How to Finance a Hwy 55 Franchise: 5% Royalty and Diner Costs
By Chris Cornella
A Hwy 55 franchise loan pays for a full-kitchen, made-to-order burger restaurant built around an open grill and a nostalgic diner atmosphere. Hwy 55 Burgers Shakes & Fries has grown from a single North Carolina restaurant into a regional chain, and buyers who want to join it need a financing plan that works without the shortcuts some larger brands enjoy.
Below we cover the company’s published royalty, marketing and development terms, why the brand’s absence from the SBA Franchise Directory matters, and how to assemble conventional, equipment and working capital financing.
US Professional Funding is not affiliated with, sponsored by or endorsed by Hwy 55 Burgers Shakes & Fries; the name is used only to describe the business. Figures from the franchisor’s disclosure document and website 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, so review the current Franchise Disclosure Document (FDD) and franchise agreement with a qualified franchise attorney and accountant.
Hwy 55 Franchise Loan at a Glance
- Brand: made-to-order burgers, shakes and fries in an all-American diner setting, serving fresh, never frozen food since 1991.
- System size: the company describes more than 55 restaurants across the Southeast; its restaurant locator lists locations in North Carolina, South Carolina, Tennessee and Montana.
- Royalty and marketing: the company’s area development page lists royalties of 5% of gross sales (less sales tax) plus 1% for marketing.
- Franchise fee: the same page lists a $25,000 franchise fee for the first restaurant in a development, with lower fees for later restaurants; confirm current fees in Item 5 of the FDD.
- Area developers: the company asks prospective area developers whether they have at least $500,000 available for investment.
- Total investment: set out in Item 7 of the current FDD, which buyers should request before budgeting.
- SBA Franchise Directory: not listed, so conventional financing is the primary route.
What Is Hwy 55 Burgers Shakes & Fries?
Hwy 55 traces its start to 1991, when founder Kenney Moore opened the first restaurant in North Carolina. The company describes the concept as a fresh, all-American diner experience with an open-grill design and hand-crafted meals, and it promotes food that is fresh and never frozen. The menu centers on burgers, shakes and fries, served in a setting that leans on classic roadside diner style.
The chain remains concentrated in its home state. The company’s restaurant locator lists most locations in North Carolina, with a smaller number in South Carolina, Tennessee and Montana, and its franchising page describes more than 55 restaurants across the Southeast and over 30 years of operating history.
Why lenders view it the way they do. A lender sees a long-running regional brand with a recognizable identity in its core market. It is also a smaller system than the national burger chains, with limited presence outside the Southeast and no SBA Franchise Directory listing. Lenders will therefore put extra weight on the borrower’s restaurant experience, the specific site and the strength of the local market, especially for locations far from the brand’s established footprint.
Hwy 55 Franchise Costs
Hwy 55 does not publish a full investment breakdown on the pages we could verify, so this section explains the cost categories a buyer should expect to see in Item 7 of the FDD and how each one is typically financed.
Initial franchise fee. The company’s area development page lists a franchise fee of $25,000 for the first restaurant within a development, with lower fees for additional restaurants. The page’s own examples are not fully consistent, so treat Item 5 of the current FDD as the authority for single-unit and multi-unit fees.
Real estate and build-out. A diner-style burger restaurant needs a kitchen line, a visible grill area, seating and restrooms. Most franchisees lease a storefront or freestanding building. Build-out is usually the largest and most variable cost, depending on whether the space was previously a restaurant with usable hoods, grease traps and plumbing.
Equipment and smallwares. Flat-top grills, fryers, shake and ice cream machines, refrigeration, freezers, a ventilation hood with fire suppression, prep tables, point-of-sale systems and smallwares form the equipment package.
Signage, furniture and decor. The diner theme relies on booths, counter seating, exterior signs and interior graphics that carry the brand’s look.
Opening costs and working capital. Opening inventory, initial training, pre-opening payroll, deposits, insurance, grand-opening marketing and a cash reserve for the first months all belong in the budget.
Total investment. Item 7 of the FDD gives the official estimated range and its assumptions. When you receive it, expect line items such as these:
- Initial franchise fee
- Real estate, lease deposits and leasehold improvements
- Kitchen equipment, smallwares and technology
- Furniture, fixtures, signage and decor
- Opening inventory and supplies
- Training-related travel and expenses
- Insurance, licenses, permits and professional fees
- Grand-opening advertising
- Additional funds for the initial operating period
Lenders start from Item 7 and adjust for actual bids, equipment quotes and lease terms.
Ongoing Fees and How They Affect Your Loan
Royalty. The company’s area development page lists a royalty of 5% of gross sales, less sales tax.
Marketing contribution. The same page lists an additional 1% of gross sales for marketing, bringing the combined percentage-based contribution to 6%. Local advertising you run yourself is usually a separate cost.
Other fees. Review Item 6 for technology, software, training, transfer and renewal fees, and ask whether any remodel or refresh obligations apply over the term.
How lenders factor these costs in. In a burger restaurant, food and paper, labor and rent consume most of each sales dollar before franchise fees. Lenders subtract the royalty and marketing percentages along with those costs and then test whether the remaining cash flow comfortably covers loan payments. Because fees are tied to gross sales, they fall when sales fall, but the loan payment does not, which is why lenders want to see reserves.
Franchisor Requirements for New Owners
The company’s area development page asks prospective developers whether they have at least $500,000 available for investment and lists food industry experience as desired. Requirements for single-unit franchisees are set out in the FDD and in conversations with the franchisor’s development team, so confirm the expected net worth and liquidity before applying for a loan.
The approval process. Expect to submit an inquiry, review the FDD, discuss your market and experience, and win approval for both yourself and your site. The company’s franchise website also includes a real estate site submittal process, which reflects how central site approval is to the brand. Lenders will want to see franchisor approval before closing.
Ways to Own a Hwy 55
Opening a new restaurant. A single new restaurant is financed on projections, the owner’s equity and the Item 7 budget. Because there is no operating history, the lender relies heavily on the owner’s experience and the strength of the site. Our page on franchise start-up financing covers how we approach new units.
Buying an existing restaurant. With most locations operating in North Carolina, resales of established restaurants can be a practical entry point. A resale gives the lender actual sales and cost history to underwrite, and the price usually reflects the restaurant’s cash flow, lease and equipment condition. The transfer requires franchisor approval. Read about franchise restaurant acquisition loans and our article on buying a franchise resale.
Area development. The company offers area development, which it describes as covering a region that is often an entire state. Each area developer must open a flagship restaurant in the region and may open additional restaurants or sell franchises to other investors. According to the same page, the developer collects the royalty and marketing payments from franchisees in the region and keeps a share before remitting the balance to the home office. Area development financing is more complex and is covered in the multi-unit section below.
Financing Options for a Hwy 55 Franchise
Conventional term loans. Because the brand is not on the SBA Franchise Directory, a conventional business loan is usually the core of a Hwy 55 franchise loan. Conventional lenders typically look for a meaningful cash injection, solid personal credit, restaurant experience and collateral, and they size the loan to projected or historical cash flow.
SBA 7(a) loans. The SBA 7(a) program is widely used for restaurant franchises, but SBA lenders generally require a brand to be on the SBA Franchise Directory. See the SBA section below.
SBA 504 loans. The 504 program finances owner-occupied real estate and long-lived equipment. It faces the same directory question as the 7(a) program for a franchised business, so buyers who plan to own their building should discuss options with a lender early.
Equipment financing. Grills, fryers, shake machines, refrigeration, hoods and point-of-sale systems can often be financed or leased separately, with the equipment itself as collateral. This can reduce the cash a buyer needs at opening and keep the term loan smaller. Learn more about restaurant equipment financing and leasing.
Working capital and lines of credit. A new restaurant needs cash for payroll during training, opening inventory and the slower weeks before regular customers build up. A line of credit can also cover equipment repairs and seasonal dips. See our options for restaurant working capital.
Seller financing on resales. On the purchase of an existing restaurant, a seller may agree to carry part of the price. Any seller note must be acceptable to the senior lender and is typically subordinate to it.
SBA Loans for Hwy 55 Franchisees
SBA lending for franchises runs through the SBA Franchise Directory, a list of brands whose franchise documents have been reviewed for eligibility. SBA lenders generally require a brand to appear on the directory before they can make an SBA-guaranteed loan to one of its franchisees.
Hwy 55 is not on the SBA Franchise Directory. In plain terms, SBA 7(a) and 504 loans are generally not available for a Hwy 55 franchise as things stand, and buyers should plan on conventional financing. The absence of a listing is not a judgment about the brand; it simply means the franchise documents have not been placed on the directory. A franchisor can apply to be added, so ask the development team about its plans and confirm current status with your lender. If the brand were added, the SBA 7(a) program maximum is currently $5 million, though program rules can change.
What this means for your plan. Without an SBA option, plan for a larger personal contribution and stronger collateral; pairing a conventional term loan with equipment financing can reduce the cash required up front.
How Lenders Evaluate a Hwy 55 Deal
Personal credit and financial history. Lenders review credit, tax returns and a personal financial statement, usually with a personal guarantee.
Net worth and liquidity. Lenders look at the cash injection and what remains in reserve after closing. Restaurants face surprise expenses, so post-closing liquidity matters. Our article on how much franchise you can afford walks through the math.
Restaurant and management experience. Prior restaurant experience carries real weight, especially for a smaller brand.
Business plan and projections. A strong plan models sales ramp-up, food and paper costs, labor, rent, the 5% royalty and 1% marketing contribution listed by the company, local marketing and debt service. For a restaurant outside the brand’s core region, the plan should explain how the owner will build awareness.
The FDD and franchise agreement. Lenders review the term, renewal and transfer provisions, territory rights and any franchisor financing in Item 10. Our article on reading the FDD for financing explains which items matter most.
Site and lease. Lenders review rent, renewal options, traffic and visibility, and want the lease to run at least as long as the loan.
Historical financials for resales. For an existing restaurant, expect to provide several years of profit and loss statements, sales reports and tax returns.
Kitchen and Equipment
A Hwy 55 kitchen centers on cooking burgers to order on a visible grill, alongside fryers for fries and machines for hand-spun shakes. Typical equipment includes flat-top grills, fryers, shake and soft-serve machines, reach-in and walk-in refrigeration, freezers, a ventilation hood with fire suppression, prep stations, dishwashing equipment and point-of-sale technology.
Financing tips for equipment. A former restaurant space with usable hoods and plumbing can cut build-out costs, and buyers of existing restaurants should have equipment inspected and budget for replacements.
Multi-Unit Growth and Area Development
Area development agreements. The company describes area development territories that are often an entire state, with each developer required to open a flagship restaurant. Developers may open more restaurants themselves or sell franchises to other investors and share in royalty and marketing collections from those franchisees.
Financing a development. Lenders generally finance one restaurant at a time rather than an entire development schedule. The flagship is financed on the developer’s resources and projections; later restaurants are financed with the support of the flagship’s results. Developers should keep enough liquidity to meet any development obligations even if a new restaurant ramps more slowly than planned. Our article on multi-unit franchise financing explains how lenders approach growing groups.
Real-World Scenarios
An experienced restaurant manager opening a first unit. A former restaurant general manager leases a former diner with a usable hood system. She contributes cash, finances the kitchen equipment separately and uses a conventional term loan for the build-out and opening costs, keeping a reserve for the first months.
A buyer purchasing an existing North Carolina restaurant. A buyer acquires an established restaurant from a retiring owner. The lender underwrites the restaurant’s historical sales and costs, the seller carries a small subordinate note, and the franchisor approves the transfer.
An area developer launching a new state. An investor with substantial liquidity signs an area development agreement for a new state. The flagship restaurant is financed on the developer’s strength and a detailed plan for building brand awareness where the name is less known.
Common Mistakes to Avoid
- Assuming SBA financing is available for a brand that is not on the SBA Franchise Directory
- Relying on website summaries instead of the Item 5, 6 and 7 tables in the current FDD
- Underestimating build-out costs in a space without existing restaurant infrastructure
- Leaving out the 1% marketing contribution or local advertising from projections
- Signing an area development agreement without a plan to finance each restaurant in sequence
- Spending all available cash on the opening and leaving no reserve
For more pitfalls, read the restaurant loan mistakes that cost owners the most.
Next Steps to Finance Your Hwy 55 Franchise
Step 1: Request the FDD. Review Items 5, 6, 7, 10, 12, 17 and 19 with a franchise attorney and accountant.
Step 2: Confirm the requirements. Ask the development team about net worth, liquidity and experience expectations for single-unit and area development candidates.
Step 3: Talk with a financing specialist. Learn how a conventional lender will size a loan for this brand. Our conventional loan calculator can help with early payment estimates, which are for planning only and are not an offer or approval.
Step 4: Find and submit a site. Use the franchisor’s site submittal process and gather lease terms and contractor bids.
Step 5: Build your business plan. Use the Item 7 budget, the royalty and marketing percentages and realistic sales ramp-up assumptions.
Step 6: Apply for financing. Submit your personal financial statement, tax returns, resume, projections, FDD and lease.
Step 7: Close and open. Align closing with franchisor approval and construction.
Hwy 55 Franchise Loan FAQs
How much does it cost to open a Hwy 55?
The total estimated investment is set out in Item 7 of the current FDD. Costs vary mainly with real estate, build-out and equipment, so obtain the FDD and local bids before finalizing a budget.
What is the Hwy 55 franchise fee?
The company’s area development page lists $25,000 for the first restaurant in a development, with lower fees for later restaurants. Confirm current single-unit fees in Item 5 of the FDD.
What royalty does Hwy 55 charge?
The company’s area development page lists a royalty of 5% of gross sales, less sales tax, plus 1% for marketing.
How much money do I need?
For area developers, the company asks whether candidates have at least $500,000 available for investment. Single-unit requirements are in the FDD and should be confirmed with the franchisor.
Can I get an SBA loan for a Hwy 55?
Hwy 55 is not listed on the SBA Franchise Directory, so SBA financing is generally not available today. Most buyers use a conventional Hwy 55 franchise loan, often paired with equipment financing.
Does Hwy 55 offer financing?
Check Item 10 of the current FDD for any franchisor financing. Buyers generally arrange their own financing with outside lenders.
Can I buy an existing Hwy 55 restaurant?
Yes, when an owner sells and the franchisor approves the transfer. Lenders can underwrite a resale on the restaurant’s actual history.
Can a first-time owner get a Hwy 55 franchise loan?
It is possible, but without an SBA option, lenders place more weight on restaurant experience, cash injection and collateral. First-time owners often strengthen a request by hiring an experienced manager.
Can I open multiple Hwy 55 restaurants?
Yes. The company offers area development, often covering an entire state, and lenders typically finance each restaurant in sequence.
How long is the franchise term?
The term, renewal and transfer conditions are in Item 17 of the FDD. Lenders consider the remaining term when sizing a loan.
Final Thoughts
Hwy 55 offers a long-running diner-style burger concept with a strong North Carolina base. Because it is not on the SBA Franchise Directory, a successful Hwy 55 franchise loan starts with the current FDD, meaningful equity, restaurant experience and carefully structured conventional and equipment financing.
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.
