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

Franchise country under the 7(a) program

Texas is the second state by number of 7(a) limited-service restaurant loans, and quick service is the second-ranked asset class inside Texas as well, at 2 of 39. Between FY2017 and FY2026 the file holds 1,720 such approvals worth $953.4 million. The point this cut makes, which the two-program view blurs, is how thoroughly the 7(a) route is a franchise route: 62.8% of the loans went to franchised units. A borrower opening a branded counter-service store in Texas is joining the largest group of borrowers in the cell, not an exception.

Loan size within that group

The median of $374,000 is 1.26x the nationwide 7(a) median for quick service, and the central half of loans extends from $209,000 up to $622,800. Those figures sit above what a first-time buyer might guess for a drive-through unit, which tells us the typical Texas deal covers more than equipment: a build-out, a conversion or a business purchase with leasehold costs. The yearly count is steady rather than cyclical. Approvals dipped to 104 loans in FY2020, recovered to 156 in FY2021, and reached 203 loans and $133.0 million in FY2025.

Lenders and counties in the Texas file

The Huntington National Bank is first in SBA's listing at 177 loans, then Stearns Bank National Association with 56 and PNC Bank, National Association with 54, then Prosperity Bank alongside Wells Fargo Bank National Association at 51 apiece. SBA's file records who holds each loan; it is silent on credit policy. The concentration in the first name is noticeable. By county, Harris leads with 258 loans, Tarrant has 201, Dallas 176 and Collin 151, so the lending follows the large metros and their suburbs.

The floors, which is where this cell is distinctive

Cancellation reached at least 11.8% of approvals dated FY2017 to FY2024, with 12.4% the figure once loans that never disbursed are added in. The charge-off figures are the sharper difference: 12.0% of the disbursed FY2017 to FY2021 loans have been written off to date, and 7.2% were written off inside five years of approval, in a cohort of 761 loans. Both are floors, because open loans may still fail. A lender comparing this program with others should read them as minimums and as a sign that scale in franchising does not remove risk.

What a Texas study under this program has to test

The study should test unit economics against the franchisor's own disclosures, then against the local trade area: traffic count, drive-through stacking, nearby competitors of the same brand and sales that a unit at this site can plausibly reach. Capital cost has to be set against a loan near the median, with the rent or purchase price of the site shown separately. Debt service coverage should stand up in a slow opening year and under a modest decline in sales, and the appraisal will need to value a leasehold or a going concern, so the study should be written for that reader.