Quick Service Restaurant Feasibility Study in the Provo-Orem-Lehi, UT Metro Area

What defines Provo-Orem-Lehi is the franchise share. Of the area's loans for limited-service restaurants, 57.1% are franchise units, which turns most of the record into branded-concept financing. The class ranks first of 39 within the area, and the area is 55 of 779 metro and micro areas for it, with a location quotient of 0.69x. SBA approved 63 loans between FY2017 and FY2026 for $40.3 million, and the $402,000 median is 1.29x the national class median.

Programs and lenders

Under 7(a) there are 54 loans and under 504 there are 9, so working capital, equipment and business acquisition outweigh owned real estate. Half of the loans lie between $187,950 and $728,600. Central Bank (UT) is listed with 15 loans and $2.7 million, a book of modest tickets. Community Banks of Colorado, A Division of NB is listed with 6 loans and $10.4 million, a very large average that implies a few major projects, and The Huntington National Bank has 5 loans and $1.1 million.

Yearly evidence

FY2017 shows 6 loans and $1.9 million, FY2018 8 loans and $4.6 million, FY2022 10 loans and $4.7 million, FY2023 6 loans and $2.4 million and FY2024 8 loans and $10.8 million. FY2019 through FY2021 and FY2025 and FY2026 are masked. For this cell SBA prints nothing on cancellation or charge-off, and the gap is not evidence of zero loss.

What a franchise-heavy study must test

A study for a franchised drive-thru or counter-service unit must begin with the franchise agreement terms the sponsor already holds: territory, build-out standards, remodel obligations, royalty and advertising contributions. The site test is traffic, visibility, drive-thru stacking and competitors in the same segment. Because brand systems publish average unit volumes, the study should compare the franchisor's claims to the actual trade area rather than adopt them. Cost should be tested against the $402,000 median, and debt service needs a conservative opening ramp. Lenders here see a branded market, one where the restaurant is often a system unit and the sponsor a multi-unit operator, with larger-than-national loans, so the appraiser should split real estate, equipment and franchise value. Counties follow the July 2023 definitions, and the holder lines above are SBA's records of loans these banks hold or held, not statements about how any bank underwrites. The study should also check that equipment financed by the loan is not subject to franchisor replacement cycles that shorten its useful life.