Quick Service Restaurant Feasibility Study in Kansas

Kansas's busiest SBA class

No class of borrower takes more SBA loans in Kansas than limited-service restaurants: the class ranks 1 of 39 in the state, with 176 approvals worth $91.0 million from FY2017 to FY2026. Nationally, Kansas is 31 of 54 for these loans, and the location quotient of 1.14x shows quick-service restaurants slightly heavier in its SBA book than in the nation's. The Kansas median, $350,000, runs 1.13x the national figure, with half of approvals between $150,000 and $659,100. Franchise concepts dominate at 68.2% of the count. Measured against both Kansas lending overall and quick service nationally, none of our three gauges moves by the margin.

Local and regional banks hold most of the Kansas book. Community National Bank & Trust is the largest 7(a) holder by count with 14 loans worth $6.7 million, while Dream First Bank National Association holds 9 worth $9.2 million, larger franchise units or buildings. UMB Bank, National Association holds 9, INTRUST Bank National Association 6 and Equity Bank 5. SBA 504 financed 21 Kansas restaurant approvals and SBA 7(a) 155; Frontier Financial Partners, Inc. holds 10 of the 504 loans worth $7.5 million and Rural Missouri, Inc. 6 worth $5.0 million.

Losses that keep arriving

The Kansas charge-off record is worth a lender's attention even though our margin does not flag it. Among 83 Kansas quick-service loans disbursed between FY2017 and FY2021, 8.4% have gone to charge-off so far, and 3.6% failed inside five years, so much of the loss arrived later in the loans' lives; both are floors and can rise. Cancellation, by contrast, is moderate at 9.0% of FY2017 through FY2024 approvals, with no change at the ceiling. Approvals held between 16 and 23 a year in most years, dipping to 11 in FY2020 and 12 in FY2026.

What a Kansas quick-service study must test

Johnson County holds 53 approvals and Sedgwick 38, so most Kansas projects compete in the Kansas City suburbs or around Wichita, with Douglas County at 14 and Butler at 9. A Kansas feasibility study has to test the specific pad, with its traffic counts, visibility, drive-through stacking and the brands already on the corridor. For a franchise unit, it must compare the franchisor's unit economics with local wage and food costs rather than adopt them. Site work, building and equipment belong in the budget at current bids. Stress the coverage of debt service for royalty and advertising charges and for a sales ramp slower than the brand's average, given how many Kansas losses came after year five, the point at which remodels and lease renewals often come due. Collateral value should be argued for the building as a home to some other restaurant brand. Our map places no coding caveat on Kansas quick-service lending, so the counts are as filed.