Quick Service Restaurant Feasibility Study in the Dallas-Fort Worth-Arlington, TX Metro Area

Franchise country with heavy tickets

Franchised concepts make up 61.4% of the Dallas-Fort Worth-Arlington area's SBA loans for the class. From FY2017 to FY2026 SBA approved 726 loans, worth $426.9 million in gross dollars, and the area stands third in the national count of 779 metro and micro areas, 3 of 779, while the class is the area's 2 of 39. The location quotient of 1.36x shows quick-service concepts claiming more of local approvals than of the national book; the median loan runs at 1.28x the national median.

Sizes, programs and where the loans sit

The median loan is $397,850, with the middle half running from $225,900 to $658,150. Nearly all are SBA 7(a), 708 against 18 under SBA 504. Tarrant County leads with 212 loans, ahead of Dallas County at 178, Collin at 152 and Denton at 115; Kaufman, Ellis, Parker, Rockwall and Johnson counties each hold between 9 and 14. Volume ran at 85 loans in FY2017, 85 in FY2018 and 85 again in FY2024, with a trough of 53 in FY2020 and 89 in FY2025.

Lenders, as SBA records them

The holders listed are those SBA currently records for each loan. In the 7(a) program The Huntington National Bank holds 76 loans worth $29.6 million, well ahead of Bank of Hope with 30, Commonwealth Business Bank with 28 loans but $27.9 million, PNC Bank, National Association with 25 and PCB Bank with 23. Commonwealth's dollars per loan run far higher than Huntington's. Capital Certified Development Corporation and North Texas Certified Development Corporation each hold 6 of the 504 loans. Holdings are all the register records, and it says little about any named bank's appetite or standards.

Cancellations and charge-offs

Among loans approved in FY2017 through FY2024, cancellations run to at least 11.4%, rising to a ceiling of 12.4% once undisbursed loans are counted as cancelled too. Looking at the 305 loans approved in FY2017 through FY2021 that went on to disburse, no fewer than 8.9% ended in charge-off, while the share written off by the fifth anniversary of approval was 3.9%. The gap between the two means some charge-offs come after the fifth anniversary, and both numbers are floors.

Testing a North Texas quick-service unit

A study for a quick-service concept in this metro area should begin with the franchisor's own unit economics and then ask whether the trade area can hold another unit. Occupancy cost, build-out and equipment have to be tested against a ticket near $397,850, and coverage shown after royalties and a slow first year. The appraisal will lean on sales that a new unit can reasonably achieve. The geography is each project county's statistical area as drawn in July 2023, so this record leaves out loans in counties that SBA's data cannot place.