How to Finance The Breakfast Club at Midtown Franchise: DJ Brunch
By Marc Cornella
A Breakfast Club at Midtown franchise loan funds a daytime brunch restaurant with a full kitchen, a full bar and the kind of oversized, photo-ready plates that draw weekend crowds. Most of the money goes into restaurant build-out, kitchen and bar equipment, a liquor license, the franchise fee and working capital for the opening months.
US Professional Funding is not affiliated with, sponsored by or endorsed by The Breakfast Club at Midtown; the name is used only to describe the business. Figures from the franchisor’s disclosure document can change, loan programs and terms vary by borrower, and every loan is subject to review and approval. Nothing here is legal, tax or investment advice; review the current Franchise Disclosure Document (FDD) and franchise agreement with a qualified franchise attorney and accountant.
Breakfast Club at Midtown Franchise Loan at a Glance
- Concept: a breakfast, brunch and lunch restaurant serving from morning into mid-afternoon, with a full bar and brunch cocktails.
- Footprint: a regional brand that began in San Jose and has grown across the San Francisco Bay Area and into the Sacramento region, with some locations run by franchisees.
- Unit type: full-service, sit-down restaurants, often with patios and, at larger sites, private dining space.
- Fees and total investment: not published in a form we could verify from the franchisor’s own materials; confirm them in Items 5, 6 and 7 of the current FDD.
- SBA Franchise Directory: listed as The Breakfast Club at Midtown under code S8270, with a note about the lease addendum when owned real estate secures the loan.
What Is The Breakfast Club at Midtown?
The Breakfast Club at Midtown started as a single brunch restaurant in San Jose’s Midtown area and became known for long weekend lines. Its menu mixes American breakfast standards with bold, shareable dishes: specialty pancakes and French toast, a long list of Benedicts, skillets and omelets, sandwiches and burgers, and Mexican plates such as chilaquiles, burritos and enchiladas.
The bar is part of the draw. Locations serve mimosas, Bloody Marys and other brunch cocktails, and several play DJ sets on weekend mornings. That gives the concept a lively, social feel that sets it apart from a quiet coffee-shop breakfast.
The brand has expanded through new restaurants in Bay Area suburbs and cities and into the Sacramento market, and local reports identify franchisees behind some of the newer openings. Several sites have taken over space previously used by other restaurants.
How lenders view the concept. Lenders generally see breakfast and brunch as a durable daypart with lower food costs than dinner concepts. They also note the risks: a regional brand with a smaller system than national chains, a full-service labor model, alcohol licensing and liability, and sales that lean heavily on weekends. Our article on financing an emerging franchise explains how lenders handle younger systems.
Breakfast Club at Midtown Franchise Costs
Initial franchise fee. Item 5 of the FDD states the fee, when it is due and any development terms. We could not verify the current amount from the franchisor’s own materials.
Real estate and build-out. Most locations lease space in shopping centers, downtown districts or mixed-use developments. A full-service brunch restaurant needs a commercial kitchen with hood and fire suppression, grease management, a bar with plumbing and refrigeration, restrooms, dining room finishes and often a patio. Taking over a former restaurant can reduce construction costs, while a raw shell costs more. Read about restaurant build-out financing.
Equipment and FF&E. Griddles, ranges, fryers, ovens, refrigeration, prep tables, dishwashing, bar coolers and ice machines, espresso and coffee equipment, dining furniture, sound equipment for weekend DJ service and point-of-sale technology.
Liquor license. A full bar requires a state alcohol license, and in some markets licenses must be bought from an existing holder. The cost and timing vary widely by location, so get local guidance early and confirm whether the FDD’s Item 7 includes this cost.
Opening costs and working capital. Opening food and beverage inventory, smallwares, uniforms, staff hiring and training, grand opening marketing, deposits and payroll during the first months.
Total investment. Item 7 of the current FDD gives the low and high estimate. A typical Item 7 table for a full-service brunch restaurant includes:
- Initial franchise fee
- Lease deposits and rent before opening
- Architecture, design and permits
- Leasehold improvements and construction
- Kitchen and bar equipment
- Furniture, fixtures, decor and signage
- Technology and point-of-sale systems
- Liquor license and other licenses
- Opening inventory and smallwares
- Training expenses and grand opening marketing
- Additional funds for the initial operating period
Tie each quote in your loan budget to the matching Item 7 range.
Ongoing Fees and How They Affect Your Loan
Royalty and marketing. Item 6 lists the royalty, usually a percentage of gross sales, plus any brand fund and local marketing requirement. Check whether alcohol sales are included in the base.
Technology and other fees. Look for point-of-sale, online ordering, gift card and software fees, along with transfer and renewal fees.
Remodels. Review the franchise agreement for refresh or remodel obligations during the term.
How lenders factor these costs in. When sizing a Breakfast Club at Midtown franchise loan, lenders subtract food, beverage and labor costs, rent, royalties and marketing fees from projected sales before measuring what remains for debt service. Because the restaurant closes in mid-afternoon, every hour of rent and labor must be covered by a shorter selling day.
Franchisor Requirements for New Owners
The franchisor’s net worth and liquid capital minimums were not published in a form we could verify. Expect it to look for restaurant operating experience, the capital for a full-service build-out and working capital, a qualified operator or general manager, and the ability to secure a liquor license and a suitable site. Ask for the current requirements early and confirm them against the FDD.
Ways to Own a Breakfast Club at Midtown
A new restaurant. A new location is financed on projections, the FDD and your experience. See our restaurant start-up financing options.
A second-generation restaurant space. Converting a former restaurant can shorten construction, though lenders will want an inspection of existing kitchen systems and a clear budget for upgrades.
Buying an existing location. A resale gives the lender operating history to review. Franchisor approval, lease assignment and transfer of the liquor license all need to line up. Our article on buying a franchise resale covers the process.
Financing Options for a Breakfast Club at Midtown Franchise
SBA 7(a) loans. Because the brand is on the SBA Franchise Directory, an SBA 7(a) loan is often the first option. It can cover build-out, equipment, the franchise fee, working capital and, on a resale, goodwill.
SBA 504 loans. The SBA 504 program fits owner-occupied real estate and long-lived equipment. It applies when an owner buys a building for the restaurant, which is also when the directory note below comes into play.
Conventional term loans. Operators with strong restaurant experience and collateral may use a conventional business loan, especially for additional locations.
Equipment financing. Griddles, refrigeration, bar equipment, coffee systems and sound gear can be financed separately. Learn more about restaurant equipment financing and leasing.
Working capital and lines of credit. Weekly food and beverage purchases, payroll for a full-service team and weekday-to-weekend sales swings make working capital important. See our restaurant working capital options.
Seller financing on resales. A selling franchisee may carry part of the price. Any seller note is typically subordinate to the senior loan, and SBA rules may limit its terms.
SBA Loans for Breakfast Club at Midtown Franchisees
The SBA Franchise Directory lists brands whose franchise agreements have been reviewed for SBA eligibility, and SBA lenders generally require a listing before making a guaranteed loan to a franchisee. A listing does not approve any borrower. The SBA 7(a) program maximum is currently $5 million, though program rules can change.
The brand appears as The Breakfast Club at Midtown under code S8270, with one note.
What the note means. When the real estate where the restaurant is located will secure the SBA-guaranteed loan, the brand’s Lease Addendum may not be executed. A lease addendum is a rider to a franchisee’s lease that gives the franchisor certain rights over the premises. If you own the building and pledge it as collateral, there is no landlord lease to attach it to, and the addendum should not be signed for that property. If you lease your space, which is typical, the note does not change your deal.
SBA application tips. Prepare a business plan, personal financial statement, tax returns, resume, the franchise agreement, a lease or letter of intent, contractor bids, equipment quotes and your liquor license plan. The SBA loan calculator gives early payment estimates for planning only.
How Lenders Evaluate a Breakfast Club at Midtown Deal
Personal credit and financial history. Lenders review credit, tax returns and your personal financial statement, and owners typically sign a personal guaranty.
Net worth and liquidity. Cash for the down payment and reserves after opening both matter, since full-service restaurants can take time to reach steady sales.
Restaurant experience. Full-service and bar management experience carries real weight. Lenders want to know who runs the kitchen and the floor every day.
Business plan and projections. Model seats, table turns on weekdays and weekends, average check, alcohol mix, labor scheduling around daytime hours and a realistic ramp-up period.
The FDD and franchise agreement. Lenders read Items 5, 6, 7 and 17, plus territory and transfer rules. Check whether Item 19 includes financial performance representations, and review Items 3 and 4 with your attorney. See how lenders read the FDD.
Site and lease. Parking, visibility, patio rights, co-tenants, lease term and renewal options, and any tenant improvement allowance all shape the request.
Historical financials for resales. Expect to review several years of profit and loss statements, sales reports and tax returns.
The Bar, the Kitchen and the Weekend Rush
The concept’s appeal depends on a busy kitchen and an active bar. Brunch cocktails can lift the average check, but they also bring licensing timelines, insurance requirements and training obligations that a coffee-and-eggs concept does not carry. Build the liquor license into your schedule so it does not delay opening while rent is running.
Weekend demand is the other key factor. Kitchens and dining rooms must handle peak crowds, which drives equipment sizing and staffing. Weekdays are quieter, so projections should not assume weekend volume every day.
Multi-Unit Growth and Development Agreements
Owners who plan more than one restaurant may sign a development agreement with an opening schedule. Lenders typically want the first restaurant performing before funding the second, and they will look at combined cash flow as the group grows. Match the development schedule to realistic financing and construction timelines.
Real-World Scenarios
An experienced operator converting a former restaurant. A restaurant manager takes over a closed restaurant space, uses an SBA 7(a) loan for upgrades, equipment, the liquor license and working capital, and opens faster than a ground-up build.
A buyer acquiring an existing location. A buyer purchases an operating franchised restaurant. The lender reviews its financials, the franchisor approves the transfer, the landlord assigns the lease and the liquor license is transferred.
An owner buying the building. A franchisee buys the building for a new restaurant with an SBA 504 loan. Because the real estate secures the loan, the lease addendum is not signed.
Common Mistakes to Avoid
- Leaving the liquor license until late in the project
- Assuming weekend sales will hold every day of the week
- Underestimating hood, grease and bar plumbing costs in a raw shell
- Signing a lease before financing and the license plan are in place
- Skipping an inspection of existing equipment in a second-generation space
- Overlooking the lease addendum note when buying the real estate
For more pitfalls, read the restaurant loan mistakes that cost owners the most.
Next Steps to Finance Your Breakfast Club at Midtown Franchise
Step 1: Request the FDD. Note the fees, Item 7 range and requirements.
Step 2: Review it with advisors. Have a franchise attorney and accountant review the FDD, franchise agreement and lease.
Step 3: Map the liquor license. Learn what license your market requires, its cost and its timeline.
Step 4: Build your budget and projections. Tie contractor and equipment quotes to Item 7 and model weekday and weekend sales separately.
Step 5: Talk with a financing specialist. Compare SBA and conventional structures for your Breakfast Club at Midtown franchise loan.
Step 6: Secure your site, close and open. Sign the lease with financing contingencies, then coordinate funding with construction, licensing and hiring.
Breakfast Club at Midtown Franchise Loan FAQs
How much does it cost to open a Breakfast Club at Midtown franchise?
Item 7 of the current FDD gives the total investment range. We could not verify it from the franchisor’s own materials, so budget from the FDD.
What is the franchise fee?
Item 5 of the FDD states the initial fee and any development terms.
What royalty does the brand charge?
Item 6 lists the royalty, marketing contributions and other recurring fees. Include each in your projections.
How much liquid capital or net worth do I need?
We could not verify the franchisor’s minimums. Ask the franchise team and plan for a down payment plus working capital reserves.
Is the brand eligible for SBA loans?
Yes. It is listed on the SBA Franchise Directory under code S8270. Every borrower still needs approval, and the lease addendum may not be signed when owned real estate secures the loan.
Can a loan cover the liquor license?
A license can often be included in the project budget, though treatment varies by lender and by state. Plan for it early.
Can I finance kitchen and bar equipment separately?
Yes. Equipment financing can cover kitchen, bar and coffee equipment and preserve cash for working capital.
Can I buy an existing location?
Yes, with franchisor approval, lease assignment, a liquor license transfer and a lender review of the restaurant’s financials.
Can a first-time owner get a Breakfast Club at Midtown franchise loan?
It is harder without restaurant experience. Pairing with an experienced general manager or operating partner can strengthen the request.
Does the franchisor offer financing?
Item 10 of the FDD discloses any franchisor financing. Most buyers arrange their own loans.
How long is the franchise term?
Item 17 and the franchise agreement set the term, renewal and transfer conditions.
Final Thoughts
A Breakfast Club at Midtown franchise loan finances a full-service brunch restaurant with a bar, which means more moving parts than a counter-service cafe. Buyers who confirm the FDD figures, plan the liquor license early, budget carefully for the kitchen and bar, and model weekday and weekend sales honestly put themselves in the best position for approval.
US Professional Funding helps franchise owners and buyers finance start-ups, acquisitions, equipment and working capital. Learn more about our franchise financing and restaurant financing solutions.
