Arby's

The Arby's fee structure has two components: a $12,500 Development Fee paid when you sign the Development Agreement, plus a $37,500 franchise fee paid before construction begins. Combined, the franchisor-directed upfront cost is $50,000 per restaurant — comparable to Burger King ($50,000) and above McDonald's ($45,000). Non-traditional restaurants pay a lower $18,750 franchise fee.

The headline incentive for new development is significant: the NRO (New Restaurant Opening) Incentive waives the $37,500 franchise fee entirely for Development Agreements signed by March 31, 2026. That cuts the upfront cost to $12,500 per restaurant, plus a $25,000 cash rebate for Drive-Thru Only formats. For qualified buyers signing before the deadline, these incentives are meaningful.

For a freestanding leased location, total investment runs $862K to $2.45M — one of the wider investment ranges in this analysis. The variability lies in building construction ($400K–$850K), equipment ($225K–$325K), and site development costs. A non-freestanding location (inline, end-cap, or travel plaza) is more approachable at $645K to $1.37M.

The royalty is 4% of gross sales for traditional restaurants — among the lowest in QSR. Burger King charges 4.5%, McDonald's 5%. Under the NRO incentive, royalties start at just 0.5% in Year 1, ramping to 1% in Years 2–4, 2% in Year 5, and full 4% from Year 6. The aggregate advertising minimum is 5.2% of gross sales (combining the national fund at roughly 3.22–5%, local market at 0.2–1.98%, and local cooperative). Total fee burden at maturity: approximately 9.2% of gross sales, below the QSR average of 10–11%.

Arby's discloses AUV data for 2,219 franchised traditional restaurants in FY2024. Average AUV: $1.27M. Median: $1.19M.

Quartile breakdown shows reasonable distribution: - Top 25% (555 units): Average $1.86M, range $1.51M–$3.96M - Second 25%: Average $1.34M - Third 25%: Average $1.08M - Bottom 25%: Average $795K, with the lowest location at $369K

Freestanding restaurants averaged $1.26M; travel plaza locations hit $1.56M average; other non-freestanding averaged $1.08M. The average Arby's location has been operating for 25 years — implying favorable lease terms and established customer bases that new franchisees may not replicate immediately.

Arby's provides no profit disclosures — no COGS breakdown, no expense data, no net income or EBITDA. You're working with top-line revenue only. For a QSR with typical food costs around 28–32%, labor 28–33%, and occupancy 8–12%, an Arby's running $1.27M in AUV is probably generating $100K–$250K in four-wall EBITDA before royalties and debt service — but this requires independent modeling.

Arby's U.S. franchised system is contracting slightly. The franchised count went from 2,305 in 2022 to 2,316 in 2023 to 2,286 in 2024 — net -30 over two years. More concerning, 2024 saw 34 permanent closures against 33 new openings, the first year where closures exceeded openings. Company-owned locations declined from 1,110 in 2022 to 1,079 in 2024, also contracting.

The system's total footprint of 3,365 restaurants (franchised + company-owned) is down from 3,415 in 2022. This isn't freefall, but it's the picture of a mature brand managing gradual contraction rather than driving growth. The NRO incentive program appears designed to reverse this trend — the question is whether it works before the March 2026 deadline lapses.

The NRO incentive is time-limited. If you're considering Arby's, the window to lock in a waived franchise fee and ramped royalties (starting at 0.5%) closes March 31, 2026. The difference between signing before and after that date could be $37,500 in upfront fees and roughly $35,000–$50,000 in cumulative royalty savings over the first five years on a median-volume location.

The development agreement's site selection process requires a $2,500 extension fee for each 180-day extension if you haven't found an approved site. Zoning and permitting alone can run $1,000–$112,000 — the high end is not a hypothetical; it represents real municipality variability.

Arby's training fee of $2,100 per manager (waived for first three in Restaurant 1) adds up for operators scaling to multiple locations. The transfer fee for a first-time seller is $17,500 — among the higher QSR transfer fees in this analysis.