How to Finance a Frugals Franchise: Double Drive-Thru Costs
By Marc Cornella
A Frugals franchise loan finances a Pacific Northwest burger brand built around the double drive-thru: a compact restaurant with ordering lanes on both sides, a small kitchen and no large dining room. That format changes the financing picture, because the site, the building and the traffic flow matter as much as the franchise itself.
US Professional Funding is not affiliated with, sponsored by or endorsed by Frugals; the name is used only to describe the business. Figures from the franchisor’s disclosure document can change, loan programs vary, and every loan is subject to approval. Nothing here is legal, tax or investment advice. Review the current Franchise Disclosure Document (FDD) and franchise agreement with a franchise attorney and an accountant before you sign.
Frugals Franchise Loan at a Glance
- Concept: a burger stand brand serving made-to-order burgers, chicken, halibut, fries and milkshakes, mostly through drive-thru and pickup windows.
- Home base: the brand traces its roots to Port Angeles, Washington, and operates in Washington and Montana.
- Format: double drive-thru restaurants, with at least one walk-up window location in a converted building.
- Growth model: expansion into new Northwest markets has included multi-unit development rights.
- Fees and investment: the franchise fee, royalty, advertising contributions and estimated initial investment are in Items 5, 6 and 7 of the current FDD. We could not verify them from the franchisor’s own materials, so request the current FDD before you budget.
- SBA Franchise Directory: listed as “Frugals” under code S2482, with a note about the lease conditional assignment agreement when real estate secures the loan.
What Is Frugals?
Frugals is a regional burger brand that started on the Washington coast in Port Angeles and grew a loyal following for fresh burgers served quickly from compact stands. It has since expanded across Washington and into Montana, including locations in Kalispell and Missoula.
The double drive-thru. The brand’s signature format places drive-thru lanes on both sides of a small building, so two lines of cars move at once. With no large dining room, the building is smaller than a typical sit-down restaurant, and speed of service drives volume.
The menu. Frugals serves burgers with a range of toppings, chicken, grilled cheese, halibut, fries and seasonal milkshakes. The company emphasizes food that is fresh and never frozen, which shapes kitchen layout, refrigeration and supplier logistics.
Converted sites. At least one location opened in a remodeled former fast-food building with a walk-up window and a very compact kitchen. That shows the brand can adapt existing quick-service buildings, which can reduce construction costs but brings its own layout challenges.
How lenders view the brand. Frugals is a small, regional franchise with a distinctive format. Lenders will weigh the strength of the site, the borrower’s restaurant experience and the cost of building or converting a drive-thru property more heavily than brand scale.
Frugals Franchise Costs
Frugals does not publish a fee schedule we could verify, so build every dollar figure in your budget from the current FDD.
Initial franchise fee. Item 5 discloses the franchise fee and any development fee for multi-unit rights. Lenders can finance the fee, but it must appear in your sources and uses.
Real estate and construction. A double drive-thru needs a lot that supports two stacking lanes, safe entry and exit, and visibility from a busy road. Owners may build new on purchased land, sign a ground lease, or convert an existing drive-thru building. This is usually the largest cost and the biggest variable in the project.
Kitchen equipment. Expect grills, fryers, refrigeration, shake machines, hoods and fire suppression, prep tables and point-of-sale and order-display systems sized for two lanes.
Opening costs and working capital. Opening inventory, hiring, training, grand-opening marketing and the first months of operation all require cash before sales stabilize.
Item 7 of the FDD will typically group costs into lines like these:
- Initial franchise fee and any development fee
- Land, ground lease or lease deposits
- Site work, paving, stacking lanes and utilities
- Building construction or conversion
- Kitchen equipment, hoods and refrigeration
- Signage, menu boards and drive-thru technology
- Opening inventory and supplies
- Training, hiring and pre-opening labor
- Permits, insurance and professional fees
- Additional funds for the initial operating period
Confirm that the line items add up to the stated total, and note whether Item 7 assumes you buy land or lease it. Our article on restaurant build-out financing explains how construction costs are funded.
Ongoing Fees and How They Affect Your Loan
Royalty and advertising. Item 6 lists the royalty, advertising fund contributions, local marketing requirements and technology fees. Percentage-based fees rise with sales and are paid before debt service.
Remodel and equipment refresh. Ask whether the franchise agreement requires periodic remodels or menu board and technology upgrades, and plan reserves for them.
How lenders treat these fees. Lenders measure debt service coverage after royalties, advertising and rent. A Frugals franchise loan should be sized against cash flow that remains after every franchise fee and occupancy cost.
Franchisor Requirements for New Owners
We could not verify published net worth or liquid capital minimums for Frugals. Ask the franchisor for its written criteria, and review Items 5, 7 and 11 for development and training obligations.
Experience. Quick-service or drive-thru management experience is a strong asset. Lenders want to see that you can staff two lanes, control food and labor costs and manage peak periods.
Development commitments. The brand has expanded through development agreements covering multiple markets. If you sign one, the schedule commits you to open restaurants by set dates, which affects financing for each unit.
Ways to Own a Frugals
Build a new restaurant. The ground-up route gives full control of the site and layout but requires the most capital and the longest timeline. Financing may combine real estate, construction and equipment loans.
Convert an existing drive-thru building. Remodeling a former fast-food building can shorten the timeline and reduce construction, but buyers must confirm the lot can handle stacking and that the kitchen fits the menu.
Buy an existing Frugals. When an owner sells, a buyer may acquire the restaurant subject to franchisor approval of the transfer. Lenders will review historical sales and the lease or property. Our page on franchise restaurant acquisition financing covers how purchases are structured.
Develop multiple units. Owners with development rights finance each restaurant as it opens. Our article on area development agreement financing explains how lenders handle development schedules.
Financing Options for a Frugals Franchise
SBA 7(a) loans. The SBA 7(a) program can fund the franchise fee, construction, equipment and working capital, and can include real estate. See our SBA 7(a) loans page.
SBA 504 loans. For owners buying land and building a double drive-thru, the SBA 504 program is designed for owner-occupied real estate and long-lived equipment. Our restaurant real estate financing page covers property purchases.
Conventional term loans. Experienced operators with strong financials may use a conventional business loan, particularly for a second or third unit.
Equipment financing. Grills, fryers, shake machines, refrigeration and drive-thru technology can be financed separately. Learn about restaurant equipment financing.
Working capital and lines of credit. Northwest weather and tourism create seasonal swings, particularly in Montana markets. A line of credit can cover payroll and inventory through slower months. See our restaurant working capital options.
Seller financing on resales. A seller may carry a note for part of the price. Seller notes are typically subordinate to the primary loan, and some programs restrict their terms.
SBA Loans for Frugals Franchisees
Frugals appears on the SBA Franchise Directory under code S2482 with this note: “When the real estate where the franchise business is located will secure the SBA-guaranteed loan, the Lease Conditional Assignment Agreement may not be executed.”
What the note means. Many franchisors require a lease conditional assignment agreement, which lets the franchisor step into the lease if the franchisee defaults. When you own the property and pledge it as collateral for your SBA loan, there is no lease to assign, so that agreement should not be signed. This matters for Frugals because many double drive-thru sites are owned rather than leased.
The SBA 7(a) program maximum is currently $5 million (program rules can change). Projects with land and new construction can approach larger amounts, so plan your structure early.
SBA application tips.
- Provide a site plan showing stacking lanes and traffic flow.
- Include construction bids and equipment quotes that match Item 7.
- Document quick-service management experience.
- Model seasonality in your projections.
- Test payments with our SBA loan calculator.
How Lenders Evaluate a Frugals Deal
Personal credit and financial history. Lenders review credit reports, tax returns and existing debts.
Net worth and liquidity. Expect an equity injection plus reserves, which are especially important during construction.
Industry and management experience. Drive-thru and quick-service experience is highly valued, along with a plan for hiring and training crews.
Business plan and projections. Base assumptions on traffic counts, lane throughput, average ticket, food and labor costs and seasonality. Lenders will compare your numbers with what you learned from the FDD and franchisor discussions.
The FDD and franchise agreement. Lenders read the fee structure, territory rights, development schedule, term and transfer provisions.
Site and real estate. For owned sites, lenders will order an appraisal and environmental review. For leased or ground-leased sites, they review the lease term and landlord consents.
Historical financials for resales. Expect several years of sales reports, tax returns and profit and loss statements.
Equipment and Drive-Thru Design
The double drive-thru format puts unusual demands on the kitchen and site.
- Two-lane ordering: menu boards, speaker systems and order displays for both lanes.
- Compact kitchen: equipment must fit a small footprint while handling peak volume.
- Fresh food handling: refrigeration and prep space for fresh, never-frozen product.
- Weather protection: canopies and heated equipment for Northwest winters.
Equipment that can be financed separately preserves cash for construction and working capital.
Multi-Unit Growth and Development Agreements
Frugals has grown through development rights that cover several markets. Lenders typically finance each restaurant separately, using the performance of earlier units to support the next. Keep each store’s financial records separate and stay ahead of your development schedule so financing does not become a bottleneck.
Real-World Scenarios
The developer. A multi-unit operator signs development rights for an inland Northwest region. The first restaurant uses an SBA 504 loan for land and construction, while equipment is financed separately.
The conversion. A buyer acquires a closed fast-food building with a drive-thru. An SBA 7(a) loan funds the purchase, remodel and equipment.
The resale buyer. A restaurant manager buys an existing Frugals from its owner. The deal combines an SBA loan, buyer equity and a subordinate seller note, subject to franchisor approval.
Common Mistakes to Avoid
- Choosing a lot without enough room for two stacking lanes.
- Underestimating site work and utility costs.
- Ignoring seasonality in Montana and other tourist markets.
- Signing a development schedule without a financing plan for each unit.
- Leaving too little working capital after construction.
For more, read our article on restaurant loan mistakes.
Next Steps to Finance Your Frugals Franchise
Step 1: Request the current FDD. Review Items 5, 6, 7, 10, 12 and 17 with a franchise attorney; our article on using the FDD for financing explains what lenders read.
Step 2: Identify a site. Confirm stacking, access and zoning for a double drive-thru.
Step 3: Decide to buy, ground lease or lease. This choice determines whether SBA 504 or 7(a) fits best.
Step 4: Gather bids and documents. Collect construction bids, equipment quotes, tax returns and a personal financial statement.
Step 5: Build projections. Model sales, costs and seasonality.
Step 6: Apply and coordinate. Align franchisor approval, site control and loan closing.
Frugals Franchise Loan FAQs
How much does a Frugals franchise cost?
The estimated initial investment is in Item 7 of the current FDD and depends heavily on whether you buy land, build new or convert an existing building.
What is the Frugals franchise fee?
The initial franchise fee and any development fee are disclosed in Item 5.
What royalty does Frugals charge?
Royalty and advertising fees are listed in Item 6.
How much liquid capital do I need?
We could not verify a published minimum. Ask the franchisor, and expect lenders to require an equity injection plus reserves.
Is Frugals approved for SBA loans?
Frugals is listed on the SBA Franchise Directory under code S2482, with a note that the lease conditional assignment agreement is not signed when real estate secures the loan.
Can I use a Frugals franchise loan to buy land?
Yes. SBA 7(a) and SBA 504 loans can finance owner-occupied real estate along with construction.
Can I convert an existing drive-thru?
Ask the franchisor whether a specific building qualifies; at least one Frugals operates in a converted building.
Can I buy an existing Frugals?
Yes, if an owner is selling and the franchisor approves the transfer.
Does Frugals offer financing?
Item 10 of the FDD discloses whether the franchisor offers any financing.
How long is the franchise term?
Term, renewal and transfer conditions are in Item 17 of the FDD.
Final Thoughts
A Frugals franchise loan is as much a real estate decision as a restaurant decision. Buyers who secure a site built for two lanes, plan for Northwest seasonality and line up financing for every unit in their development schedule will be best positioned to open strong.
US Professional Funding helps franchise buyers and owners finance start-ups, acquisitions, equipment and working capital. Learn more about our franchise financing and restaurant financing solutions.
