area seating are examples of non-traditional Arby’s restaurant types.

How is Arby’s Territory Granted to Franchises

Under each License Agreement, franchisees will manage one restaurant in a location chosen by the franchisor. In its exclusive discretion, the franchisor may award franchisees a limited and specified protected area around the restaurant. 

The franchisor would not operate or license others to run an Arby’s restaurant using the licensed trademarks and selling deli-inspired sandwiches to consumers inside the protected region, if any, throughout the License Agreement. 

In case the restaurant is a free-standing establishment and the franchisor offers a protected area, the protected area will normally be defined by a one-mile radius around the location or by border streets or highways. The franchisor will not offer any protected space if franchisees run a non-traditional restaurant.

What is Arby’s Franchise Term of Agreement and Renewal?

The initial franchise term for a traditional restaurant can be up to 20 years. It can be less if the franchisee’s lease is less than 20 years if the franchisee decides to purchase an established company-owned restaurant and the franchisor does not own the property, or if the franchisee purchases an existing franchisee’s restaurant; the franchisee will receive either a 20-year term or the balance of the term under the agreement that already exists.   

The initial period for non-traditional restaurants is the lower of 10 years or the duration of the lease with the relevant airport authority, stadium, or arena, or the duration of the lease for the licensed premises. Franchisees that meet the approval conditions may be granted a Successor License Agreement.

Does Arby’s provide Financial Assistance to Franchises?

The franchisor provides no direct or indirect finance. A franchisee’s debt, lease, or obligation is not guaranteed by the franchisor. There seem to be incentive programs available; details can be found in the FDD. Arby franchisees are eligible for accelerated and simplified SBA loan processing via the SBA’s Franchise Registry.

Pros & Cons of owning an Arby’s franchise

PROS

• Diverse meal choices
• Design that is eye-catching
• Various outlet models to choose from 
• Enhancing business culture

CONS

• There is no assurance of financial support.
• There is no Protected Area Agreement in place for non-traditional sites.
• There is no waived fee for non-traditional locations.
• Employee compensation costs are rising.

 

How much do Arby’s franchise owners make?

Arby’s does not publish financial information online, however, when compared to other similar fast-food restaurants in the United States, its business owners are expected to earn $100,000 to $150,000 each year. This is a rough assumption based on other rival fast-food businesses like McDonald’s and Subway.

It is an extremely profitable business for franchisors, with retained earnings of about or around $166.61 million in 2023 When its retained earnings are compared to 2020, a 21.16% increase can be seen, showing that the company is growing rapidly.

Initial midpoint investment	% Profit margin of average franchise sales	Estimated profits	Time to recoup the investment
	10%	$147,197	14 years
$1,471,975	15%	$220,796	10 years
	20%	$294,395	8.25 years

What is Arby’s franchise profit?

As one of the leading food brands, it generates gross revenue of more than $3.9 billion per year across all of its locations. Arby’s has kept its financial details online private, but it is estimated that its business owners earn $100,000-$150,000 per year. 

What are Arby’s franchise reviews?

An Arby franchise can be a great way to break into a struggling business, especially considering the track record of the two men in control, Brown and Aronson. Arby is a franchise and one of the leading fast-food chains, having franchised over 3,000 locations, including the company’s 1,000+ sites.

Arby’s Franchise Rankings

Rank	Year	Achievement
#9	2024	Franchise 500 Ranking
#12	2023	Top Global Franchises
#21	2023	Fastest-Growing Franchises
#1	2023	(Miscellaneous Sandwiches) Best of the Best
#1	2023	(Miscellaneous Sandwiches) Top Food Franchises

Franchise Deck Analysis and Overview

Arby’s is one of the largest fast food and sandwich companies in the United States, having been started in 1964 and beginning franchising in 1965. Arby’s aspires to be known for its excellent and memorable sandwiches. Arby’s may offer a sandwich for every moment, event, and craving, having created themselves as the sandwich kings. They are generally committed to providing excellent, inexpensive, and filling meals.

Arby’s Franchising offers numerous benefits such as Restaurant Planning, a diverse menu selection, eye-catching design and construction, multiple outlet types, an upbeat business culture, operational training, branding and marketing, and other assistance to help you succeed.

Because of the increase in Arby’s presence throughout the pandemic time, the company’s brand is undoubtedly well-known. With one of the largest shop networks, top-of-mind awareness among customers should be strong. The long-standing company also keeps up with the trends. Potential franchisees should think about their business presence in the neighborhood where they want to operate an Arby’s.

Is the Arby’s Worth the Franchise Cost?

A potential franchisee must possess $644,950 – $2,451,000 as an initial investment for an Arby’s franchise. 

Based on the median sales supplied by Arby’s franchise units, it will take approximately ten years to return the investment at a profit margin of 15%. This is a longer term than most franchise opportunities. You might not earn a 15% profit margin, which would delay your return on investment. One should keep the same in mind before investing in the franchise. 

The epidemic has had a significant impact on the restaurant business, with one in every six restaurants closing since April, which may make you reconsider investing in one. Arby’s is an extremely profitable business for the franchisor, with $166.61 million in retained earnings in 2021. They increased by 21.16% from 2019 to 2021, from $137.1 million in 2019. This is a sign of the company’s overall rapid expansion.

Apart from the quantity of the deal, the timing is also noteworthy, as the fast-food restaurant industry has struggled with the implementation of COVID-19. 

Arby’s Franchise Success and Failure Rate

The below table will highlight Arby’s franchise’s success and failure rate for the last 3 years. This will supplement your decision-making process.

Year	Format	Start	End	Change
2019	Franchise Owned	2,195	2,168	-27
Company Owned	1,132	1,189	57
2020	Franchise Owned	2,168	2,173	5
Company Owned	1,189	1,192	3
2021	Franchise Owned	2,173	2,291	118
Company Owned	1,192	1,116	-76

Competition Analysis of Arby’s
Arby’s	Cost to Franchise	Franchisee Fees	Royalty + Ad fees	Expected Profit	Recoup of Capital	FD Rating
Arby’s	$628,950 – $2,306,000	$6,250-$50,000	4%+4.2%	$3.9 billion	8-14 years
Jack in the Box Franchise	$1,765,500- $2,761,600	$50,000	5%+5%	$196,906-$283,545	7.5-11 years
McDonald’s Franchise	$1,366,000 to $2,450,000	$45,000	4%+4%	$150,000	8.5 years
Burger King Franchise	$1,790,800 – $4,194,700	$50,000	4.5%+4%	16%	8 to 12 years
Wendy’s Franchise	$3,693,000 – $1,887,500	$50,000	4%	$ 330490 to $ 440653	8 to 12 Years

The FD rating for Arby’s franchising is 3.9/5.0.

 

Conclusion 

Forrest and Leroy Raffel aspired to develop a fast food concept that offers more than just burgers with Arby’s, which was founded in 1964 and has been a franchise since 1965. They possessed prior industry experience as owners of a restaurant equipment company. The brand has a strong base of followers and is a nationally recognized top fast food franchise, with over 3,300 stores in its system. 

The brand is so popular that it has had a decade of growth from 2011 to 2020, with no indications of slowing down. Franchise owners can also renovate existing restaurants. Individuals who did so witnessed a 10 to 12 percent rise in sales growth.

Even during the pandemic, the brand shone, demonstrating its industry popularity.If you want to open an Arby’s franchising. It is recommended that you take a look at the franchise requirements and ongoing fees. 

You can explore other sandwich franchise categories can look at

1. McDonald’s Franchise
2. Subway Franchise 
3. Texas Roadhouse Franchise
4. Jimmy John’s Franchise 
5. Jersey’s Mike Franchise
6. Wingstop Franchise
7. Domino’s Franchise
8. Wayback Burgers
9. Krispy Kreme Franchise
10. Firehouse Subs Franchise

Frequently Asked Questions (FAQs)

1. Is Arby’s franchise profitable?

Yes, owning an Arby franchise can be profitable for a potential franchisee. It is, however, important to consider all the requirements and obligations provided by the company before starting a franchise. 

2. Can you make money owning an Arby’s franchising business?

Yes, a franchise owner can make a good amount of money by owning an Arby.

3. Is Arby’s a franchise?

Yes, Arby is a franchise. The brand started franchising in 1965 and has franchised over 3000 locations to date. 

4. How much is Arby’s franchise?

To open an Arby  franchise, a potential franchise is required to have the following

• Initial franchise fee: $6,250-$50,000
• Initial investment:  $644,950 – $2,451,000
• Net worth: $1,000,000
• Cash requirement: $500,000