How to Finance a Huey Magoo’s Franchise: The $500K Liquidity Rule
By Anthony Cornella
A Huey Magoo’s franchise loan finances a chicken tenders restaurant in one of several formats, from an in-line storefront to a freestanding drive-thru. Before any lender gets involved, though, the franchisor sets a high bar of its own: candidates need $500,000 in liquidity and $750,000 in net worth for each restaurant they plan to develop.
US Professional Funding is not affiliated with, sponsored by or endorsed by Huey Magoo’s; the name is used only to describe the business. Figures from the franchisor’s website and disclosure document can change, loan programs and terms vary by lender and borrower, and every loan is subject to review and approval. Nothing here is legal, tax or investment advice. Buyers should review the current Franchise Disclosure Document (FDD) and franchise agreement with a franchise attorney and an accountant before signing.
Huey Magoo’s Franchise Loan at a Glance
- Initial franchise fee: $35,000 per restaurant, according to the franchisor’s franchising page.
- Royalty: 5% ongoing royalty fee.
- Ad fund: 2%.
- Financial requirements: liquidity of $500,000 and net worth of $750,000 per restaurant to be developed.
- System size: the company reported 92 restaurants across 13 states in August 2026, with more than 200 in development.
- Formats: in-line, in-line end cap, freestanding drive-thru, drive-thru end cap, pick-up window and a new 1,850-square-foot drive-thru prototype.
- Financial performance: the franchisor’s site references an April 28, 2026 FDD that includes financial performance representations in Item 19.
- SBA Franchise Directory: listed as “Huey Magoo’s Chicken Tenders,” with one note about real estate collateral explained below.
What Is Huey Magoo’s?
Huey Magoo’s was founded in 2004 by Matt Armstrong and Thad Hudgens and is based in Orlando, Florida. The concept is narrow and deliberate: premium chicken tenders served as meals, sandwiches, wraps and salads, with signature sauces and house-made sides such as hand-spun chips, coleslaw and banana pudding. The brand calls its product “The Filet Mignon of Chicken.”
Growth. Under its current leadership team, led by President and CEO Andy Howard, the brand has moved from a small regional chain to a national franchise system. In August 2026 the company announced development rights for 60 new restaurants awarded to eight franchise groups, in markets across Texas, Missouri, Kansas, Arkansas, South Carolina, Alabama, Pennsylvania and Virginia, and said it expected about 100 open restaurants by the end of 2026.
Restaurant formats. The franchising page lists in-line, in-line end cap, freestanding drive-thru, drive-thru end cap and pick-up window formats, plus a new drive-thru prototype of 1,850 square feet. That flexibility gives franchisees more real estate options, but each format carries a different budget and a different loan structure.
How lenders view the brand. Lenders see a growing fast-casual chicken concept with published fees, clear financial requirements and an Item 19 in its FDD. Because much of the system is young and many franchisees are building new markets, lenders focus on the operator’s capital, restaurant experience and site.
Huey Magoo’s Franchise Costs
Initial franchise fee. The franchisor lists a $35,000 franchise fee per restaurant. Because the fee is charged per restaurant, a multi-unit development agreement multiplies it across the schedule; review Item 5 of the current FDD for when fees are due under a development agreement.
Real estate and build-out. Construction is usually the largest cost. An in-line storefront generally needs interior build-out only, while an end cap with a drive-thru or pick-up window adds site work, and a freestanding drive-thru may involve a ground lease, pad site or land purchase. The franchisor says its development team helps manage construction projects from start to finish.
Equipment. A tenders kitchen relies on fryers, breading stations, grills, refrigeration and freezers, hood and fire suppression systems, holding equipment, beverage equipment, point-of-sale and digital ordering technology and, for drive-thru formats, order and communication systems.
Opening costs and working capital. Training costs, opening inventory, pre-opening payroll, grand opening marketing, deposits, licenses and insurance belong in the budget, along with additional funds for the first months of operation.
Total investment. The estimated initial investment, with its full line items and assumptions, appears in Item 7 of the current FDD. Expect categories along these lines:
- Initial franchise fee
- Real estate, rent and security deposits
- Leasehold improvements or construction, including drive-thru or pick-up window work
- Kitchen equipment, furniture, fixtures and signage
- Technology, point-of-sale and digital ordering systems
- Training expenses
- Opening inventory and grand opening marketing
- Licenses, permits, insurance and professional fees
- Additional funds for the initial operating period
The format you choose has the biggest effect on where your project lands within the Item 7 range, and owning land for a freestanding drive-thru can push the project well beyond it.
Ongoing Fees and How They Affect Your Loan
Royalty. The franchisor lists a 5% ongoing royalty fee. Royalties are typically calculated on gross sales, so they are paid before rent, payroll and debt service.
Ad fund. The ad fund fee is 2%. Combined with the royalty, a set share of every sales dollar goes to the franchisor before the restaurant pays its other bills.
Other fees. Item 6 of the FDD lists additional recurring and one-time fees, such as technology, training, transfer and renewal fees. Ask what remodel or technology updates may be required during your loan term.
How lenders factor these costs in. Lenders build projections that subtract food and paper costs, labor, the 5% royalty, the 2% ad fund, rent and other expenses from sales, then compare what is left to proposed loan payments. A comfortable cushion above debt service supports approval.
Franchisor Requirements for New Owners
Huey Magoo’s publishes clear financial requirements on its franchising page:
- Liquidity: $500,000 per restaurant to be developed.
- Net worth: $750,000 per restaurant to be developed.
- Development commitment: the franchisor’s franchising brochure describes a commitment to develop at least three restaurants in new markets.
- Training: a 21-day program for franchisees and general managers at the Restaurant Support Center in Orlando, plus an additional week of high-volume training for drive-thru and pick-up window restaurants.
- Opening support: in-restaurant opening assistance for the first two restaurants.
What “per restaurant” means for financing. Because the liquidity and net worth requirements apply to each restaurant to be developed, a three-restaurant commitment calls for substantially more capital than a single-unit plan. Lenders will look at the same balance sheet, so map out how much liquidity remains after each restaurant’s equity injection. Our article on how much franchise you can afford walks through the math.
The approval process. Candidates typically submit an inquiry, speak with the development team, review the FDD, talk with existing franchisees and, if approved, sign a development or franchise agreement. Start financing conversations during this stage.
Ways to Own a Huey Magoo’s
Developing new restaurants. Most franchisees build new restaurants under a development agreement. Lenders underwrite each new restaurant on projections, the site and the operator’s experience. See our franchise start-up financing page.
Buying an existing restaurant. As the system matures, some franchisees sell established restaurants. A resale lets lenders review actual results, but it still requires franchisor approval and a buyer who meets the brand’s requirements. Our overview of franchise restaurant acquisition financing explains how these deals work.
Joining or expanding a development group. The brand’s recent growth has come from franchise groups taking on multi-restaurant territories. An existing group can add restaurants within its territory or bid for a new market.
Huey Magoo’s Franchise Loan Options
SBA 7(a) loans. Huey Magoo’s is on the SBA Franchise Directory, so an SBA 7(a) loan is a natural starting point. One loan can fund the franchise fee, build-out, equipment, opening costs and working capital, or the purchase of an existing restaurant.
SBA 504 loans. For a freestanding drive-thru where the franchisee buys the land and builds the restaurant, the SBA 504 program can finance the real estate and long-lived equipment, typically alongside a separate loan for the franchise fee and working capital.
Conventional term loans. Well-capitalized multi-unit groups often use a conventional business loan, particularly once their first restaurants have operating history.
Equipment financing. Fryers, hoods, refrigeration, holding equipment, drive-thru systems and point-of-sale hardware can often be financed separately, preserving cash for construction. Learn more about restaurant equipment financing and leasing.
Working capital and lines of credit. A new restaurant pays staff during training before it opens, and chicken prices can move. A line of credit can cover pre-opening payroll, inventory swings and the ramp-up. Explore restaurant working capital options.
Seller financing on resales. On an existing restaurant, a seller may carry part of the price. A seller note is typically subordinate to the senior loan, and SBA rules can limit how it is structured, so coordinate it with your lender.
SBA Loans for Huey Magoo’s Franchisees
SBA lending for franchises runs through the SBA Franchise Directory, a list of brands whose franchise documents have been reviewed for SBA eligibility. A listing clears the franchise relationship for SBA review; it does not approve any borrower.
Huey Magoo’s listing. The brand appears on the directory as “Huey Magoo’s Chicken Tenders.” Its listing carries one note: when the real estate where the franchise business is located will secure the SBA-guaranteed loan, the Lease Addendum document may not be executed.
What that note means. A lease addendum adds franchisor and lender protections to a store lease. If you own the restaurant’s real estate and pledge it as collateral, there is no third-party lease to amend, so the addendum does not apply. Franchisees who lease their sites follow the standard lease documents.
Program limits. The SBA 7(a) program maximum is currently $5 million, though program rules can change. In a multi-unit plan, each restaurant’s loan counts toward a borrower’s total SBA exposure, so plan the sequence with your lender.
Application tips. Prepare the FDD, development and franchise agreements, a lease or purchase contract, construction bids, equipment quotes, a business plan with monthly projections, a personal financial statement and tax returns.
How Lenders Evaluate a Huey Magoo’s Franchise Loan
Personal credit and financial history. Lenders review credit, tax returns and a personal financial statement, and typically require personal guarantees from significant owners.
Net worth and liquidity. The franchisor’s per-restaurant requirements set the floor. Lenders will also look at liquidity left after the equity injection for each restaurant.
Industry and management experience. Restaurant operations experience, ideally multi-unit, carries real weight. If you are an investor partner, show who the operating partner is and their record.
Business plan and projections. Projections should reflect the format, drive-thru or pick-up volume, labor, food costs, the 5% royalty and 2% ad fund, and a realistic ramp-up. Our article on how lenders read a Franchise Disclosure Document explains which FDD items matter most. Use the Item 19 representations as a reference point, not a forecast.
The FDD and agreements. Lenders review the term, renewal, transfer provisions, territory and the development schedule, as well as Item 10 for any franchisor financing.
Site, lease or real estate. Visibility, access, drive-thru stacking and nearby traffic drivers matter. Lenders typically want the lease term, with renewals, to cover the loan.
Historical financials for resales. Expect to provide several years of profit and loss statements, sales reports and tax returns for an existing restaurant.
Choosing a Format: How It Changes Your Financing
In-line and end cap. These formats usually involve a leased space in a shopping center. Financing covers build-out, equipment and opening costs, and the lease term drives the loan term.
Pick-up window and drive-thru end cap. These add site and window work but can serve off-premises customers. Budget for drive-thru technology and confirm that the landlord permits the window and lane.
Freestanding drive-thru. The new 1,850-square-foot prototype and other freestanding sites involve the most construction. If you buy the land, an SBA 504 or conventional real estate loan may finance it; if you ground lease, lenders will review the ground lease closely. When the real estate secures an SBA loan, the directory note on the Lease Addendum applies.
Multi-Unit Growth and Development Agreements
Huey Magoo’s grows mainly through development agreements, and its brochure describes a minimum commitment of three restaurants in new markets. Each restaurant must meet the franchisor’s per-restaurant financial requirements.
Financing the schedule. Most groups use a Huey Magoo’s franchise loan for the first restaurant, let it operate and then use its results to support loans for the next. Some line up a facility that funds several restaurants over time. Our article on financing an area development agreement explains common structures.
Pacing growth. Missing development deadlines can carry consequences, so build realistic timelines for site approval, permits and construction, and keep capital in reserve for each opening.
Real-World Scenarios
A first-time franchise group entering a new market. Two partners with restaurant management backgrounds sign for three restaurants. They meet the per-restaurant liquidity requirement, finance the first in-line restaurant with an SBA 7(a) loan and keep reserves for the second opening.
An experienced operator building a drive-thru. An operator with several other restaurants buys a pad site for the new drive-thru prototype. The land and building are financed with an SBA 504 loan, with a separate loan for equipment and opening costs. Because the property secures the loan, the Lease Addendum note applies.
A buyer acquiring an existing restaurant. A buyer approved by the franchisor purchases an operating restaurant from a group that is consolidating elsewhere. The lender reviews historical results and finances the purchase with a 7(a) loan and a small subordinate seller note.
Common Mistakes to Avoid
- Overlooking that the liquidity and net worth requirements apply per restaurant
- Signing a development agreement without a capital plan for every restaurant on the schedule
- Choosing a format without confirming drive-thru or window approvals with the landlord and city
- Treating Item 19 figures as a forecast for a new restaurant
- Underestimating pre-opening payroll during the training period
For more pitfalls across the restaurant industry, read about the restaurant loan mistakes owners make most often.
Next Steps to Finance Your Huey Magoo’s Franchise
Step 1: Confirm you meet the requirements. Check your liquidity and net worth against the per-restaurant requirements for the number of restaurants you plan to develop.
Step 2: Review the FDD with advisors. Go through Items 5, 6, 7, 10, 12, 17 and 19 and the agreements with a franchise attorney and accountant.
Step 3: Talk with a financing specialist early. Learn how a first-restaurant loan would be sized and how later restaurants can be financed. Our conventional loan calculator can help with early estimates, which are for planning only and are not an offer.
Step 4: Choose a format and site. Match the format to your market and budget, and confirm drive-thru or window approvals.
Step 5: Build the budget and projections. Gather construction bids and equipment quotes and model the full fee structure.
Step 6: Apply and coordinate approvals. Submit your loan package and align the lender’s timeline with the franchisor’s site and construction approvals.
Step 7: Close, train and open. Complete the 21-day training, fund construction and keep working capital ready for the ramp-up.
Huey Magoo’s Franchise Loan FAQs
How much does it cost to open a Huey Magoo’s franchise?
The full estimated initial investment is in Item 7 of the current FDD. The franchise fee is $35,000 per restaurant, and the total depends largely on format, from in-line to freestanding drive-thru.
What is the Huey Magoo’s franchise fee?
The franchisor lists the fee at $35,000 per restaurant.
What royalty does Huey Magoo’s charge?
The ongoing royalty is 5%, plus a 2% ad fund fee.
How much liquid capital do I need?
The franchisor requires liquidity of $500,000 and net worth of $750,000 per restaurant to be developed.
Can I get an SBA loan for a Huey Magoo’s?
Yes, subject to normal underwriting. The brand is listed on the SBA Franchise Directory as “Huey Magoo’s Chicken Tenders,” so franchisees can apply for SBA 7(a) and 504 loans. Confirm current status with your lender.
Can a first-time owner get a Huey Magoo’s franchise loan?
Yes, if the franchisor approves you and you meet lender requirements. Restaurant management experience and the required liquidity carry the most weight.
Can I open just one restaurant?
The brochure describes a commitment of at least three restaurants in new markets. Ask the development team whether single-unit opportunities exist in your area.
Can I finance equipment separately?
Often, yes. Fryers, hoods, refrigeration and drive-thru technology can be financed with an equipment loan or lease.
Can I buy an existing Huey Magoo’s?
Yes, with franchisor approval. A resale lets lenders review actual results, and financing may combine a 7(a) loan with a seller note.
Does the FDD include financial performance information?
Yes. The franchisor’s site references Item 19 financial performance representations in its April 28, 2026 FDD. Review them with your advisors and treat them as a reference point, not a promise.
Does Huey Magoo’s offer financing?
Item 10 of the FDD discloses any franchisor financing. Most franchisees arrange their own loans with outside lenders.
How long is the franchise term?
The term, renewal and transfer conditions are summarized in Item 17 of the current FDD. Lenders compare the remaining term with the loan term.
Final Thoughts
Huey Magoo’s offers flexible formats and published fees, but its per-restaurant liquidity and net worth requirements mean capital planning starts long before you talk to a lender. Buyers who map their capital across every restaurant in a development schedule, choose the right format and use the brand’s SBA Franchise Directory listing well are best positioned to grow.
US Professional Funding helps franchise owners and buyers finance start-ups, acquisitions, equipment, working capital and real estate. Learn more about our franchise financing and restaurant financing solutions.
