Quick Service Restaurant Feasibility Study in the Charlotte-Concord-Gastonia, NC-SC Metro Area

Two out of three loans carry a franchise flag

In Charlotte, 67.5% of quick-service restaurant loans are franchised, a heavier franchise orientation than Dallas-Fort Worth shows for the same class. SBA approved 169 loans from FY2017 to FY2026, worth $79.9 million, ranking the area 29 of 779 nationally; the class is 2 of 39 locally. At 1.09x on the location quotient and with a $350,000 median, 1.13x the class's national figure, the market sits a little above the norm. The central half of tickets spans $200,000 to $593,100.

Programs and counties

SBA 7(a) has 152 loans and SBA 504 has 17. Mecklenburg County, NC, accounts for 92 loans, York County, SC, for 23, Cabarrus for 19, Union for 15, Gaston for 9 and Lancaster, SC, for 5. Approvals ran at 27 in FY2018 and 26 in FY2025 but dipped to 11 in FY2020 and in FY2022.

Holders

Business Expansion Funding Corporation holds 9 of the 504 loans for $5.7 million and Carolina Business Capital, Inc. holds 8 for $7.9 million. First among 7(a) holders is The Huntington National Bank at 20 loans and $6.8 million, then Stearns Bank National Association 10, Wells Fargo Bank National Association 7, Pinnacle Bank (TN) 6 and Celtic Bank Corporation 5. SBA identifies each holder as of today. The list is a registry of holdings and not a statement of lending practices.

Losses

Cancellations of at least 12.7% mark the FY2017 to FY2024 approvals, and at least 7.6% of the 79 funded loans approved FY2017 through FY2021 have been charged off so far. Both are minimums, since open loans may still fail. Two further measures, cancellation counting undisbursed loans and five-year charge-offs, are unpublished for Charlotte, and unpublished is not zero.

Testing a Charlotte-area drive-through or counter

Any plan for a franchised unit starts with the franchisor's disclosure of required investment and typical sales, then asks whether the chosen trade area can support another branded unit alongside the existing ones. The study should say whether the site is leased or owned, since the program mix includes some 504 loans. Drive-through layout and traffic counts deserve more weight than metro averages, and debt service coverage should be shown after royalties. The location of the site in North or South Carolina affects licensing and tax treatment. Mecklenburg, York and the other counties are placed with the July 2023 area definitions.