Everything You Need to Know About the Costs of Owning an Arby Franchise

Introduction

The franchise industry has grown steadily over the past few years, with an incredible growth rate of 5%. Arby’s franchise is especially popular among fast food fans, who are eager for a delicious, reasonably priced meal. Arby not only offers tasty options, but it also provides franchise opportunities for entrepreneurs around the world. Arby’s was public from July 2019 and enjoys a significant number of stores in the United States and abroad.

Given the many factors that make Arby’s franchise attractive to entrepreneurs, one of the main issues is understanding operating costs. In this blog post, we will take an in-depth look at franchise fees such as franchise fees, property lease/rent, labor, supplies and inventory, equipment, marketing, insurance, professional fees and licenses and permits.

Operating Expenses

When considering the cost of operating an Arby franchise, there are several major operating expenses to consider. These include, but are not limited to, franchise fees, rental or leasing of property, labor costs, supplies and inventory, equipment, marketing and insurance costs, professional fees and required licenses and permits.

• Franchise fees
• Lease / rent of the property
• Work (team members, management, human resources)
• Supplies and inventories
• Equipment
• Marketing
• Assurance
• Professional fees
• Licenses and permits

When starting an Arby’s franchise, start-up costs can vary greatly. The representation of financial performance provided by the Arby Franchise Disclosure Document will help reduce the estimated cost of start-up and ongoing operating expenses.

Franchise fees

The cost of a new Arby franchise starts with an initial franchise fee of ,500 – ,500 depending on the business structure. This is a one-time royalty paid to Arby upon signing the franchise agreement. In addition to Arby’s initial franchise fee, there are also other required fees and costs such as construction and equipment costs.

In addition to the initial franchise fee, New Arby franchisees are required to pay a 5% royalty fee on gross sales. There is also a designated 2% royalty fee for advertising and promotional expenses, as well as an additional system-wide marketing fund fee. Each Arby’s restaurant also has a marketing and advertising funds assessment of 1.25% of gross sales.

Additional ARBY franchise fees include an initial training fee of 0 per person, an initial accounting fee of 0, and a veteran fee of ,500. For Arby franchisees purchasing an existing unit, there is a transfer fee of ,500. It is important to note that all franchise fees mentioned here must be paid in US dollars.

Franchisees are also required to pay an annual renewal fee of ,800. This covers costs associated with renewing the franchise agreement, accessing services and corporate discounts, and other operational support.

When considering the cost of a franchise, potential franchisees should also consider working capital requirements. It is estimated that a potential franchisee should have an additional working capital of 0,000 set aside specifically for the restaurant.

Ultimately, the total cost of a new Arby franchise can range between 0,000 – ,400,000 , depending on restaurant size and general location.

Lease / rent of the property

When opening an Arby’s restaurant franchise, the cost of lease or rent of the property is one of the most important expenses to consider. The exact cost of the lease will depend on a variety of factors, including the specific location of the restaurant and the commercial real estate market in that area. However, according to recent statistics, Arby’s spends an average of ,000 to ,500 per month on a restaurant lease.

The total annual cost of a lease or ground rent for an Arby’s restaurant will vary greatly depending on the location of the restaurant. In the United States, owners of Arby’s restaurants must pay base rent, maintenance and repair costs, and all leasehold improvements. On average, the total cost of a lease for an Arby’s restaurant can range from ,000 to ,000 per year.

It’s also important to note that in some cases, Arby’s Restoration Franchise Owners may be eligible for Rebates and Incentives . The National Multi-Unit Franchise Agreement provides a base rent discount for franchisees who sign a lease for three or more restaurants. Franchises may also receive discounts for early rental renewals and larger rental terms. Additionally, some areas offer incentives designed to attract business, including tax networks and other financial incentives.

When considering the cost of opening an Arby’s restaurant franchise, prospective franchisees should always consider the cost of lease or rent of the property . While the length of the lease and the specific costs associated with the lease will vary greatly depending on the location of the franchise, they can average anywhere from ,000 to ,000 per year. Being aware of these costs and taking advantage of any discounts and incentives that may be available can help reduce the overall cost of the startup process significantly.

Labor (management of Human Resources team members)

Labor costs are often cited as the biggest challenge and cost to franchisees. According to the Franchise Business Review, average franchise labor costs in the United States are 16.3% of total revenue.

At Arby’s, over 80% of their retail locations are independently owned franchises and individual franchisees own over 95% of their global locations. Managing the labor costs of a large franchise system, like Arby’s, requires savvy management and a laser focus on efficiency.

Most Arby’s locations employ a team of 15-20 staff, with the majority of them being front-line workers, such as cashiers and kitchen staff. Depending on the state minimum wage rate and the size of the individual location, franchisees can expect to pay their staff anywhere from .25 to per hour. The average labor cost per employee per hour is approximately .50.

In addition to hourly wages, Arby’s franchisees will need to budget for the associated costs of managing a team of employees, such as mandatory payroll taxes, workers’ compensation, sick days, holidays and other benefits. The combined annual cost of managing a team of employees can be over 0,000.

Given the large budget a franchisee must set aside for labor costs, it is important for them to be proactive in their hiring process and to use the most popular payroll and time tracking systems. most effective available. Outsourcing staffing solutions, such as payroll processing, can also help reduce overhead.

Supplies and inventories

Supplies and inventory costs are a major expense for a restaurant franchise like Arby’s. According to the latest 2019 statistical figures, Arby’s supplies and inventory costs totaled .28 billion . For comparison, the same figure in 2018 was .20 billion .

A large portion of Arby’s supplies and inventory costs are attributed to food and food supplies, as well as packaging and advertising materials. This includes dairy, milk and meat products, as well as condiments and sauces, processed and prepared foods, beverages, etc. It also includes other product components such as grease, paper products, and condiment containers.

In addition, Arby’s also has inventory costs related to facilities, equipment and accessories. These include items such as chairs and tables, kitchen equipment, signage, display cases, etc. All of these are essential for any Arby’s location and should be considered and properly maintained.

Franchisees should also plan ahead for their inventory and provide costs as these costs can vary depending on the season and the menu. Seasonal menu items require a greater inventory allocation, while menu items that stay on the menu year-round will require less reallocation of supplies.

Equipment

Becoming an Arby franchisee is a lucrative business opportunity. However, it is important to understand the costs involved. One of the major components is equipment costs, which are typically the largest capital expenditures for a new business.

The exact equipment costs for a franchise will vary depending on the size of the restaurant and the equipment selected. Generally, the average cost of restaurant equipment for a typical Arby’s store ranges from 8,200 to 0,800 . This includes items such as refrigerators, ovens, point-of-sale appliances, meat slicers and more. In addition to these costs, each franchise must also budget for rentals, operating supplies, and maintenance costs.

Purchasing equipment directly from manufacturers is also an option. For example, ovens can range in price from 0 to ,800, depending on size and features. A quality POS system can cost upwards of ,000. The cost of these types of equipment acquisitions is a one-time expense, but the cost of maintenance, repairs, and replacements can vary depending on usage and product longevity.

In order to properly equip an Arby’s restaurant franchise, it is important to plan and budget for the most essential items needed for efficient and safe operations. Some of the essential things to consider include:

• Refrigerators – These units vary in size and features, but can range from ,300 to ,000.
• Ovens – Ovens are used to prepare food and can range in price from 0 to ,800.
• Point of Sale Devices – These devices are essential for processing customer payments and can typically range from ,000 to ,000.
• Meat Slicers – High-quality meat slicers are needed at most Arby’s restaurants, and they range in price from 0 to ,500.
• Dishes – Dishes such as plates, cups, and utensils can range in price from 0 to ,000.

As with any business, the success of an Arby franchise depends on many factors, including the equipment chosen. It is important to consider the cost of the equipment, but also the cost of maintenance, replacements and repairs. With the right planning, an Arby franchise can be a profitable business.

Marketing

For potential Arby franchise owners, one of the biggest operational costs to consider is the cost of marketing. Before opening the doors of your restaurant, customers must be informed of your Arby, which means the cost of marketing. How much you spend depends on the steps you take to promote your restaurant.

According to Statista.com, in 2018, Arby’s The Restaurant Group LLC spent a total of 3.2 million on advertising. If a franchisee decides to advertise only, the cost of doing so can vary widely across different mediums, from print, radio and television to social media, social media and beyond.

Advertising on radio or print publications such as newspapers or magazines can cost anywhere from for a radio ad or 0 for an AD newspaper or magazine to tens of thousands of dollars per ad, depending on the ad size, when the ad is placed and how often it will run.

Television advertising is also an effective way to get the word out about your Arby’s franchise. The cost of TV ads can range from a few hundred dollars for a low-cost local ad to millions of dollars for a national ad that runs on a major network. Costs may vary depending on the length of the ad and when it airs.

Nowadays, digital marketing has become an increasingly important part of a franchisee’s overall marketing strategy. From creating a digital presence on social media platforms, such as Twitter and Facebook, to creating an engaging website that includes customer reviews and loyalty programs for existing customers, there are a number cost-effective ways to engage potential customers and raise awareness of your Arby franchise. For example, Facebook ads can cost as little as to for a single ad, and Google ads cost on average around for each click.

These figures to represent the prices of various media and do not include other marketing costs such as market research, promotional material, promotional events, market surveys and other marketing activities. Ultimately, the success of your Arby’s franchise will depend on how much you invest in marketing.

Assurance

When it comes to owning a business, especially one as large and well-known as Arby’s franchise, insurance is a top priority and an important factor in operating costs. The total cost of annual franchise owner insurance will vary greatly depending on the type of coverage needed, the area of the country and the risk profile of the business. According to the latest statistics, the average accident compensation costs ,000 to ,000 per year .

Arby’s franchise owners need a wide range of coverage options, including:

• General liability coverage, to protect against claims related to accidents and other customer incidents
• Workers’ compensation insurance, to pay for medical expenses, lost wages, and disability benefits for injured employees
• Business interruption insurance, to compensate a business for lost revenue due to unforeseen circumstances such as fire, hurricane or other natural disaster
• Commercial property insurance, to replace buildings and commercial property damaged in a covered event
• Product liability insurance, to cover the cost of any injury or illness related to the product
• Cyber liability insurance, to cover the cost of data breaches or cyber attacks
• Employment Practices Liability Insurance, to protect business owners against certain employment-related lawsuits

The cost of different policies will depend on coverage limits and the location and risk profile of the individual company. It is important for the franchise owner to discuss their specific needs with an insurer to ensure they have the right types of coverage at a price they can afford.

Professional fees

When it comes to running a business, business fees can be a significant — and necessary — cost. It’s no different when it comes to franchising an Arby’s restaurant. The professional fees associated with owning and operating an Arby franchise can potentially increase to over ,000 USD.

These professional fees often include legal fees to establish a franchise agreement, accounting fees for necessary financial information, and training fees for Arby’s new franchise owner. Additionally, franchise owners need to factor in insurance costs for their property, employees, and customers, and professional fees for any necessary advertising, marketing, and promotions.

In total, the estimated initial financial requirement for establishing a new Arby franchise is between 5,000 and 7,000. Depending on the size of the restaurant and the location, these numbers may vary. Professional fees, however, can stay about the same – in the ,000 to ,000 range.

These estimates, however, do not include the cost that the franchisee will incur while they run the business. These will vary widely, depending on the type and size of Arby’s restaurant, rental costs, and staff and employee costs.

Licenses and permits

While the exact cost of a license or permit to open an Arby’s restaurant is difficult to determine, these costs may include obtaining a business license, liquor license, and prep health card. food.

Business licenses for restaurant operations vary widely in cost between different states and localities. The exact cost of a permit may depend on the type of permit, the size of the restaurant and the municipality where it will be located. In the United States, The Small Business Administration (SBA) estimates that a typical restaurant permit typically costs between 0 and .00 in total.

A liquor license for an Arby’s restaurant can cost anywhere from ,000 to ,000, depending on the type of license required, local regulations, and the jurisdiction where the restaurant is located. Additionally, to obtain a liquor license, applicants must demonstrate that they can provide sufficient security measures and can establish financial responsibility.

Finally, a food preparation health card is also required before opening an Arby’s restaurant. This card is issued by state and local health departments and is usually free or low cost (about ).

In total, the costs associated with licenses and permits for an Arby’s restaurant typically range from ,520 to ,000, depending on the aforementioned variables.

Conclusion

Operating an Arby’s restaurant franchise requires an investment of time and money. Important cost items to be aware of are franchise fees, property lease or rent, labor, supplies and inventory, equipment, marketing, insurance, professional fees and licenses and permits. The total cost can range from 0,000 to ,000,000+ , depending on the size and type of franchise, franchise fees and rent, location and other factors.

Opening and operating a franchise is a great way to become an entrepreneur. And Arby’s restaurants are among the most popular choices. With delicious and reasonably priced food, a wide range of franchise options, expert support from Arby’s and more, Arby’s is a great franchise opportunity for motivated entrepreneurs.

If you are considering becoming an Arby’s Restaurant franchisee, always do your research and talk to experienced franchisees before making any decisions. The cost of starting a franchise is significant, and with proper planning and research, you can maximize both your profits and your levels of success.