Quick Service Restaurant Feasibility Study in the Sacramento-Roseville-Folsom, CA Metro Area

Brand-heavy, with Placer County close behind

More than half of the quick-service loans in Sacramento-Roseville-Folsom, 53.5%, carry a franchise flag, and that is the first thing a borrower or lender should take from this cell. Across FY2017 to FY2026 the file holds 213 limited-service restaurant approvals, worth $91.4 million. Sacramento ranks 21st among 779 areas, the class takes second place locally, and a location quotient of 1.17x puts it somewhat above national weight. Sacramento County has 120 loans, Placer County 50, Yolo County 23 and El Dorado County 20.

Loan sizes are close to national norms: the median of $325,000 sits at 1.05x the national benchmark, and half of the loans lie from $160,500 to $522,000. SBA 7(a) supplies 203 loans and SBA 504 supplies 10. The small 504 count says that most Sacramento-area quick-service money pays for equipment, buildout and brand fees, not for owned land.

Whose books these loans sit in

In SBA's tables each loan belongs to its present holder, whoever first approved it. U.S. Bank, National Association heads the list with 19 loans and $5.2 million, then Plumas Bank with 11 and $3.5 million. Live Oak Banking Company has 10 loans for $8.8 million, Stearns Bank National Association 9 for $2.9 million, and Harvest Small Business Finance, LLC 8 for $5.0 million. Live Oak's loans are the biggest on average. No 504 lender reaches the listing threshold in this area. The lists describe where loans are held and promise a borrower nothing.

The Sacramento file shows cancellations of at least 10.5% among FY2017 to FY2024 approvals; its ceiling is withheld at the source and no value is printed. Within the 94 loans disbursed over FY2017 to FY2021, no fewer than 9.6% stand charged off, whereas the five-year loss rate is withheld and is not zero. Annual approvals rose from 14 in FY2020 to 28 in FY2024, which was worth $14.4 million, and dropped to 20 in FY2026.

What a study of a Sacramento drive-through has to test

A franchise brings a model, so the first question is how well the proposed pad matches the model's assumptions on traffic, visibility and income in the trade area. Commuter traffic on the freeways brings volume, but the study has to show the specific site's morning and midday counts and its access from the road. The franchisor's build and remodel requirements, royalties and advertising contributions go into the cash flow, which must still cover debt service with a slow first year. Because a lender will see a leased building and specialized equipment, the appraisal should assume limited recovery if the concept closes. Counts for the area rest on each loan's county being found in the July 2023 list, so the Sacramento figures run low if any county failed to match.