SBA 7(a) Quick Service Restaurant Feasibility Study in North Dakota

Franchise-led and small-ticket

Quick service restaurants in North Dakota borrow modestly and mostly through brands. Franchise units make up 48.8% of the 41 loans the program approved over FY2017 to FY2026, which total $15.0 million. The median loan, $140,000, stands at 0.47x of the nationwide figure for the class, and the central half of Dakota loans sits between $60,000 and $350,000, a narrow band by national standards. The state is 49 by count among states, near the bottom, yet limited-service restaurants hold 2 of 39 in the North Dakota asset list.

Three lenders at a tie

Three lenders tie at 5 loans apiece, with dollar totals of $873,300 for First Western Bank & Trust, $507,000 for Town and Country CU and only $180,000 for Bravera Bank. The dollar gap shows that Bravera Bank financed far smaller loans. Cass County leads with 16 loans, then Morton and Ward with 5 each, Grand Forks with 4, and Burleigh and Richland with 3. Annual approvals ran from 3 in FY2020 to 7 in FY2019, with the largest dollar year, $3.3 million, in FY2019; since FY2024 the count has climbed to 6 and 5.

Outcomes

The cancellation floor is 6.7%, among the lower figures in this group and unchanged by undisbursed loans. A charge-off rate cannot be given since the early funded cohort lacks enough loans; the gap should not be read as nil.

What the North Dakota study has to test

A restaurant study here begins with population: a small number of households in the trade area can limit sales, so the study should rely on traffic counts, nearby employers and the energy-sector or university demand that fills seats. Franchise sellers publish sales ranges, and the study should compare them with this location instead of assuming the average. Winter weather affects drive-through and dine-in traffic, and the monthly model should show a cold season. Construction cost in a thinly contracted market can run high, so the study should price the building firmly. A request above the $140,000 median needs to explain why. Coverage must hold in the weakest season, and the appraisal will ask what another operator could pay. A lender will also ask for the franchisor's approval of the site and the timeline for the training and opening package, which the plan should include.