Coffee Shop Feasibility Study in North Carolina

North Carolina's franchise-led coffee lending

Franchises account for 52.3% of North Carolina's coffee shop and snack bar loans, which makes the brand system the central fact of this market. The state approved 222 loans worth $84.8 million from FY2017 to FY2026, ranking 13 of 53 among states; the class is 7 of 39 by loans within North Carolina, with a location quotient of 1.24x. The median loan is $300,000, or 1.25x the national median, with half of North Carolina approvals between $121,250 and $485,825.

Lenders and the Wake and Mecklenburg markets

North Carolina coffee borrowers used SBA 7(a) for 218 loans and SBA 504 for just 4. The Huntington National Bank leads with 30 loans for $8.1 million; Wells Fargo Bank National Association holds 12 for $1.3 million, Carolina Small Business Development Fund 11 for $2.4 million, and TowneBank and Citizens Bank 10 apiece, TowneBank's totalling $8.0 million. Wake County has 53 loans and Mecklenburg 39, far ahead of Durham with 13 and Buncombe with 11. FY2025 was the peak, with 41 loans worth $24.0 million.

Losses are the figure to watch

Charge-offs are substantial: 10.1% of the 79 North Carolina loans funded in FY2017 to FY2021 are written off already, and 8.9% failed inside five years, putting most North Carolina losses early in the term. Both are floors while loans are open. Cancellations are milder, a floor of 11.4% on FY2017 to FY2024 approvals, 12.0% at the ceiling. A borrower's plan has to show that a $300,000 midpoint loan can be carried from the first months.

For North Carolina, the study must check the franchisor's unit economics against the North Carolina site itself: traffic, visibility, drive-through stacking if any, and nearby competitors in Wake or Mecklenburg, where so much of the lending sits. The cancellation floor of 11.4% and the 12.0% ceiling show that a share of approvals never reach funding, so site control and permits should be in hand before closing. That cohort of 79 funded loans is a modest base, so the 10.1% and 8.9% are best read as floors on a small sample. Cost includes franchise obligations, equipment, build-out and an opening reserve sized for a slow start. Debt service coverage should hold at the sales a new unit actually reaches in its first year, not at system averages. If the loan buys the pad, the appraisal should show the pad's value apart from the franchise. Each lender listed is the loan's current holder in SBA's records.