Arby’s Franchise Owner Salary, Profit & Failure Rate 2024

The fast food industry is one of the biggest industries to own as a business because of the extensive customer base.

There are many big brands producing billions of dollars each year. Arby’s is one of those brands serving hundreds of millions of customers each year in thousands of different locations across the globe.

If you are thinking about whether owning an Arby’s franchise business is a wise choice, you are in the right place.

It might be hard to make that decision, and this article will focus on showing you Arby’s franchise business. We will discuss all the surrounding details about Arby’s and their franchise details.

Arby's Franchise

About Arby’s Company

Arby’s is an American multinational fast-food sandwich restaurant chain active globally. They specialize in roast beef sandwiches, but they also offer a variety of menu items.

These items include chicken sandwiches, curly fries, mozzarella sticks, and more.

All of the sandwiches on their menu come with their standard additions, such as mustard, mayonnaise, red onion, lettuce, and others.

Arby’s was founded by the Raffel brothers, and the name “Arby’s” comes from the initials “R.B.,” which stands for “Raffel Brothers.”

They are currently headquartered in Georgia, United States. Today, Arby’s has over 3,400 restaurants in several countries.

In 2017, a report called Arby’s the second biggest sandwich store in the world after Subway.

They are known for their commitment to high-quality ingredients and dedication to providing customers with a unique dining experience.


Arby’s Company History

Arby's Company History

Arby’s was founded by Forrest and Leroy Raffel brothers in 1964 in Boardman, Ohio.

The first location by the Raffel brothers was a sandwich shop that only served roast beef sandwiches and potato chips.

Arby’s interior design was purposely designed luxuriously from day one to attract a higher clientele. This also was seen in their prices.

Despite their current high prices at the time and the luxurious design, they grew rapidly.

By the 1970s, they were opening 50 new stores a year. They also included new items to their menu during this expansion time.

Arby’s underwent several changes in ownership over the years when lastly Roark Capital Group acquired an 80% stake in the company, which is also the majority owner of Inspire Brands.

Today, Inspire Brands run Arby’s, which has over 3,500 stores across several countries.

They keep on expanding their stores and are eager to provide more to potential franchisees in the future.


Arby’s Franchise Model

Cost Or FeesAmount
Initial Investment       $861,950-$2.4 million
FranchiseYES
Franchising Since1965
Franchise-Fee$12,500
Royalty-Fee4-6.2%
Liquidity$500,000
Estimated Outlets3,560

 


How Much Does It Cost To Open An Arby’s Franchise?

The expected initial cost to open an Arby’s franchise is between $861,950 and $2.4 million.

The initial investment includes the franchise fee, which is $12,500 that you pay in the beginning and in a lump sum.

The biggest differentiator in the cost is your building and the lease you will have since Arby’s doesn’t have any support for that.

In addition to these costs, you are also required to pay an ongoing royalty fee to the franchisor each month.

It is 4% for traditional restaurants and 6.5% for non-traditional restaurants from the gross sales.

There is also a marketing fee that you are required to pay, which is 4.2% only for traditional restaurants. Non-traditional restaurants don’t have it because it’s taken from the royalty fee.


Arby’s Franchise Requirements

Arby’s Franchise Requirements

To be approved as an Arby’s franchisee, you must first comply with their financial requirements.

This financial requirement is that you need to have a minimum net worth of $1 million and a liquid capital of at least $500,000.

Without complying with these two financial requirements, you are not going to be approved as an Arby franchise.

In addition to the financial requirements, you also need to possess some background experience.

Arby’s is looking for franchisees who desire to open more than one Arby location and manage them.

For this, they are mostly looking for people with heavy experience in multi-tenant restaurant operations.

This is not a must but will definitely make it easy for you if you have experience as a restaurant manager or operator.


Arby’s Profit & Revenue

Arby’s is run by its parent company, Inspire Brands, which was formed after Arby’s bought Buffalo Wings company.

Because of this, learning about the exact profit and revenue numbers of Arby’s is not possible since Inspire Brands doesn’t share the revenues of the brands individually.

However, some reports on the internet suggest that Arby’s had a total revenue of $4.2 billion in 2021. The profit out of this $4.2 billion revenue is unknown.

Additionally, we are aware of how much Inspire Brands makes annually from their latest available report.

The company had over $30 billion in total revenue in 2021. It’s a double-digit year-over-year increase in their numbers. Their profit numbers are not public, just like Arby’s.


How Much Does a Arby’s Franchise Owner Make?

As per the performance of Arby’s franchise stores in 2021, it can be said that Arby’s franchise owners make $1,296,616 in revenue on average.

If we assume a profit margin of 15%, then we can calculate that a Arby’s franchise owner make estimated annual profits of $194,492 on average.

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%1296616.00
Rent10.62%(137765.45)
Insurance5.31%(68882.72)
Salaries21.25%(275530.90)
Franchise Royalty Fees5.31%(68882.72)
Utilities2.13%(27553.09)
Cost of Goods Sold (COGS)26.56%(344413.62)
Labor (Variable)13.81%(179095.08)
Total (Expenses)85.00%(1102123.60)
Net Profit15.00%194492.40

Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.


Payback Period Of Arby’s Franchise

With an investment of $2,400,000 and an estimated 15% profit on the median sales, which is $1,296,616, the yearly profit would be $194,492.

So, to find out how long it will take to earn back the initial investment:

Payback Period = Investment / Yearly Profit = $2,400,000 / $194,492 = 12.3 years

Based on these figures, it will take approximately 12 years to pay back the initial investment for Arby’s. This time period could be longer or shorter depending on your sales, revenue, and profit figures.


Failure Rate Of Arby’s

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
20202,1682,173+5
20212,1732,291+118
20222,2912,305+14

For the Franchised outlets:

  • In 2020, the growth rate was (5)/2,168×100≈0.23%
  • In 2021, the growth rate was (118)/2,173×100≈5.43%
  • In 2022, the growth rate was (14)/2,291×100≈0.61%

Company-Owned Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
20201,1891,192+3
20211,1921,116-76
20221,1161,110-6

For the Company-Owned outlets:

  • In 2020, the growth rate was (3)/1,189×100≈0.25%
  • In 2021, the failure rate was (76)/1,192×100≈6.37%
  • In 2022, the failure rate was (6)/1,116×100≈0.53%

Total Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
20203,3573,365+8
20213,3653,407+42
20223,4073,415+8

For Total outlets:

  • In 2020, the growth rate was (8)/3,357×100≈0.23%
  • In 2021, the growth rate was (42)/3,365×100≈1.24%
  • In 2022, the growth rate was (8)/3,407×100≈0.234%

According to the above-mentioned data, we can see that the franchised outlets for Arby’s grew from 2020 to 2022, showing a growth rate between 0.23% and 0.61%.

On the other hand, for company-owned outlets, the failure rate of Arby’s was lying in the range between 6.37% and 0.53% from 2021-2022. However, the company started with a positive change, showing a growth of 0.25%.

Overall, when we combine the data of franchise and company-owned outlets, we can see that Arby’s franchise has expanded in the years 2020-2022, showing a total growth rate between 0.23% and 0.234%.


Arby’s Franchise Training and Support

If you are a new, first-time franchisee, you must attend Arby’s New Franchise Orientation program.

This program gives you a small overview of Arby’s franchise system and the kind of administrative support you will receive.

If you are not a first-time franchisee, then you must have at least three managers per store that are certified by Arby’s.

These managers’ certifications must be in Arby’s Restaurant Management Training Program or a similar program that Arby’s can approve.

This training program is for seven weeks and happen at a nationally certified training restaurant on-site.

You also receive special training that focuses on the pre-opening and post-opening of franchise branches.

This ensures that the franchisee can successfully open more restaurants without further training.


Arby’s Franchise Terms of Agreement and Renewal

Arby’s Franchise Terms of Agreement and Renewal

The initial term of the agreement for traditional Arby’s franchise stores is 20 years, and 10 years for non-traditional Arby’s franchise locations.

The terms could be shorter if the lease of the property is shorter than the initial 20- or 10-year period of the agreement .

If the franchisee purchases an existing company-owned Arby’s, this could also affect the length of the agreement.

The renewal of the agreement is available both for traditional and non-traditional locations.

The actual length of the renewal depends mostly on the conditions of the store and the agreement you will make with the franchisor.

In the case that you are approved for renewal, this will happen through a successor license agreement.


Arby’s Franchise Obligations and Restrictions

Franchisees are obligated to truthfully and diligently perform all the obligations under the license agreement.

This includes doing the best to enhance Arby’s brand and the franchisee’s Arby’s branch without engaging in any other conflicting business.

You are not allowed to operate any other business in the territory of the selected franchise branch apart from Arby’s.

The franchisee is restricted to selling only the food and the non-alcoholic beverages that are designated in the franchise manual.

The product specifications and sources must also meet the quality of the standards mentioned in the same manual.

You are restricted from operating the Arby’s store during the previously determined operating hours and not outside of those hours.


Arby’s Franchise Financial Assistance

The franchisor does not offer any kind of direct or indirect financial assistance to their franchisees.

Any franchisee has to find the necessary funding themselves, and the franchisor doesn’t guarantee any kind of obligation.

A franchisee could get the necessary funding through either traditional funding methods such as loans or alternative funding methods that the franchisor agrees upon.


Arby’s Comparison

CompanyFranchise FeeRoyalty FeeInitial Investment
Jimmy John’s$30,000-$35,0006%$356,200-$674,200
Subway$10,000-$15,0008%$182,550-$506,900
Arby’s$12,5004-6.2%$861,950-$2.4 million

Conclusion

Arby’s is by far one of the biggest sandwich fast-food restaurant chains in the world, serving a variety of countries with over 3,000 stores.

The level of brand awareness Arby’s possesses makes it extremely easy for any franchise branch owner to succeed, no matter the location.

You are expected to spend anywhere between $861,950 and $2.4 million for Arby’s franchise branch.

They also provide you with continuous support, training, and other important things to ensure your success as a franchisee.

You first need to complete certain financial requirements to be eligible to be an Arby’s franchise.

If you can complete the requirements, all the things they offer and the brand itself are certainly a good investment to make. You might also want to look into the scrumptious Arby’s menu along with affordable prices.


Frequently Asked Question

Who is the CEO of Arby’s?

Since Arby’s is part of Inspire Brands, it’s run by Inspire Brand’s CEO, Paul Brown.

Paul Brown was the CEO of Arby’s until February 2018 and co-founded Inspire Brands and became the CEO of that company. 

Can you fail with an Arby’s franchise?

Yes, just like running any other business, if you can’t manage the store well, you have a chance of failing.

However, the likelihood is way lower because of the brand’s awareness.

What is the franchise fee for an Arby’s franchise?

The initial franchise fee is $12,500 for an Arby’s franchise. You pay this fee in the beginning, in a lump sum.

The franchise fee is also included in the initial investment number calculated by the company for an average franchise branch’s opening.

Where is Arby's headquartered?

Arby’s is headquartered in Sandy Springs, Georgia.

How many locations does Arby's has?

Arby’s is a leading global quick-service restaurant company operating and franchising over 3,400 restaurants worldwide.

Sources

https://www.subway.com/en-GE/OwnAFranchise/FranchisingFAQ

https://www.linkedin.com/in/brownpaulj/

https://en.wikipedia.org/wiki/Arby%27s

https://www.arbys.com/about-us/

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