How to Finance a Fatburger Franchise: SBA Notes and Costs
By Chris Cornella
A Fatburger franchise loan finances a fast-casual burger restaurant built around cooked-to-order burgers, a full grill line and a brand name that dates back to the 1940s. For a buyer, the financing questions center on build-out and kitchen equipment, the brand’s current ownership and disclosure document, and three specific SBA Franchise Directory notes that affect how real estate collateral is handled.
This article explains what a buyer should gather before applying, how lenders look at a Fatburger restaurant, how SBA and conventional loans fit new restaurants and resales, and what the brand’s SBA directory notes mean in plain English.
US Professional Funding is not affiliated with, sponsored by or endorsed by Fatburger; the name is used only to describe the business. Figures in the franchisor’s disclosure document can change, loan programs and terms vary by lender and borrower, and every loan is subject to approval. Nothing here is legal, tax or investment advice, and buyers should review the current Franchise Disclosure Document (FDD) and franchise agreement with a qualified franchise attorney and accountant.
Fatburger Franchise Loan at a Glance
- Concept: fast-casual, cooked-to-order burgers, with a co-branded format that pairs Fatburger with a wing concept in about the same footprint as a single restaurant.
- Brand history: started in 1947 as a three-stool hamburger stand, according to the brand.
- Ownership: the brand and its franchising business moved to a new ownership group in 2026 through a court-supervised sale of its former parent company’s assets.
- Fees and investment: the franchise fee, royalty, advertising contribution and Item 7 investment range are set out in the current FDD; request the newest version, since ownership changed in 2026.
- SBA Franchise Directory: listed under code S2185, with three notes covering the lease rider, real estate purchase options and lien position.
- Typical loan uses: leasehold build-out, kitchen equipment, signage, opening costs, working capital, or the purchase of an existing restaurant.
What Is Fatburger?
Fatburger traces its story to 1947, when Lovie Yancey and her husband opened a three-stool hamburger stand called Mr. Fatburger. After the couple split in 1952, she dropped the “Mr.” and kept building the business, and the brand still calls itself “The Last Great Hamburger Stand.” Over the decades it grew from a celebrity-favorite stand into a franchised fast-casual chain with restaurants in the United States and other countries.
The concept. Fatburger restaurants cook burgers to order and serve fries, onion rings, shakes and related items from a counter-service format. That model calls for a full grill line, fryers, refrigeration and a dining room, plus a kitchen layout designed for speed.
Co-branded restaurants. At select locations, Fatburger operates alongside a buffalo-style wing concept from the same franchise family, and the brand says the co-branded restaurant uses about the same footprint as a single fast-casual restaurant. For financing, a co-brand adds equipment and menu complexity but can spread rent and labor over two sales streams.
Why lenders look closely at this brand. A long-lived name and an SBA directory listing work in a borrower’s favor. At the same time, lenders will want to understand the 2026 ownership change, the franchisor’s current support capacity and how the restaurant will perform in its specific market, since brand awareness varies widely from region to region.
The 2026 Ownership Change and What It Means for Borrowers
In 2026, Fatburger’s former parent company went through Chapter 11 cases, and its brand assets, including the restaurants and related franchising activities, were sold to a new ownership group in a sale that closed in June 2026. Fatburger continues to operate and franchise under that ownership.
For a borrower, this is a due diligence item rather than a deal breaker. Lenders will generally want to see:
- The newest FDD, including any updated Item 3 litigation and Item 4 bankruptcy disclosures and the franchisor’s current financial statements in Item 21
- Confirmation that the franchise agreement you sign, or the one you assume in a resale, is with the current franchisor entity
- Clarity on support services such as training, supply chain and marketing under the new owner
- Any changes to fees, development schedules or remodel requirements compared with earlier versions of the FDD
Our guide to how lenders read a Franchise Disclosure Document explains which items get the most attention.
Fatburger Franchise Costs
Because the brand’s ownership changed in 2026, buyers should rely only on the most recent FDD for dollar figures. These are the cost categories to expect and how each one affects borrowing.
Initial franchise fee. Disclosed in Item 5. Development agreements for multiple restaurants typically carry their own fee structure, also described in the FDD.
Real estate and build-out. Most fast-casual burger restaurants operate from leased space in strip centers, pad sites or urban storefronts. Build-out includes kitchen hood and fire suppression, grease management, plumbing and electrical upgrades, the counter and dining room, restrooms and finishes. This is usually the largest and most variable cost.
Equipment. A flat-top grill, fryers, refrigeration, a shake and beverage station, food prep equipment and point-of-sale technology. A co-branded restaurant adds equipment for the second menu.
Signage and decor. Exterior and interior signage, menu boards and brand decor packages.
Opening costs and working capital. Training travel, opening inventory, grand opening marketing, deposits, insurance and additional funds to carry payroll and rent during the ramp-up period.
When you review the Item 7 table, expect the total to be built from categories along these lines:
- Initial franchise fee
- Leasehold improvements and construction
- Kitchen equipment, furniture and fixtures
- Signage and decor
- Point-of-sale and technology systems
- Opening inventory and supplies
- Training expenses and grand opening marketing
- Deposits, permits, licenses and insurance
- Additional funds for the initial operating period
Lenders size the loan against the Item 7 estimate adjusted for your actual lease, contractor bids and equipment quotes, so get those documents early.
Ongoing Fees and How They Affect Your Loan
Royalty and advertising. Fatburger franchisees pay a royalty and an advertising or brand fund contribution, both generally calculated on gross sales and disclosed in Item 6. Because these come off the top line, lenders deduct them before calculating cash available for debt service.
Technology and other fees. Item 6 also lists recurring technology fees, transfer fees, renewal fees and any required local marketing spend.
Remodels and upgrades. Check the franchise agreement for remodel or refresh obligations during the term, and whether the new ownership has introduced updated design standards.
How lenders factor these in. Lenders build projections from expected sales, then subtract food and paper costs, labor, occupancy, royalty, brand fund and other fees. A conservative projection that clearly shows each franchise fee line carries more weight than a summary figure.
Franchisor Requirements for New Owners
Fatburger’s minimum net worth and liquidity requirements are set by the franchisor during the application process, and buyers should confirm the current thresholds directly with the franchise development team. In general, a franchisor will look at:
- Net worth and liquid capital sufficient to fund the equity portion of the investment and reserves
- Restaurant or multi-unit operating experience, especially for development agreements
- A market and site plan consistent with the franchisor’s development priorities
- Willingness to complete the franchisor’s training program before opening
The approval process. Expect an application, review of the FDD (with the required waiting period before signing), discovery calls with franchise development, site review and franchise agreement execution. Lender approval should run alongside, not after, these steps.
Ways to Own a Fatburger
A new restaurant. A startup restaurant is financed on projections, the owner’s experience and the site. Lenders typically combine build-out, equipment and working capital into one structure. Our page on franchise start-up financing explains how these loans work.
Buying an existing restaurant. A resale gives a lender real sales history to underwrite, though it requires franchisor consent to the transfer and often a remodel or equipment refresh. Read about buying a franchise resale, and see our overview of franchise restaurant acquisition financing.
A co-branded restaurant. Opening as a co-brand changes the equipment list, staffing and sales projections. Lenders will want projections that separate the two menus where possible.
Multi-unit development. Fatburger awards development rights for multiple restaurants in some markets. Financing for a development schedule is usually arranged one restaurant at a time, with each new loan underwritten partly on the performance of the units already open.
Financing Options for a Fatburger Franchise
SBA 7(a) loans. An SBA 7(a) loan can cover the franchise fee, build-out, equipment, signage and working capital, or the purchase of an existing restaurant, in one loan.
SBA 504 loans. If you are buying or building the restaurant’s real estate, an SBA 504 loan can finance the land, building and long-lived equipment. The brand’s SBA directory notes speak directly to how owned real estate is handled, as explained below.
Conventional term loans. Experienced operators with strong liquidity, or multi-unit groups, may use a conventional business loan, particularly when the deal structure or timeline does not suit an SBA loan.
Equipment financing. Grills, fryers, refrigeration, shake machines, hoods and point-of-sale systems can be financed separately to conserve cash. Learn more about restaurant equipment financing and leasing.
Working capital and lines of credit. A new burger restaurant needs cash for payroll, food purchases and marketing while sales build, and established owners use lines of credit to manage repairs and slower months. See our restaurant working capital options.
Seller financing on resales. A seller may carry part of the purchase price in some transactions. Any seller note must be acceptable to the senior lender, is typically subordinate and may be restricted under SBA rules.
SBA Loans for Fatburger Franchisees
The SBA Franchise Directory lists brands whose franchise documents have been reviewed for SBA eligibility. SBA lenders generally require a brand to appear on the directory before making an SBA-guaranteed loan to its franchisees, and some listings carry notes that lenders must follow.
Fatburger is listed on the SBA Franchise Directory under code S2185. Its listing carries three notes. In plain English:
- Lease rider: when the real estate where the restaurant operates will secure the SBA loan, the franchisor’s Form of Lease Rider may not be executed. That rider is designed for leased sites; if the franchisee or an affiliate owns the property and pledges it, the rider is not used.
- Purchase option: the franchisor may not enforce a purchase option on real estate owned by the franchisee or an affiliate that has been taken as collateral for the SBA loan. That protects the lender’s collateral from being bought out from under it.
- Lien position: the lender or Certified Development Company must make sure it obtains the correct lien position on all collateral as SBA lending rules require.
These notes matter most when a buyer owns or is buying the restaurant’s real estate. For a typical leased restaurant, they mostly confirm that the franchise documents work within SBA rules. Your lender and attorney should review the lease rider and any real estate provisions before closing.
The SBA 7(a) program maximum is currently $5 million, though program rules can change. Our SBA loan calculator can help with early payment estimates for planning purposes only.
How Lenders Evaluate a Fatburger Deal
Personal credit and financial history. Lenders review credit, personal tax returns and a personal financial statement, and require personal guarantees from significant owners.
Net worth and liquidity. Expect to show the equity injection plus reserves that remain after closing.
Industry and management experience. Restaurant management experience, especially in quick-service or fast-casual operations, carries significant weight. First-time owners should plan to hire an experienced general manager.
Business plan and projections. Projections should reflect local burger competition, lunch and dinner traffic patterns, delivery mix, labor needs for a cooked-to-order kitchen and all franchise fees.
The FDD and franchise agreement. Lenders review the term, renewal and transfer provisions, and, given the 2026 ownership change, the franchisor’s current disclosures.
Site and lease. A lease that runs at least as long as the loan, landlord consent to the franchisor’s lease rider and suitable kitchen infrastructure are key.
Historical financials for resales. Expect to provide several years of profit and loss statements, sales reports and tax returns for the restaurant being purchased.
Kitchen Equipment and Build-Out
A cooked-to-order burger kitchen depends on a reliable grill line, hoods and fire suppression, fryers, walk-in or reach-in refrigeration and a beverage and shake station. The restaurant’s ability to serve a lunch rush depends on this equipment, so lenders want to see quotes for new equipment or, on a resale, an inspection of existing equipment. Many owners pair a Fatburger franchise loan for the build-out with separate equipment financing for the kitchen.
Second-generation restaurant space. Taking over a space with an existing hood and grease trap can reduce build-out costs, but the equipment must still meet brand standards and local codes.
Multi-Unit Growth and Development
Owners who sign development agreements commit to opening restaurants on a schedule. Lenders evaluate each new restaurant on its own projections and on the operator’s track record. Read more about multi-unit franchise financing before signing a development schedule that outpaces your capital.
Real-World Scenarios
An experienced operator opening a first Fatburger. A former quick-service district manager leases an end-cap in a busy retail center and uses an SBA 7(a) loan for build-out, equipment and working capital.
A buyer acquiring a resale. A buyer purchases an existing restaurant with several years of sales history. The lender underwrites historical cash flow, requires franchisor transfer approval and includes funds for an equipment refresh.
An owner buying the building. A franchisee buys a freestanding building for a new restaurant using an SBA 504 loan. Because the real estate secures the loan, the lease rider is not used and the franchisor’s purchase option cannot be enforced against the collateral, consistent with the directory notes.
Common Mistakes to Avoid
- Relying on old cost figures instead of the most recent FDD after the 2026 ownership change
- Ignoring the SBA directory notes when the restaurant’s real estate will be collateral
- Underestimating build-out costs for hoods, grease management and electrical work
- Leaving too little working capital for the opening ramp-up
- Signing a development schedule without a financing plan for each restaurant
For more pitfalls, read the restaurant loan mistakes that cost owners the most.
Next Steps to Finance Your Fatburger Franchise
Step 1: Request the current FDD. Confirm it reflects the 2026 ownership and review Items 3, 4, 5, 6, 7, 17 and 21 with a franchise attorney.
Step 2: Confirm franchisor requirements. Ask franchise development for current net worth, liquidity and experience criteria.
Step 3: Talk with a financing specialist. Learn what equity injection and reserves lenders will expect.
Step 4: Secure a site and quotes. Obtain a lease proposal, contractor bids and equipment quotes.
Step 5: Build projections. Model sales, labor, food costs, occupancy and all franchise fees month by month.
Step 6: Apply and close. Submit the loan package, coordinate the lease rider review and align closing with franchisor approval and training.
Fatburger Franchise Loan FAQs
How much does a Fatburger franchise cost?
The total investment range is disclosed in Item 7 of the current FDD and depends on site, size and whether the restaurant is co-branded. Because ownership changed in 2026, use only the newest FDD for figures.
Can I get an SBA loan for a Fatburger?
Yes, subject to lender approval. Fatburger is listed on the SBA Franchise Directory under code S2185, with notes about the lease rider, purchase options and lien position.
What do the SBA directory notes mean?
When the restaurant’s real estate secures the SBA loan, the franchisor’s lease rider is not used and its purchase option cannot be enforced against that collateral, and the lender must take the correct lien position on all collateral.
Did the 2026 ownership change affect franchising?
The brand and its franchising activities were sold to a new ownership group in 2026 and continue to operate. Review the newest FDD for any changes to fees, support or agreement terms.
What royalty does Fatburger charge?
The royalty and advertising contribution are disclosed in Item 6 of the current FDD and are generally based on gross sales.
How much liquid capital do I need?
Confirm current requirements with the franchisor. Lenders will also expect an equity injection and post-closing reserves.
Can I finance kitchen equipment separately?
Yes. Equipment loans and leases can cover grills, fryers, refrigeration and point-of-sale systems.
Can I buy an existing Fatburger?
Yes, with franchisor approval of the transfer. Lenders can underwrite the restaurant’s historical financials.
Does Fatburger offer financing?
Check Item 10 of the current FDD for any franchisor financing. Most owners use SBA or conventional loans.
Can a first-time owner get a Fatburger franchise loan?
It is possible, especially with strong liquidity and an experienced general manager, but lenders weigh restaurant experience heavily.
What documents do I need?
Personal financial statements, tax returns, a resume, the FDD and franchise agreement, a lease proposal, contractor and equipment quotes and a business plan with projections.
Final Thoughts
A Fatburger franchise loan can support a new restaurant, a co-brand or a resale, and the SBA directory listing keeps 7(a) and 504 options open. Buyers who work from the newest FDD, understand the directory notes and budget fully for the kitchen and opening period are best positioned to close.
US Professional Funding helps franchise owners and buyers finance startups, acquisitions, equipment, working capital and refinancing. Learn more about our franchise financing and restaurant financing solutions.
