Feasibility Study Company Independent Feasibility Analysis

Quick-Service / Fast-Food Restaurants · Asset Class

Quick-Service & Fast-Food Restaurant Feasibility & Market Studies

Independent, lender-grade analysis for QSR franchise projects across SBA 7(a) and 504, conventional and bank, CMBS and net-lease, USDA Business and Industry, and bridge capital. This page is our standing read on quick-service and fast-food franchise unit economics, why ramp and FDD Item 19 forecasts fail review, the SBA Franchise Directory gate, and the difference between valuing a QSR as a going-concern operating business and as net-lease real estate.

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$416B
2026 U.S. fast-food industry size1
70%+
Off-premise share of sales at leading brands4
$20/hr
California fast-food wage floor, AB 122814
6.80%
Franchisee-guaranteed QSR net-lease cap rate6
The QSR Thesis

A QSR franchise is a business, not a building.

A quick-service restaurant unit is a going-concern foodservice operating business valued on cash flow and business-enterprise value, not passive real estate, and the organizing lens is the franchise model, franchisee-versus-franchisor economics. The franchisee operates under a brand governed by a Franchise Disclosure Document, paying an initial franchise fee commonly $25,000 to $50,000, an ongoing royalty of roughly 4 to 6 percent of sales, and an ad-fund contribution of roughly 2 to 4 percent. That 6-to-10-percent-plus load comes off the top, compressing a four-wall margin already pressured by prime cost, food plus labor, of roughly 55 to 65 percent of sales.727 We prepare the market study, the feasibility study, and the going-concern appraisal input a QSR file needs, aligned to the standard that will judge it.

The critical distinction lenders miss is that the operating franchise and the underlying real estate are two different assets with two different values. QSR is the premier net-lease and single-tenant (STNL) tenant category, but that real-estate value is separate from the operating business. Per the Boulder Group's Q1 2026 report, a McDonald's ground lease trades at 4.40 percent and a Chick-fil-A ground lease at 4.50 percent, all corporate QSR at 5.82 percent, and all franchisee QSR at 6.80 percent, a roughly 98-basis-point spread that prices the difference between franchisor covenant and franchisee operating credit.6 The same physical drive-thru can carry a going-concern value on its cash flow and a very different real-estate value on its lease.

Two forces are institutionalizing the borrower base. Consolidation into large multi-unit operators and private-equity platforms is the dominant one, Flynn Group, the world's largest franchisee, now runs roughly 2,745 units on about $4.5 billion in sales,1112 and SBA is the dominant financing channel, with the Franchise Directory reinstated under SOP 50 10 8.22 What follows is organized as a working desk: a national and site-feasibility monitor, the ramp and Item 19 failure forensics that sink QSR studies, the capital-source routing that decides which deliverable a project needs, and the study-type distinctions competitors state loosely. Every figure is dated and attributed in the sources below.

The Unit-Economics & Site Monitor

Where QSR feasibility stands, market type by market type.

A feasibility read for the major U.S. market types, organized by the variables that decide a QSR site: traffic and daytime population, drive-thru suitability and site availability, competition and saturation, and the labor and minimum-wage environment. Metro-level QSR unit economics are largely proprietary, so this is a framework, not a dataset; treat single-provider figures as flagged.

The national picture frames every site. The U.S. fast-food category is large but measured inconsistently: IBISWorld puts the Fast Food Restaurants industry at $416.0 billion in 2026 across roughly 223,000 businesses, while narrower QSR-market research clusters near $301 billion for 2025 and one estimate lands at $195.3 billion for 2024 on a different basis, a data-quality divergence to flag rather than reconcile.12 At the umbrella level the National Restaurant Association projects total restaurant and foodservice sales of $1.5 trillion in 2025 and $1.55 trillion in 2026, and there are more than 200,000 QSR locations among roughly 691,181 chain restaurant locations counted in 2024.3128 Food-away-from-home spending reached a record 55.1 percent of food spending in 2023 and held near 55 percent in 2024, and the chained or franchised structure captured about 52.34 percent of the QSR market in 2025.164 Off-premise formats now account for more than 70 percent of revenue at leading brands, with drive-thru's share of QSR orders easing from 83 percent in 2020 to about 65 percent in 2025 as dine-in and delivery recovered.45 The result is a resilient, structurally franchised category whose site-level feasibility turns entirely on local traffic, drive-thru suitability, saturation, and the wage environment.

Feasibility read: Favorable Selective Pressured Traffic-dependent. The read is an opportunity signal, not a data series; the single most consequential geographic cost variable is the minimum-wage environment.
Market type Drive-thru & site availability Competition / saturation Labor & minimum wage Feasibility read
High-cost coastalCA, NYC, Seattle, BostonUrban infill favors walk-up / delivery; drive-thru pads scarce and expensiveHigh saturation; premium rentsHighest: CA $20 floor (AB 1228)LA $17.24, SF $18.67, San Jose $17.55Pressured
Sun Belt suburbanTX, FL, GA, AZ, NCBest drive-thru suitability; pad sites available; construction ~5–15% below national in TXGrowing but less saturated in exurbsLower-cost; state minimums near federalFavorable
MidwestOH, IL, IN, MIGood drive-thru suitability; costs near national averageMature, saturated legacy marketsModerateSelectiveReplacement / remodel-driven
Mountain WestDenver, SLC, BoiseGood pad availability; construction ~10–20% above nationalLess saturatedModerate-to-risingSelectiveGrowth; watch construction cost
Rural / small-townAmple land, easy drive-thru; lower rent; USDA B&I eligibleLow competition but low volumeLow labor costTraffic-dependent

Market-type framework compiled from the regional matrix in the underlying monitor, with wage figures from the Cato Institute (November 2025), construction-cost bands from Terrapin Construction Group and WFO Construction (2026), and drive-thru and off-premise figures from Mordor Intelligence and Revenue Management Solutions (2025–2026); see sources 4, 5, 14, 26, and 27. Metro-level QSR unit economics are not publicly disclosed by brand and must be sourced from franchisor regional data or a site-specific study.

AUV is a revenue number, not profit, and it diverges wildly by brand

No figure in QSR is more misread than average unit volume. The QSR 50, on year-end 2023 data, put Chick-fil-A near $7.45 million, Raising Cane's near $5.69 million, McDonald's near $4.0 million, Whataburger near $3.96 million, Culver's near $3.49 million, Taco Bell near $2.1 million, and Wendy's near $2.06 million, while Subway's AUV sits near $490,000.820 McDonald's 2024 FDD reported average annual sales of $3,966,000 for franchised traditional restaurants against a median of $3,797,000, Chick-fil-A reported a 2025 median freestanding AUV of $9,087,673, and Wingstop grew system-wide sales 32 percent year over year with AUV above $6.5 million across 828 units and 72 percent of orders digital.91021 But AUV is revenue, not profit: a $3 million unit at a 6 percent margin ($180,000) is less profitable than a $1.2 million unit at a 20 percent margin ($240,000). AUV must be paired with margin analysis, never read alone.

The franchise load comes off the top

A QSR franchisee's P&L carries three franchise-specific costs above operating expense. Royalties run roughly 4 to 6 percent of gross sales, McDonald's charges a 4 percent service fee (moving new U.S. and Canada units to 5 percent from 2024), Burger King 4.5 percent, Wendy's 4 percent, Popeyes 5 percent, KFC 5 percent, Taco Bell 5.5 percent, Wingstop 6 percent, and Subway 8 percent, the highest in mainstream QSR.79 Ad-fund contributions add roughly 2 to 4 percent, taking McDonald's combined load to 8 percent, among the highest in major QSR, and Subway's total royalty-plus-ad to 12.5 percent, described as punishing against a sub-$500,000 AUV.19 Initial franchise fees commonly run $25,000 to $50,000, McDonald's $45,000, Wendy's $40,000, Taco Bell $25,000 to $45,000, Subway $15,000, and Chick-fil-A $10,000.920 Agreement terms are long, McDonald's traditional term is generally 20 years with no right to renew, and Wendy's current agreement provides a 20-year term with a 10-year renewal.918 Underneath the load, prime cost runs roughly 55 to 65 percent of sales, four-wall EBITDA lands in the 12-to-30-percent range for well-run units, a 6 percent royalty alone reduces franchisee cash earnings by 15 to 25 percent, and all-in development for an 1,800-square-foot freestanding drive-thru unit runs roughly $1.3 to $2.5 million, or about $220 to $580 per square foot, before land.27726

Consolidation, net-lease pricing, and the guarantor split

The borrower base is institutionalizing. Multi-unit operators now control about 54 percent of U.S. franchised units, and Flynn Group, the world's largest franchisee, grew from 2,520 units in 2024 to 2,745 in 2025, with about $4.5 billion in annual sales and roughly 75,000 employees across seven brands, a scale built on the transformative 2021 acquisition of the bankrupt NPC International (937 Pizza Hut and 194 Wendy's units), the largest franchisee-to-franchisee deal in U.S. history at the time.11128 Billion-dollar operators Dhanani Group (~$1.732 billion), Sun Holdings (~$1.59 billion), and KBP Brands (~$1.436 billion) sit behind it, and Restaurant Brands International bought Carrols (1,023 Burger King and 59 Popeyes units) for about $1.0 billion in May 2024, committing a further $500 million to reimage more than 600 restaurants.1713 Multi-unit platforms of five-plus units trade near 5 to 7x EBITDA and 20-plus-unit Wingstop platforms at 7 to 8x, PE roll-ups buy near 5.5x and exit at 7 to 9x, and Roark Capital's franchisor-level Subway acquisition closed April 30, 2024 near $9.6 billion, about 10 to 12x EBITDA.728 On the real-estate basis, QSR is the tightest-priced net-lease retail category, with McDonald's ground leases at 4.40 percent, Chick-fil-A at 4.50 percent, all corporate QSR at 5.82 percent, and franchisee QSR at 6.80 percent, a spread that is purely a function of the guarantor.6

Common Review Failures

How QSR feasibility and ramp forecasts fail review.

Sales ramp, the franchise load, and labor are the variables a credit committee scrutinizes most, and the places QSR studies most often break. Each failure below is tied to a real mechanism or number.

  1. Day-one AUV instead of a ramp curve

    A new unit typically ramps over one to three years and rarely opens at the Item 19 system average. Assuming day-one AUV at or above the disclosed average is the most common feasibility error; the fix is to underwrite an explicit ramp curve and stress the trough year against debt service.7

  2. Mis-reading FDD Item 19

    Item 19 is a franchisor-reported, voluntary, survivorship-biased representation of open units, not a guarantee under the FTC Franchise Rule. Read median against average, McDonald's 2024 median was $3,797,000 versus a $3,966,000 average, examine top versus bottom quartile, and treat a brand with no Item 19 disclosure, such as Subway, as a flag in itself.919

  3. Understating the royalty and ad-fund load

    Mis-modeling the 6-to-10-percent-plus royalty-and-ad load produces an overstated four-wall margin. After royalty of 4 to 6 percent, an ad fund of 2 to 4 percent, and rent, a thin margin can evaporate; a 6 percent royalty alone cuts franchisee cash earnings 15 to 25 percent. Model the load explicitly, off the top.7

  4. Labor and wage risk, the number-one issue

    Labor runs roughly 25 to 35 percent of sales, and minimum-wage increases hit it directly, above all California's $20 fast-food floor under AB 1228, effective April 2024. One California McDonald's franchisee family reported cutting about 170,000 labor hours in response. The employment effect is genuinely contested, UC Berkeley's IRLE found no employment loss and price increases near 1.5 percent, while an NBER working paper estimated about 18,000 lost California fast-food jobs, so present it as competing evidence and underwrite the wage floor and staffing plan directly.141528

  5. Third-party-delivery margin dilution

    Delivery commissions of 15 to 30 percent, with effective all-in costs of 30 to 40 percent, can erase a QSR's thin margin on the delivery channel. A heavy delivery-versus-dine-in mix without a menu-price offset destroys unit profitability; confirm the delivery mix and pricing strategy.4

  6. Drive-thru throughput and site-suitability errors

    Drive-thru accounts for more than 70 percent of sales at leading brands, so a site with poor stacking, access, or lane configuration caps throughput and volume, a single lane clears about 120 cars per hour against 180-plus for a dual lane. Circulation and stacking capacity are feasibility-critical, not cosmetic.427

  7. Territory, encroachment, and franchisor health

    Non-exclusive territories invite cannibalization, Subway's are cited as a driver, and even McDonald's reportedly caps operator volume by opening nearby units as a store nears $6 million. Franchisor deterioration is a live risk: Subway posted multiple years of net unit closures. Confirm territory and encroachment protection in the agreement and read the Item 20 unit-count trend.1921

Capital-Source Routing

Which channel funds the project, and what it requires.

QSR routes through distinct capital sources, and each requires a different deliverable and standard. The study is built to the union of requirements across the channels actually in play, and the first questions are always whether the deal is a single unit or a platform, and whether it is the operating business or the real estate being financed.

The QSR lender matrix
Deliverable and coverage or eligibility convention by capital source. Coverage figures are market conventions, not universal minimums.7
Capital sourceDeliverableCoverage / eligibility convention
SBA 7(a)Going-concern feasibility; franchise fee, buildout, equipment, working capitalFranchise Directory listing; $5M cap; 10% equity, min score 165
SBA 504Owner-occupied real estate51% existing / 60% new owner-occupancy
Conventional / bank / specialty franchiseMUO & PE-platform facilitiesEBITDA-based; consolidated leverage
Net-lease / CMBS (STNL)Real-estate-only, tenant / guarantor creditCorporate ~4.40–4.50% vs franchisee ~6.80% cap
USDA B&I (rural)Owner-operated business feasibilityPopulation & location tests; guarantee by size
Bridge / hard moneyAcquisition, development, or remodel planShort term, transitional risk

Sources: SBA SOP 50 10 8; The Boulder Group Q1 2026 Net Lease Research Report; USDA Business & Industry program terms; CT Acquisitions (2026). See sources 6, 7, and 22.

One gate is worth stating plainly, because it is binary: SBA eligibility runs through the Franchise Directory. Under SOP 50 10 8, effective June 1, 2025, the SBA reinstated the Directory, and a brand must be listed, with the franchisor having executed the new SBA Franchisor Certification, for streamlined eligibility, brands listed as of May 2023 had until July 31, 2025 to comply or face removal.22 The same SOP restored pre-2023 underwriting, collateral required above $50,000, a 10 percent equity injection for start-ups and changes of ownership, a minimum business credit score of 165, tax-transcript verification, and 100 percent U.S. citizen or lawful-permanent-resident ownership, and multi-brand franchisees must clear eligibility for each brand independently.22 FRANdata flagged rising early-default rates, businesses failing within 18 months, at 1.4 percent against a 0.6-to-0.8-percent historical average, even as 7(a) volume ran up 40 percent year to date.11 Because brand-specific SBA default history varies enormously, from under 5 percent for the strongest brands to above 40 percent for the weakest, and above 90 percent in extreme legacy cases, Directory status and brand default history are the central underwriting gates.232425

  • Owner-operated single unit or small franchiseeSBA 7(a) for the franchise fee, buildout, equipment, and working capital, subject to Franchise Directory listing.
  • Owner-occupied QSR real estateSBA 504 for the real estate, under the 51% existing / 60% new occupancy test.
  • Multi-unit operator or PE-backed platformConventional bank and institutional facilities; the $5 million 7(a) cap constrains scale.
  • Net-lease drive-thru pad (STNL)CMBS or net-lease capital on tenant and guarantor credit; corporate-versus-franchisee guarantee drives pricing.6
  • Rural owner-operated unitUSDA Business & Industry, subject to population and location tests.
Study Types

Market study, feasibility study, appraisal: three questions.

These three documents answer different questions and are not substitutes. Borrowers and brokers conflate them constantly; SBA lenders and credit committees do not.

What each document answers, and the standard that governs it.
DocumentQuestion answeredGoverning standard
AppraisalWhat is it worth? A going-concern / business-enterprise value via the income approach (EBITDA or SDE multiple), allocated to real property, FF&E, and franchise intangible.USPAP
Market studyIs there demand? Trade area, traffic and daytime population, the competitive set, saturation, and drive-thru suitability.Trade-area demand analysis
Feasibility studyDoes it pencil? Projected AUV and ramp, prime cost, the franchise load, four-wall and franchisee-net economics, and debt-service coverage.Lender underwriting + FDD Item 19 read

The distinction that governs a QSR file is that the operating unit and the real estate are two different assets. A going-concern QSR is valued as a business through the income approach on cash flow, an EBITDA or SDE multiple, with the total business value allocated among the real property or leasehold, the equipment and FF&E, and the intangible business and franchise value, the franchise agreement and brand. That is fundamentally different from a single-tenant net-leased (STNL) QSR, a ground-leased or NNN drive-thru pad, which is valued as real estate on the tenant and guarantor credit and the lease, at a cap rate. The same physical building can carry two very different values depending on whether it is analyzed as an operating going concern or a leased real-estate asset, and whether the lease is corporate-guaranteed or franchisee-guaranteed. Single-unit owner-operator deals price on SDE, multi-unit groups on EBITDA, and net-leased pads on a cap rate, three bases that must never be conflated.

One scope boundary is worth stating. QSR is generally a low-environmental-risk use, but a lender will typically expect a standard Phase I Environmental Site Assessment, with attention to prior site uses such as gas stations or dry cleaners and to grease and underground issues. The feasibility or market-study author does not perform the Phase I or II ESA; that is a separate environmental professional's engagement. The market and feasibility work projects AUV and ramp, models the franchise load and four-wall and franchisee-net economics, and sizes debt service through the trough; it does not opine on environmental condition.

QSR sub-segments, each with a distinct study scope

QSR Questions

Quick-service restaurant feasibility and market-study questions.

What is the difference between a QSR market study and a feasibility study?

A market study assesses demand for a site: trade area, traffic and daytime population, the competitive set, QSR saturation, and drive-thru suitability. A feasibility study goes further, testing whether a specific franchise unit pencils, projected average unit volume (AUV) and a one-to-three-year ramp, prime cost, the franchise royalty and ad-fund load, four-wall and franchisee-net economics, and debt-service coverage through the ramp trough. It answers whether the deal covers its debt for this lender. Because a QSR franchise is a going-concern operating business rather than passive real estate, the feasibility work centers on cash flow, not on the building alone.

Is a QSR franchise valued as a business or as real estate?

Both, but on two different bases that must never be conflated. The operating franchise unit is valued as a going concern through the income approach on cash flow (an EBITDA or SDE multiple), with the total business-enterprise value allocated among the real property or leasehold, the equipment and FF&E, and the intangible franchise and brand value. A single-tenant net-leased (STNL) drive-thru pad is valued instead as real estate, at a cap rate on the tenant and guarantor credit and the lease. The same physical building can carry two very different values depending on whether it is analyzed as an operating going concern or as a leased real-estate asset, and whether the lease is corporate-guaranteed or franchisee-guaranteed.

Can a QSR franchise be financed with an SBA loan?

Yes. QSR franchises are among the most common SBA 7(a) uses, and because QSR real estate is often leased, 7(a) is the dominant vehicle for the franchise fee, buildout, equipment, and working capital, with 504 used for owner-occupied real estate under the 51 percent existing and 60 percent new-construction occupancy tests. Eligibility runs through the SBA Franchise Directory: under SOP 50 10 8, effective June 1, 2025, the SBA reinstated the Directory, and a brand must be listed, with the franchisor having executed the new SBA Franchisor Certification, for streamlined eligibility. Multi-brand franchisees must clear eligibility for each brand independently, and change-of-ownership deals require a business valuation and a going-concern appraisal.

What is FDD Item 19, and why does it matter to lenders?

Item 19 of the Franchise Disclosure Document is the franchisor's voluntary financial performance representation, and Item 7 is the estimated initial investment. Item 19 is the starting point for a revenue assumption, but it is voluntary under the FTC Franchise Rule, survivorship-biased because it reflects only open units, and expressly not a guarantee. Average, median, and top-quartile figures differ materially: McDonald's 2024 disclosure reported average annual sales of $3,966,000 against a median of $3,797,000, and some brands, notably Subway, make no Item 19 disclosure at all, which is itself a flag. A defensible underwriting AUV is tied to the specific site, not to the system average.

How much does it cost to open a QSR, and what is the franchise load?

All-in development for an 1,800-square-foot freestanding QSR with a drive-thru runs roughly $1.3 million to $2.5 million, with ground-up prototypes at about $220 to $580 per square foot depending on metro, before land. On top of operating costs, the franchisee P&L carries three franchise-specific charges: an initial franchise fee commonly $25,000 to $50,000, an ongoing royalty of roughly 4 to 6 percent of sales, and an ad-fund contribution of roughly 2 to 4 percent. That combined 6-to-10-percent-plus load comes off the top, ahead of rent, and compresses a four-wall margin already pressured by prime cost, food plus labor, of roughly 55 to 65 percent of sales.

Which QSR markets are most favorable for new units?

Sun Belt suburban markets, Texas, Florida, Georgia, Arizona, and North Carolina, are the primary QSR growth corridor: car-centric demographics favor drive-thru pad development, pad sites are available, and construction cost runs below the national average, with Texas roughly 5 to 15 percent below. High-cost coastal metros carry a structurally higher labor-cost floor, epitomized by California's $20 fast-food minimum wage, and scarce, expensive drive-thru pads. Midwest markets are mature and largely replacement-driven, the Mountain West offers growth with above-average construction cost, and rural sites offer easy drive-thru development and USDA Business and Industry eligibility but depend on capturing highway and daytime traffic.

What cap rate does net-leased QSR real estate trade at?

QSR is the tightest-priced net-lease retail category, and it splits sharply by guarantor credit. Per the Boulder Group's Q1 2026 Net Lease Research Report, a McDonald's ground lease traded at 4.40 percent and a Chick-fil-A ground lease at 4.50 percent, all corporate-guaranteed QSR at 5.82 percent, and all franchisee-guaranteed QSR at 6.80 percent, a roughly 98-basis-point headline spread that reflects the difference between franchisor covenant and franchisee operating credit. Shorter-term, non-rated restaurant tenants can trade 200 to 300 basis points wider. For a lender financing the real estate rather than the operating business, that guarantor distinction is the core underwriting variable.

By Market

Quick-service restaurant feasibility studies by state.

QSR demand, drive-thru suitability, and the wage environment are local. Explore the state markets where traffic, saturation, and the minimum-wage floor determine whether a unit pencils.

Underwriting a QSR franchise? Start with the unit economics.

Feasibility Study Company prepares independent Quick-Service Restaurant feasibility and market studies, built to the review standard your capital source applies. A methodology briefing walks through the analytical framework, the deliverable your capital source requires, and the current AUV, franchise-load, and net-lease data for your brand, format, and trade area.

Request a methodology briefing
Sources

Data sources and dates.

Every figure on this page traces to a named authority. QSR readings are point-in-time and vendor-dependent; market-size, AUV, and default-rate figures differ by basis and period, and single-provider items are flagged, as noted throughout.

  1. IBISWorld (March 2026, with September 2025 chicken segment): U.S. Fast Food Restaurants industry $416.0 billion in 2026 across ~223,000 businesses, 2.3% CAGR 2021–2026 with a forward five-year decline projected; Fast Food Chicken Restaurants $63.7 billion in 2026; more than 200,000 QSR locations (cited 2025).
  2. Custom Market Insights (2025): QSR market ~$301 billion for 2025; IMARC (2025): $195.3 billion for 2024 on a different NAICS basis. Provider divergence on market size flagged, not reconciled.
  3. National Restaurant Association, 2025 State of the Restaurant Industry (February 6, 2025): restaurant and foodservice sales of $1.5 trillion and 200,000+ net new jobs in 2025 (total foodservice employment 15.9 million); 2026 report projecting $1.55 trillion (+4.8%) and 75% of adults citing value as a top limited-service priority (NRA via Restaurant Dive, 2025).
  4. Mordor Intelligence (2025–2026): off-premise over 70% of revenue at leading brands, digital 40%+ of chain transactions, chained/franchised structure ~52.34% of the QSR market (2025), meat-based concepts 37.18% (2025), and third-party-delivery commissions 15–30% (effective 30–40%). Single-provider figures treated as indicative.
  5. Revenue Management Solutions (2025): drive-thru's share of QSR orders down from 83% in 2020 to ~65% in 2025 as dine-in and delivery recovered; takeout traffic up 15.5% year over year in Q2 2025.
  6. The Boulder Group, Q1 2026 Net Lease Research Report: McDonald's ground lease 4.40%, Chick-fil-A ground lease 4.50%, all corporate QSR 5.82%, all franchisee QSR 6.80% (a ~98 bps headline spread compressing to ~72–90 bps controlling for term and location, per apers.app); Jimmy Goodman commentary that shorter-term, non-rated restaurant tenants can trade 200–300 bps wider.
  7. CT Acquisitions (2026): royalty (4–6%) and ad-fund (2–4%) ranges, Subway 8% the highest, combined load 7–12%+; a 6% royalty cutting franchisee cash earnings 15–25%; multi-unit groups (5+ units) at ~5–7x EBITDA and 20+ unit Wingstop platforms at 7–8x; PE roll-ups buying ~5.5x and exiting 7–9x with a 0.5–1.5x MUO multiple premium; and the FTC-Rule Item 19 caveat.
  8. QSR Magazine, QSR 50 (year-end 2023 data): AUV of Chick-fil-A ~$7.45M, Raising Cane's ~$5.69M, McDonald's ~$4.0M, Whataburger ~$3.96M, Culver's ~$3.49M, Taco Bell ~$2.1M, Wendy's ~$2.06M; Flynn Group ~75,000 employees (2024).
  9. McDonald's 2025 FDD via Franchise Chatter (October 2025): 2024 Item 19 average annual sales $3,966,000, median $3,797,000, high $19,680,000, low $914,000; FranchiseOverview (McDonald's 2024 FDD): 4% service fee plus not less than 4% marketing, 20-year term with no right to renew, $45,000 franchise fee; SharpSheets (2025): new U.S./Canada units moving to a 5% royalty from 2024.
  10. 99businessideas citing the 2026 FDD: Chick-fil-A 2025 median freestanding AUV $9,087,673; Chick-fil-A's atypical operator model ($10,000 fee, no owned real estate or equipment, a ~15% service charge and roughly 50% profit split, effectively annual agreement, no transferable equity), widely reported by third parties and treated as indicative rather than Item 19-disclosed.
  11. FRANdata Multi-Brand 50 via franchising.com (May 2025): Flynn Group 2,520 units (2024) to 2,745 units (2025); multi-unit operators controlling ~54% of U.S. franchised units (cited 2026); FRANdata (2025) flagging early-default rates (failing within 18 months) of 1.4% versus a 0.6–0.8% historical average, with 7(a) volume up 40% year to date.
  12. Restaurant Business Online and QSR Magazine (2024): Flynn Group ~$4.5 billion annual sales across seven brands (Applebee's, Arby's, Panera, Pizza Hut, Taco Bell, Wendy's, Planet Fitness); the 2021 acquisition of the bankrupt NPC International (937 Pizza Hut, 194 Wendy's), the largest franchisee-to-franchisee deal in U.S. history at the time; a reported $5B+ majority-stake exploration (Reuters via QSR Magazine, 2024), prospective as of 2024.
  13. Restaurant Brands International, Form 8-K (SEC, May 16, 2024): acquisition of Carrols Restaurant Group (1,023 Burger King and 59 Popeyes units) at $9.55 per share, ~$1.0 billion aggregate enterprise value, plus a further $500 million committed to reimage more than 600 Carrols restaurants.
  14. Cato Institute (November 2025): California AB 1228 raising the fast-food minimum wage from $16 to $20/hour effective April 1, 2024 for chains with 60+ locations nationwide; local rates Los Angeles $17.24, San Francisco $18.67, San Jose $17.55 (July 2024); Clemens, Edwards & Meer (NBER working paper, 2025) estimating ~18,000 lost California fast-food jobs.
  15. UC Berkeley Institute for Research on Labor and Employment, Michael Reich (February 24, 2025): AB 1228 raising covered-worker wages 8–9% with no negative fast-food employment effect and price increases of ~1.5% (“about 6 cents on a four-dollar hamburger”); a UC Santa Cruz field study reporting higher prices, fewer jobs, and accelerated automation. Competing estimates, presented as contested.
  16. USDA Economic Research Service via Escoffier and the American Farm Bureau (2024–2025): food-away-from-home at a record 55.1% of food spending in 2023, near 55% in 2024, with FAFH spending of $1.539 trillion in 2024; limited-service holding 38% of away-from-home spending versus 29% for full-service in 2020.
  17. Franchise Times Restaurant 200 (2023): Dhanani Group ~$1.732 billion (554 Burger King, 388 Pizza Hut, 383 Popeyes); Sun Holdings ~$1.59 billion (Arby's, Papa John's, Popeyes, Burger King, Applebee's, McAlister's, IHOP); KBP Brands ~$1.436 billion (684 KFC and others).
  18. The Wendy's Company, Form 10-K (FY2024): 5,552 franchised U.S. units as of December 29, 2024; Current Franchise Agreement providing a 20-year term with a 10-year renewal; Wendy's not currently accepting most new domestic franchise applications.
  19. franchiseinvestordata (2026): McDonald's 8% combined royalty-plus-ad load among the highest in major QSR; Subway's 12.5% total royalty-plus-ad described as “punishing” against a sub-$500K AUV, its absence of an Item 19 disclosure flagged, and its non-exclusive territories cited as a cannibalization driver.
  20. franchisecostcalc (2026): Subway AUV ~$490,000; Domino's total investment $156,450–$682,500 with AUV ~$1.3M. Jack in the Box Franchising (2026): AUV ~$2.03M, $1,909,500–$4,041,500 to open (land excluded), $50,000 franchise fee. LiveAbout and smallbiztrends (2026): Taco Bell standalone $1.2M–$2.5M with a $25,000–$45,000 fee; Wendy's $310,000–$615,000 with a $40,000 fee.
  21. dealground.com reading of the 2025 QSR 50: Wingstop system-wide sales +32% year over year, AUV above $6.5M across 828 units, 72% digital; McDonald's reportedly capping operator volume by opening nearby units as a store nears $6M. 2025 QSR 50: Jersey Mike's 2,989 stores with AUV $1.339M (up from $825,000 in 2016); Taco Bell targeting 60% digital sales by 2030.
  22. U.S. Small Business Administration, SOP 50 10 8 (effective June 1, 2025), via Starfield & Smith, Taft Law, Baker McKenzie, McDonald Hopkins, and Congress.gov CRS (2025): reinstatement of the Franchise Directory (brands listed as of May 2023 to execute the new SBA Franchisor Certification by July 31, 2025 or face removal); per-brand eligibility for multi-brand franchisees; and restored pre-2023 underwriting (collateral above $50,000, 10% equity injection, minimum business credit score 165, tax-transcript verification, 100% U.S. citizen/LPR ownership, change-of-ownership business valuation and going-concern appraisal).
  23. FitSmallBusiness (July 2024), FY2020–FY2023 SBA data (minimum 25 loans): Subway 0.82% (2 of 244), Domino's 0.70% (1 of 143), Jersey Mike's and Scooter's Coffee 0%; all-franchise 7(a) default 17.28% and top-20 most-funded brands ~0.21%. Young, partly PPP-era cohorts, treated cautiously. vetmyfranchise (2026): brand default rates ranging from under 5% to above 40%.
  24. William Bruce / SBA data (10-year period ending September 30, 2018, minimum 10 loans): Five Guys and Culver's ~15%, Subway 20%, Taco Bell 21%, Little Caesars 22%, Wingstop 22% on the “best” side; Noble Roman's Pizza 92%, Pita Pit 63%, Atlanta Bread 60%, and Dickey's Barbecue 54% on the “worst.”
  25. CNN Money (Catherine Clifford, via Internicola Law Firm), 2000s-decade SBA data: Subway 7% on 2,292 loans, Quiznos 25%, Dairy Queen 8%, Dunkin' Donuts 8%; The Wall Street Journal (2004–2013): Quiznos 30% default and ~$38 million in charge-offs preceding its March 2014 bankruptcy. GAO-13-759 and the SBA's last consolidated franchise loan-loss list (2011) are the authoritative primary sources; most brand-level lists are secondary.
  26. Terrapin Construction Group (2026): all-in $1.3M–$2.5M for an 1,800 SF freestanding QSR with drive-thru; ground-up prototypes $220–$580/SF; regional cost variation 25–50% (Southeast 10–20% below, Northeast 30–50% above, West Coast 20–40% above); soft costs adding 15–30%. WFO Construction (January 2026): Jacksonville ground-up $275–$450/SF and TI $175–$325/SF.
  27. qsr.pro (2026): single drive-thru lane ~120 cars/hour versus dual lane 180+; Dutch Bros ~$1.38M AUV across ~900 units. culta.ai / NRA (2026): prime cost 55–65% of sales, food cost 25–30%, labor 25–28% for QSR (25–35% industry-wide). paperchase.ac (2026): well-run four-wall EBITDA at the higher end of a 12–30% restaurant range. Single-provider figures flagged.
  28. Ad Astra (2026): Roark Capital's Subway acquisition closing April 30, 2024 at ~$9.6 billion, ~10–12x EBITDA including earn-out. Restaurant Dive (December 2025): beef costs and tariffs flagged as 2026 food-cost pressures. CNN (May 2025): one California McDonald's franchisee family reporting ~170,000 cut labor hours. Technomic Ignite via Nation's Restaurant News (2025): ~691,181 chain restaurant locations across all segments in 2024.