SBA 7(a) Quick Service Restaurant Feasibility Study in Maryland

Franchise-led, near the national ticket

Limited-service restaurants in Maryland are nearly half franchised: 48.2% of the 363 SBA 7(a) loans approved from FY2017 to FY2026 went to franchise brands. The loans total $135.3 million, rank Maryland 18 among states, and place the class 2 of 39 among Maryland asset classes. The $273,700 median is 0.92x of the nationwide 7(a) median for limited-service concepts, a close match, and half the loans fall between $72,500 and $479,000. No single measure separated this cell from both of its parents.

One holder dwarfs the rest

Manufacturers and Traders Trust Company has 127 loans worth $23.2 million, with The Huntington National Bank at 21 loans, Newtek Bank, National Association at 13, Hanmi Bank at 11 and Wilmington Savings Fund Society FSB at 10. The page repeats SBA's current-holder field and offers no reading of any bank's criteria. Prince George's County has 68 loans, Baltimore County 54, Montgomery 49, Anne Arundel 34, Baltimore City 31 and Howard 26, so activity wraps both the Washington and Baltimore edges.

Outcome floors and a recent surge

The cancellation floor for Maryland approvals through FY2024 is 12.7%, or 14.8% with undisbursed loans counted. In a funded cohort of 120 loans, 5.0% or more are charged off to date, and 1.7% went that way within five years of approval. Volume sank to 15 loans in FY2020 and has climbed to 49, then 66 loans and $27.0 million in FY2025, and 53 loans and $21.5 million so far in FY2026. A rising pipeline in quick-service means more units opening into the same trade areas.

The Maryland quick-service test

Because franchise brands dominate, the study has to take the franchise agreement apart: fees, required build-out, territory and the brand's own sales data for comparable units. Beyond that comes the site: drive-through stacking, traffic counts, nearby competing concepts, and daypart demand from commuters or students. Labour cost under Maryland wage rules and a ramp-up plan feed the break-even calculation. Debt service coverage should be proven with sales below the franchisor's average, and the lease must be long enough to amortise equipment and signage. An appraiser will value the business on actual earnings and the brand's system standards. Where a borrower plans several units, each should be tested on its own site rather than averaged, because a weak corner can drag the group below its covenant.