How to Finance a Long John Silver’s Franchise: Seafood QSR Costs
By Chris Cornella
A Long John Silver’s franchise loan finances a drive-thru seafood restaurant in one of the few national quick-service brands built around fish and shrimp. The brand has a long operating history and a franchise system that once owned the company outright, but it does not appear on the SBA Franchise Directory, and that single fact shapes how a lender approaches the deal.
This article explains what Long John Silver’s publishes about itself, how to build a cost picture from the Franchise Disclosure Document (FDD), the fees that matter to a lender, the different ways to become an owner and the financing structures that may fit, including what the brand’s absence from the SBA Franchise Directory means. US Professional Funding is not affiliated with, sponsored by or endorsed by Long John Silver’s; the name is used only to describe the business. Figures in the franchisor’s disclosure document can change, loan programs and terms vary, and every loan is subject to approval. Nothing here is legal, tax or investment advice.
Long John Silver’s Franchise Loan at a Glance
- Founded: 1969, in Lexington, Kentucky
- Headquarters: Louisville, Kentucky
- System size: the company reports about 470 restaurants across 33 states
- Ownership: a group of franchisees acquired the company from its former parent in 2011
- Format: quick-service seafood restaurants, with drive-thru windows added to most locations
- Franchisor support: training and restaurant support, real estate and construction, marketing and development support
- Fees and investment: disclosed in the current FDD (Items 5, 6 and 7), which the franchisor provides during the application process
- SBA Franchise Directory: not listed at the time of writing
The franchisor’s public franchising page invites prospective owners to apply but does not publish its fee schedule, investment range or financial qualifications. That makes the FDD the primary source for every number in your loan request, and it means you should obtain and review it before discussing loan size with anyone.
What Is Long John Silver’s?
Long John Silver’s opened its first restaurant in Lexington, Kentucky, in 1969 and is now headquartered in Louisville, Kentucky. According to the company, it grew to a fleet of more than 1,000 restaurants during the 1970s, became a national brand in the 1980s and added drive-thru windows to most of its locations in the 1990s. During the 2000s, under a large restaurant company, it also opened co-branded locations shared with other restaurant brands.
In 2011, a group of franchisees bought the company from that former parent, and the brand remains franchisee-owned in that sense today. The company says that in the 2020s it has accelerated restaurant remodels and expanded internationally, and it reports about 470 restaurants in 33 states.
The menu centers on fish, shrimp, chicken and sides, sold through the counter and the drive-thru. That positioning makes Long John Silver’s one of the few national franchise options in quick-service seafood, which can help a site stand out in a trade area crowded with burger, chicken and pizza concepts.
Lenders view the brand through two lenses. On one side are decades of name recognition, a franchisee-driven ownership structure and a simple drive-thru model. On the other, the company’s own history shows a much smaller system today than at its peak, so a lender will look closely at local sales history, the condition of the building and whether the site has been remodeled. That makes careful, site-specific underwriting especially important.
Long John Silver’s Franchise Costs
Because the franchisor does not publish its cost figures on its franchising page, every amount in this section should come from the FDD you receive. The structure below shows how to read those numbers and how a lender will use them.
Initial Franchise Fee
Item 5 of the FDD discloses the initial franchise fee, when it is paid, whether it is refundable and whether different formats or development commitments carry different fees. The fee is usually a small share of a new restaurant’s total cost, but a lender will want it shown separately in your sources and uses.
Real Estate and Construction
The franchisor lists real estate and construction among its support functions. A traditional Long John Silver’s is a free-standing quick-service building with a drive-thru lane, which means site work, parking, utilities and the building itself can be the largest items in the budget. If you buy land, construction financing and the real estate loan become part of the package; if you lease, the lease terms and any tenant improvement allowance drive the numbers.
Fryers, Kitchen Equipment and Technology
A seafood quick-service kitchen relies heavily on commercial fryers, oil filtration and handling systems, freezer and cooler capacity for frozen seafood, hot-holding equipment, exhaust hoods and fire suppression, plus point-of-sale, drive-thru communication and digital ordering hardware. Item 7 groups these costs into equipment, signage and technology lines.
Opening Costs and Working Capital
Opening costs typically include training, pre-opening wages, opening inventory, grand opening marketing, licenses, deposits and insurance. Item 7 also includes an additional funds line for the early months of operation, which lenders use to judge whether your working capital cushion is adequate.
Reading the Item 7 Table
When you receive the FDD, organize your loan request around its Item 7 lines, which generally include:
- The initial franchise fee
- Real estate, rent and deposits, or land and building costs if you buy or build
- Construction, site work and leasehold improvements
- Furniture, fixtures and kitchen equipment
- Exterior signage and drive-thru equipment
- Computer, point-of-sale and digital systems
- Opening inventory
- Training, travel and pre-opening wages
- Grand opening advertising
- Permits, insurance and professional fees
- Additional funds for the initial operating period
Check whether the estimate excludes land or building costs and which format it describes, then add your own bids for anything excluded. Lenders compare every line against contractor bids, equipment quotes and the lease. Once you have a total, test the payment against projected cash flow with a conventional loan calculator.
Ongoing Fees and How They Affect Your Loan
Item 6 of the FDD lists the royalty, advertising or brand fund contribution, technology fees, transfer and renewal fees and any other recurring charges. Those fees come off the top of sales before food, labor, rent and debt service, so lenders deduct them first when they build a cash flow projection.
Seafood costs can move with commodity markets, and a fryer-heavy kitchen carries meaningful oil and utility costs. A projection that shows realistic food cost assumptions, labor scheduled around lunch and dinner peaks and the drive-thru’s share of sales will be more credible than one that simply applies an industry average.
Remodel obligations matter, too. The company says it has accelerated remodels in recent years, and the franchise agreement will describe when an owner may be required to update the building, signage or equipment. Lenders want to know whether a required remodel falls inside the loan term and how it will be funded; our article on financing a franchise remodel explains the options.
Franchisor Requirements for New Owners
Long John Silver’s does not publish minimum net worth or liquidity requirements on its franchising page. The franchisor collects applications through its franchise contact form and provides the FDD during the process, and the qualification standards it applies will be part of those discussions.
Prepare as though both the franchisor and the lender will want to see a current personal financial statement, proof of liquid funds, tax returns and a résumé showing restaurant or multi-unit management experience. If you are buying an existing restaurant, the franchisor will also need to approve you under the transfer provisions in the franchise agreement.
Ways to Own a Long John Silver’s
Developing a New Restaurant
A new restaurant gives you a current building design and a fresh lease or owned site, but it also requires the largest outlay and comes with no operating history. Lenders will rely on your experience, the site analysis, construction bids and projections. Our page on franchise start-up financing explains how new-unit loans are typically structured.
Buying an Existing Restaurant
Buying an operating Long John Silver’s from a current franchisee gives a lender historical sales and expenses to evaluate. Look closely at sales trends, the age and condition of the building and equipment, the remaining franchise term and whether a remodel will be required as a condition of transfer. Our page on financing a franchise restaurant acquisition covers how acquisition loans are sized, and our article on buying a franchise resale walks through the diligence process.
Rebranding or Reopening a Former Restaurant Building
Some quick-service buildings, including former seafood restaurants, are available for conversion. Reusing an existing drive-thru building can reduce site work, though it may still need substantial updating to meet current brand standards. Ask the franchisor whether a given building is acceptable before committing to a purchase or lease.
Multiple Restaurants
The franchisor lists development support among its services. Owners who plan more than one restaurant should ask how development commitments, territories and opening schedules work, and should expect a lender to evaluate each additional unit on the strength of the first.
Financing Options for a Long John Silver’s Franchise
SBA 7(a) Loans
SBA 7(a) loans can combine construction or leasehold improvements, equipment, the franchise fee, inventory and working capital, and they can also finance the purchase of an existing restaurant with or without the real estate. For a brand that is not on the SBA Franchise Directory, a 7(a) loan is still possible only if the franchise relationship can be found eligible, which is covered in the SBA section below. See our page on SBA 7(a) loans for business and real estate.
SBA 504 Loans
When an owner buys land and a building or constructs a free-standing restaurant, an SBA 504 loan is designed for that kind of long-lived fixed asset. Like the 7(a) program, it depends on franchise eligibility, and it does not cover franchise fees or working capital, which would need separate financing. Learn more about SBA 504 loans for owner-occupied real estate.
Conventional Term Loans
Because Long John Silver’s is not on the SBA Franchise Directory, conventional financing is a natural starting point for many deals. Conventional lenders set their own requirements for equity, collateral and experience, and a borrower with restaurant experience, strong liquidity and real estate to pledge may find conventional terms workable. Our overview of conventional business loans explains how these loans compare with SBA programs.
Equipment Financing
Fryers, oil management systems, refrigeration, hoods, drive-thru systems and point-of-sale technology can often be financed separately through equipment loans or leases, secured by the equipment itself. That can reduce the cash needed at opening or the size of a main term loan. See our page on restaurant equipment financing and leasing.
Working Capital and Lines of Credit
Pre-opening wages, opening inventory, marketing and the months before sales stabilize all require cash. Established owners also face periodic needs for fryer replacement, roof or parking lot repairs and remodels. A working capital loan or line of credit can bridge those needs; our page on restaurant working capital financing explains the options.
Seller Financing on Resales
When you buy an existing restaurant, the seller may agree to carry part of the price as a promissory note. A seller note that sits alongside a bank loan is typically subordinate to it, and lending programs may limit how and when the note can be repaid. Every lender involved should know about the note from the start.
SBA Loans for Long John Silver’s Franchisees
SBA loans are made by participating lenders and partially guaranteed by the SBA. For a franchise borrower, the SBA must be satisfied that the franchise agreement does not give the franchisor so much control that the borrower is not independent. The SBA Franchise Directory lists brands whose agreements have already been found eligible, which lets lenders skip a separate review. Our article on how the SBA Franchise Directory works explains the process.
Long John Silver’s does not appear on the SBA Franchise Directory at the time of writing. In plain English, that means a lender cannot simply cite a directory listing to confirm eligibility. Under current SBA rules, a brand that is not listed generally needs its franchise documents reviewed and placed on the directory before a franchisee can use SBA 7(a) or 504 financing. Directory listings change, so check the current directory before you apply and ask the franchisor whether it has sought, or plans to seek, a listing.
Until a listing exists, the practical route for most Long John Silver’s deals is conventional financing, sometimes combined with equipment financing and seller financing on a resale. If the brand is added later, the SBA 7(a) program maximum is currently $5 million, though program rules can change.
Whether you use SBA or conventional financing, a few habits help:
- Give the lender the complete FDD and franchise agreement early so its review does not delay closing.
- Build your budget on the Item 7 categories, backed by contractor and equipment quotes.
- Document the source of your equity and keep it in place through closing.
- Prepare a business plan specific to your site, trade area and the building’s condition.
How Lenders Evaluate a Long John Silver’s Deal
Personal Credit and Financial History
Lenders review your credit report, tax returns and history with business debt. Explain any past credit problems in writing before the lender raises them.
Net Worth and Liquidity
Without published franchisor minimums, the lender’s own equity and reserve requirements set the bar. Expect a lender to look for enough liquidity left after closing to absorb construction overruns, a slow opening or an unplanned equipment repair.
Industry and Management Experience
Quick-service experience, especially managing fryer-based kitchens, drive-thru speed and food safety, carries real weight. If you will not run the restaurant yourself, lenders will want to know who will and what their track record is.
Business Plan and Projections
Your projections should reflect the brand’s model: counter and drive-thru sales, lunch and dinner peaks, seafood and oil costs, and the fees disclosed in Item 6. Show how your trade area supports a seafood concept and how you will market the opening.
The FDD and Franchise Agreement
Lenders read the FDD and franchise agreement for the term, renewal rights, transfer conditions, remodel requirements and default provisions. Item 10 discloses whether the franchisor offers financing, and Item 19 discloses whether the FDD includes financial performance representations.
Site, Lease and Real Estate
For a leased site, lenders want a lease term at least as long as the loan, renewal options and landlord cooperation on any lender or franchisor addendum. For an owned site, expect an appraisal and an environmental review, which can matter more on a parcel with prior commercial use.
Historical Financials for a Resale
For an existing restaurant, the lender will request several years of financial statements and tax returns, point-of-sale reports, royalty reports and the seller’s franchise agreement. Sales trends and any pending remodel requirements often drive how much a lender will finance.
The Drive-Thru Building and Fryer Kitchen
Most of a Long John Silver’s restaurant’s value sits in a free-standing building with a drive-thru lane and a kitchen built around frying. That makes the physical asset unusually important to a lender. On a resale or a conversion, a property condition review should cover the roof, HVAC, exhaust hoods, grease management, parking lot and drive-thru lane.
Fryers and oil systems wear with use and need regular replacement, and refrigeration for frozen seafood must stay reliable. Ask the franchisor which equipment and technology standards apply now, and build replacement into your long-range budget so the loan term and the equipment’s useful life line up.
Multi-Unit Growth and Development Agreements
Owners who want several restaurants should understand any development schedule the franchisor proposes, the territory rights it grants and what happens if openings fall behind schedule. Lenders generally finance the second and third restaurant based on how the first performs, how much cash it produces after debt service and how deep the management team is.
Some owners finance each restaurant separately, which keeps the risk of one location from affecting the others. Experienced operators with several stores sometimes consolidate into a single conventional facility once they have a track record that supports it.
Real-World Scenarios
An experienced restaurant manager building new. A general manager from another quick-service brand wants to develop a new Long John Silver’s on a leased pad site. Because the brand is not on the SBA Franchise Directory, the owner pursues a conventional loan for construction and equipment, with separate equipment financing for the fryers and drive-thru systems.
A buyer acquiring an existing restaurant. A buyer agrees to purchase an operating restaurant from a retiring franchisee. The lender bases the loan on the restaurant’s historical financial statements, the seller carries a subordinate note and the franchisor approves the transfer after a review of required updates.
An owner buying the real estate. A franchisee who has leased its building for several years has a chance to buy it. A conventional real estate loan may fit, and if the brand is later added to the SBA Franchise Directory, an SBA 504 loan could become another option to compare.
An operator adding a second location. An owner of one restaurant wants to open a second in a nearby town. The lender reviews the first restaurant’s financial statements and the owner’s management plan before sizing the new loan.
Common Mistakes to Avoid
- Assuming SBA financing is available without checking the current SBA Franchise Directory.
- Estimating costs before receiving and reading the FDD’s Items 5, 6 and 7.
- Overlooking excluded items such as land or building costs in the Item 7 estimate.
- Buying an older building without a property condition review of the roof, hoods and drive-thru lane.
- Ignoring a required remodel that falls inside the loan term.
- Leaving seafood and oil cost swings out of the projection.
- Using all available liquidity at closing and leaving no reserve.
For more on financing pitfalls in this industry, read our article on restaurant loan mistakes that cost owners the most.
Next Steps to Finance Your Long John Silver’s Franchise
Step 1: Contact the franchisor. Submit the franchise contact form, ask about qualification standards and request the current FDD.
Step 2: Review the FDD with advisors. Focus on Items 5, 6, 7, 10, 17 and 19 with a franchise attorney and an accountant.
Step 3: Check SBA eligibility. Confirm whether the brand is on the current SBA Franchise Directory, and plan for conventional financing if it is not.
Step 4: Choose a site or a restaurant to buy. Work with the franchisor’s real estate and development teams, and order a condition review for any existing building.
Step 5: Build your budget and projection. Use the Item 7 categories, contractor bids and equipment quotes to create a sources-and-uses table and a realistic projection.
Step 6: Assemble your lender package and compare structures. Gather tax returns, a personal financial statement, proof of equity, your résumé, the franchise documents and the lease or purchase contract, then compare conventional, equipment and working capital options.
Long John Silver’s Franchise Loan FAQs
How much does it cost to open a Long John Silver’s franchise?
The franchisor discloses its estimated initial investment in Item 7 of its FDD rather than on its public franchising page. The total depends heavily on whether you build, buy or lease, and on the condition of the site.
What is the Long John Silver’s franchise fee?
The initial franchise fee is disclosed in Item 5 of the FDD, which the franchisor provides during the application process.
What royalty and advertising fees does Long John Silver’s charge?
Item 6 of the FDD lists the royalty, advertising contribution and other recurring fees. Lenders deduct those fees from projected sales before measuring how much debt the restaurant can support.
How much liquid capital do I need?
The franchisor does not publish minimum net worth or liquidity figures on its franchising page. Ask for its current standards during the application process, and expect a lender to set its own equity and reserve requirements.
Is Long John Silver’s eligible for SBA loans?
Long John Silver’s does not appear on the SBA Franchise Directory at the time of writing. A brand that is not listed generally needs to be added before franchisees can use SBA 7(a) or 504 loans, so check the current directory and plan for conventional financing in the meantime.
Does Long John Silver’s offer financing to franchisees?
Item 10 of the FDD discloses whether the franchisor offers any direct or indirect financing. Its public franchising page does not describe a financing program.
Can I finance the fryers and kitchen equipment separately?
Often, yes. Fryers, refrigeration, hoods and drive-thru technology can frequently be financed with equipment loans or leases, which may reduce the size of the main loan.
Can I buy an existing Long John Silver’s restaurant?
Yes, when an owner sells and the franchisor approves the transfer. Lenders finance resales based largely on the restaurant’s historical financial statements and the condition of the building.
Can a first-time owner get a Long John Silver’s franchise loan?
First-time owners can qualify, but without SBA eligibility, conventional lenders tend to place even more weight on restaurant management experience, liquidity and collateral. Hiring an experienced general manager can strengthen an application.
What documents do I need for a Long John Silver’s franchise loan?
Expect to provide personal tax returns, a personal financial statement, a résumé, proof of equity, the FDD and franchise agreement, a business plan with projections, construction bids or equipment quotes and the lease or purchase contract. For a resale, add the restaurant’s financial statements and tax returns.
How long is the Long John Silver’s franchise agreement?
Item 17 of the FDD and the franchise agreement set out the term, renewal rights and transfer conditions. Lenders generally want the remaining franchise term to be at least as long as the loan.
Final Thoughts
A Long John Silver’s franchise loan starts with the FDD, because the franchisor keeps its fee and investment figures in that document rather than on its public pages. Owners who read Items 5, 6 and 7 carefully, check the brand’s SBA Franchise Directory status, inspect the building and keep a reserve after closing give a lender the clearest picture of a sound deal.
US Professional Funding helps franchise owners compare conventional, SBA, equipment and working capital financing for new restaurants, acquisitions and multi-unit growth. Explore our franchise financing options and our restaurant financing page, and talk with a specialist about your Long John Silver’s project.
