How to Finance a Harlem Shake Franchise: Burger Joint Costs
By Marc Cornella
A Harlem Shake franchise loan funds a neighborhood burger and shake restaurant built on a retro, community-first atmosphere: a leased storefront, a flat-top grill line, shake stations, a dining room full of local character and the working capital to carry the opening months. Because the brand is still early in its franchise growth, the way you structure the financing matters as much as the amount.
This article covers the brand’s story, how the costs in the Franchise Disclosure Document (FDD) are organized, the two notes on its SBA Franchise Directory listing and how lenders look at a new restaurant from an emerging system.
US Professional Funding is not affiliated with, sponsored by or endorsed by Harlem Shake; the name is used only to describe the business. Figures from the franchisor’s disclosure document can change, so request the current FDD before relying on any number. Loan programs vary by lender and borrower, and every loan is subject to approval. Nothing here is legal, tax or investment advice.
Harlem Shake Franchise Loan at a Glance
- Concept: a fast-casual burger and shake joint serving smash burgers, fries, hot dogs, chicken sandwiches and handmade milkshakes, with beer and wine at select locations.
- History: the company was founded in 2012 and opened its flagship on West 124th Street in Central Harlem in 2013.
- Locations: company restaurants in Harlem and Park Slope, Brooklyn, with franchised openings announced for Brooklyn, Philadelphia and Columbia, South Carolina.
- Fees and investment: the initial fee, royalty and marketing fees (Items 5 and 6) and the estimated initial investment (Item 7) are in the FDD; we could not verify current amounts from franchisor materials.
- Candidate requirements: set by the franchisor; request them with the FDD.
- SBA Franchise Directory: listed as Harlem Shake under code S8206, with notes on lease documents and lien position.
What Is Harlem Shake?
Harlem Shake started as a neighborhood burger and shake spot on the corner of Lenox Avenue and West 124th Street. Founder and CEO Jelena Pasic, who drew on her family’s restaurant background, built the business with co-founder Emil Radoncic, and Harlem native DarDra Coaxum later joined as a co-owner. The company describes its mission as honoring the people, stories and flavors of Harlem.
The restaurant is known as much for its room as its food. A Wall of Fame holds hundreds of autographed headshots from famous visitors, a Wall of Fro celebrates customers’ hairstyles, the restrooms are lined with vintage magazine covers, and a public live camera streams the street corner around the clock. The menu centers on smash burgers, including the signature Hot Mess burger, plus handmade shakes such as a signature red velvet shake.
Community is part of the business model. The company hires heavily from its own neighborhood, supports local nonprofits, runs an annual Mr. and Miss Harlem Shake contest and has said it wants to expand ownership opportunities for Black and Brown entrepreneurs. Catering, a loyalty app, online ordering and merchandise add revenue beyond the dining room.
Why lenders view it the way they do. A lender sees a restaurant concept with strong brand identity and a long-running flagship, but a franchise system that is still small. That puts the weight on the borrower’s own capital, restaurant experience, site and projections.
Harlem Shake Franchise Costs
We could not access a current Harlem Shake FDD, so this section explains how the costs are built rather than quoting figures. Rely on the Item 7 table you receive.
Initial franchise fee
Item 5 lists the fee and payment terms, and whether any discounts apply. SBA loans can generally include the fee in project costs.
Lease and build-out
For most burger restaurants, build-out is the largest single cost: kitchen exhaust hoods and fire suppression, grease traps, plumbing and electrical upgrades, walk-in refrigeration, restrooms and a dining room that recreates the brand’s retro look. Converting a former restaurant space with existing hoods and grease infrastructure can reduce costs. Our article on restaurant build-out financing explains how lenders handle construction budgets and draws.
Kitchen equipment
Expect flat-top griddles, fryers, refrigerated prep tables, freezers, milkshake mixers and blenders, soft-serve or ice cream freezers if specified, dishwashing equipment and smallwares. A bar setup with draft lines adds cost where beer and wine are offered.
Décor, technology and opening costs
The brand’s personality lives in its walls, signage and seating, so budget for décor packages and graphics. Add point-of-sale, online ordering and loyalty systems, initial food and paper inventory, training, permits, a liquor license where applicable and grand opening marketing.
Total investment
When you review Item 7, expect line items like these:
- Initial franchise fee
- Lease deposits and rent during construction
- Leasehold improvements, hoods and utilities
- Kitchen, shake and refrigeration equipment
- Furniture, décor and signage
- Point-of-sale and technology
- Opening inventory and smallwares
- Licenses, permits and professional fees
- Training and grand opening marketing
- Additional funds for the initial operating period
Ongoing Fees and How They Affect Your Loan
Royalty and brand fund. Item 6 shows the royalty and marketing contributions, usually tied to sales. Lenders subtract them along with food, labor and rent before measuring the cash available for loan payments.
Technology and delivery costs. Online ordering, loyalty programs and third-party delivery commissions can take a real bite out of margin. Model them carefully.
How lenders factor fees in. Lenders project sales, deduct prime costs, occupancy and franchise fees, then test whether what remains covers debt service with a cushion. A Harlem Shake franchise loan sized to optimistic sales leaves no room for a slow opening.
Franchisor Requirements for New Owners
The franchisor sets its own net worth, liquidity and experience requirements, which we could not confirm from its published materials. Ask for them early. The company emphasizes owners who will work hand-in-hand with their neighborhoods, so expect questions about your community ties as well as your finances and restaurant background.
The approval process. Expect an inquiry, discovery calls, the FDD and its review period, a visit to the flagship, site approval and signing. Run financing alongside so your loan approval and lease timing line up.
Ways to Own a Harlem Shake
A new restaurant. Most owners will open a new unit. Read about restaurant start-up financing.
Converting an existing restaurant. An operator with a well-located burger or diner space may be able to convert it, subject to franchisor approval. Financing then focuses on remodeling, equipment upgrades and rebranding.
Buying an existing franchise. As the system grows, resales may appear, giving a buyer actual sales history. The franchisor must approve the transfer. See our franchise acquisition financing page.
Financing Options for a Harlem Shake Franchise
SBA 7(a) loans. Because the brand is listed on the SBA Franchise Directory, an SBA 7(a) loan is often the main route, combining the franchise fee, build-out, equipment and working capital.
SBA 504 loans. If you buy the building, an SBA 504 loan can finance the real estate and long-lived improvements, often alongside a 7(a) loan for the business costs.
Conventional term loans. Experienced restaurateurs with strong balance sheets may qualify for a conventional business loan.
Equipment financing. Griddles, fryers, refrigeration and shake equipment can be financed separately. See our restaurant equipment financing and leasing options.
Working capital and lines of credit. Burger and shake sales often swing with weather and seasons, and shake demand peaks in warm months. A line of credit can cover payroll and inventory in slower stretches. Learn about restaurant working capital and lines of credit.
Seller financing on resales. A selling owner may carry part of the price. Seller notes are typically subordinate to the senior loan, and SBA rules may limit them.
SBA Loans for Harlem Shake Franchisees
The SBA Franchise Directory lists brands whose franchise documents have been reviewed for SBA eligibility. A listing simplifies the lender’s review of the franchise relationship but does not approve any borrower.
The listing and its notes. Harlem Shake is listed under code S8206 with two notes. The first says that if the real estate where the franchise business is located will secure the SBA-guaranteed loan, the franchisor’s Conditional Assignment of Lease and Consent and Agreement of Landlord may not be executed. The second says the lender or certified development company must secure the proper lien position for all collateral in accordance with SBA’s SOP 50 10.
What the notes mean in plain English. If you or an affiliate own the building and pledge it as collateral, the franchisor’s lease documents giving it rights in your lease cannot be signed, keeping the lender’s real estate lien clear. The second note means the lender must take the lien priority SBA rules require on every asset securing the loan, so no franchisor document can push the lender behind other claims on your equipment or property. Your lender will review the franchise agreement and lease documents with both notes in mind.
Loan size. The SBA 7(a) program maximum is currently $5 million, although program rules can change.
SBA application tips. Prepare tax returns, a personal financial statement, a resume showing restaurant experience, the FDD and franchise agreement, a lease or letter of intent, contractor and equipment quotes and a business plan. Use our SBA loan calculator for planning estimates.
How Lenders Evaluate a Harlem Shake Deal
Personal credit and financial history. Lenders review credit, tax returns and debts and expect personal guarantees.
Net worth and liquidity. You will need an equity injection plus reserves for the opening period.
Restaurant experience. Prior restaurant management is a major strength. Without it, plan to hire an experienced general manager.
Business plan and projections. Base sales on foot traffic, neighborhood demographics, nearby competition and seating capacity. Include catering and delivery assumptions and seasonal swings. Check whether Item 19 of the FDD includes financial performance representations; see our article on using the FDD in a loan request.
The FDD and franchise agreement. Lenders review the term, renewal, transfer rules and any franchisor financing in Item 10.
Site and lease. Lenders want a visible, walkable or high-traffic site, a lease at least as long as the loan and landlord approval of the restaurant use, including ventilation and any alcohol service.
Kitchen, Shakes and the Dining Room
A burger concept lives on throughput: the griddle line, fryers and shake station must keep pace at the lunch and dinner rush. Hood systems and fire suppression are among the costliest and least flexible items, which is why second-generation restaurant spaces are attractive. The décor that defines the brand is part of the product, so treat it as a real budget line, not an afterthought.
Multi-Unit Growth and Development Agreements
Owners who succeed with one restaurant may add more in nearby neighborhoods, sharing management, purchasing and catering. Lenders will look at the first unit’s results and global cash flow. Read about multi-unit franchise financing.
Real-World Scenarios
A neighborhood restaurateur. A local operator with diner experience converts a former burger restaurant. An SBA 7(a) loan covers the franchise fee, remodel, equipment and working capital.
An owner buying the building. An investor buys a mixed-use building and pledges it to the SBA lender. Under the directory notes, the franchisor’s lease documents are not signed and the lender takes the required lien position.
A second location. A successful franchisee adds a unit in a nearby neighborhood, financing kitchen equipment separately and using a line of credit for opening inventory.
Common Mistakes to Avoid
- Underestimating hood, grease trap and utility costs
- Ignoring delivery commissions in projections
- Signing a lease shorter than the loan term
- Treating décor as optional rather than part of the brand
- Leaving too little working capital for a slow opening
For more, read the restaurant loan mistakes that cost owners the most.
Next Steps to Finance Your Harlem Shake Franchise
Step 1: Request the FDD. Ask for the current document and the candidate requirements.
Step 2: Review it with advisors. Study Items 5, 6, 7, 10, 17 and 19 with a franchise attorney and accountant.
Step 3: Visit the flagship. See the concept in action and talk with franchisees.
Step 4: Find a site. Look for visible, high-traffic spaces, ideally with existing restaurant infrastructure.
Step 5: Build your business plan. Model sales, food and labor costs, rent and fees month by month.
Step 6: Compare Harlem Shake franchise loan options. Review SBA 7(a), 504, equipment and working capital financing with a specialist.
Step 7: Close and open. Coordinate closing, construction, hiring and your grand opening.
Harlem Shake Franchise Loan FAQs
How much does a Harlem Shake franchise cost?
The total estimated investment is in Item 7 of the FDD. It varies mostly with the site and build-out.
What are the franchise fee and royalty?
The fee is in Item 5 and ongoing fees are in Item 6. Confirm current amounts with the franchisor.
Can I get an SBA-backed Harlem Shake franchise loan?
Qualified borrowers may. The brand is listed on the SBA Franchise Directory under code S8206, with notes on lease documents and lien position.
Can I finance kitchen equipment separately?
Often, yes. Griddles, fryers, refrigeration and shake equipment are common candidates for equipment financing.
Do I need restaurant experience?
It helps significantly with lenders. Without it, plan to hire an experienced manager.
Does Harlem Shake offer financing?
Check Item 10 of the FDD for any franchisor financing.
How long is the franchise term?
The term and renewal conditions are in Item 17 of the FDD.
Does the FDD include financial performance information?
Check Item 19 of the current FDD to see whether it includes financial performance representations.
Final Thoughts
Harlem Shake brings a distinctive story and a loyal following to a franchise system that is still growing. Financing a unit well means verifying every figure in the FDD, budgeting fully for kitchen and décor, and understanding both SBA directory notes before you sign a lease or buy a building.
US Professional Funding helps franchise owners finance restaurant start-ups, acquisitions, equipment and working capital. Learn more about our franchise financing and restaurant financing solutions.
