How to Finance a Melty Way Franchise: Grilled Cheese Costs
By Chris Cornella
A Melty Way franchise loan funds a fast-casual restaurant built around one comfort food: the grilled cheese sandwich, made to order with gourmet cheeses, breads and fillings and paired with soups and sides. The menu is simple, but the restaurant still needs a finished space, a hot line, refrigeration, a trained crew and enough cash to carry the first months.
Below we cover the costs behind a Melty Way opening, the brand’s SBA Franchise Directory notes and what lenders check. We could not verify the franchisor’s figures, so we show where each number sits in the Franchise Disclosure Document (FDD).
US Professional Funding is not affiliated with, sponsored by or endorsed by Melty Way; the name is used only to describe the business. Figures in the franchisor’s disclosure document can change, loan programs differ by lender and borrower, and every loan is subject to approval. Nothing in this article is legal, tax or investment advice; have a franchise attorney and an accountant review the current FDD and franchise agreement before you commit.
Melty Way Franchise Loan at a Glance
- Concept: a Utah-born fast-casual restaurant serving gourmet grilled cheese sandwiches, melts, soups and sides.
- Format: counter service with a compact griddle-and-press kitchen.
- Franchise fee, royalty and brand fund: not verified from franchisor materials; read Items 5 and 6 of the current FDD.
- Total investment: not verified; the Item 7 table of the current FDD gives the range and each line item.
- Net worth and liquid capital: ask the franchisor for its written requirements.
- SBA Franchise Directory: listed as Melty Way (code S7645), with notes on area representative agreements and lease documents, explained below.
- Likely financing routes: SBA 7(a), conventional term loans, equipment financing and working capital lines.
What Is Melty Way?
Melty Way grew out of Utah as a grilled cheese specialist: sandwiches pressed on a griddle with combinations that go well beyond American cheese on white bread, plus tomato soup and other comfort sides. Guests order at a counter and food is cooked to order.
The brand has franchised restaurants beyond its home state, and some newer locations are marketed under the shorter name Melty. Confirm in the FDD which trademarks your agreement licenses, since loan documents should match the franchise agreement.
How lenders see the concept. A narrow menu means fewer ingredients, simpler training and a smaller kitchen, which lenders like. But Melty Way is a young, smaller franchise system with limited public operating history, so your experience, equity and site carry more weight. Our article on financing an emerging franchise explains how lenders adjust.
Melty Way Franchise Costs
Initial franchise fee. Item 5 lists the fee, when it is paid and any refund terms. If you sign for more than one restaurant, Item 5 also shows any development fee. Because the franchise fee buys an intangible right rather than equipment or property, lenders usually expect it to be covered by your equity or included in a broader loan secured by other assets.
Build-out of the space. Leasehold improvements are usually the largest line. A grilled cheese kitchen needs a hood and fire suppression over the griddles, electrical capacity, sinks, a grease interceptor where required and a finished counter and dining area. A former sandwich space can cut costs if its systems fit. Our article on restaurant build-out financing covers construction draws.
Opening costs and working capital. Inventory, packaging, training travel, pre-opening wages, marketing, deposits and the “additional funds” line in Item 7 all need cash before opening day.
Total investment. When you turn the Item 7 table into a budget, make sure your loan request and equity together cover each of these lines:
- Initial franchise fee
- Design, permits and licenses
- Leasehold improvements
- Kitchen equipment, smallwares and furniture
- Point-of-sale system and signage
- Opening inventory and packaging
- Training, deposits and insurance
- Grand-opening marketing and additional funds
Ongoing Fees and How They Affect Your Loan
Item 6 of the FDD lists every recurring payment to the franchisor: typically a royalty on gross sales, a brand fund contribution, possibly local advertising, technology fees, and transfer, renewal and training fees.
Why lenders care. Royalties and fund contributions come off the top of sales, before food, labor, rent and loan payments. Lenders subtract them first, then test whether the remaining cash flow covers debt service with a cushion. With a modest average check, volume and labor scheduling drive how much room is left.
Franchisor Requirements for New Owners
We could not verify published net worth or liquidity minimums from the franchisor’s own materials, so request them in writing. In general, expect the franchisor to look for:
- Restaurant or retail management experience, or a plan to hire an experienced manager
- Liquid capital to cover your equity injection plus reserves
- A site in a market the franchisor is willing to develop
- Commitment to complete training and run the restaurant to brand standards
The approval path. Expect an application with a personal financial statement, interviews, the FDD (delivered before you sign or pay), site approval and the franchise agreement. Start financing talks early, since the lease and loan usually move in parallel.
Ways to Own a Melty Way
Open a new restaurant. Most buyers in a younger system build a new location. Lenders underwrite these deals on your projections, experience and equity, and want a signed or near-final lease.
Buy an existing restaurant. If a franchised location is for sale, the purchase is a transfer that needs franchisor approval. A resale gives a lender real sales and expense history to review. See our article on buying a franchise resale.
Develop more than one location. Operators who want several restaurants may sign a development agreement; see the multi-unit section below.
Financing Options for a Melty Way Franchise
SBA 7(a) loans. With the brand on the SBA Franchise Directory, an SBA 7(a) loan can combine build-out, equipment, the franchise fee, opening costs and working capital in one loan with a longer repayment period than many conventional options.
SBA 504 loans. If you buy a freestanding building or pad site, an SBA 504 loan may fit the real estate. Most grilled cheese restaurants lease retail space, so 504 suits mainly owners who want the property.
Conventional term loans. Borrowers with strong liquidity, collateral and restaurant experience may qualify for a conventional business loan, which can involve fewer program requirements.
Equipment financing. Griddles, panini-style presses, refrigeration and point-of-sale hardware can be financed separately, with the equipment as collateral. Learn more about restaurant equipment financing and leasing.
Working capital and lines of credit. Pre-opening wages, training and the first months of food and labor costs strain cash. A line of credit can also help with soup-season swings in traffic and with vendor terms. See our restaurant working capital options.
Seller financing on resales. A seller may agree to carry part of the price on an existing restaurant. Seller notes are typically subordinate to the senior loan, and loan programs, including SBA, may limit how they are structured and repaid.
SBA Loans for Melty Way Franchisees
The SBA Franchise Directory lists brands whose franchise documents have been reviewed for SBA eligibility. A listing does not approve any borrower, but it lets an SBA lender consider a loan to the brand’s franchisees without a separate document review.
Melty Way’s listing. The brand appears as Melty Way under code S7645, with two notes:
- Area representatives are not eligible: an applicant operating under an Area Representative Agreement cannot get SBA financing. An area representative recruits and supports franchisees in a region for the franchisor; that business needs conventional financing. Owners operating restaurants under a standard franchise agreement are not affected.
- Lease documents when you own the property: if the real estate where the restaurant operates will secure the SBA loan, the Lease Addendum and the Collateral Assignment of Lease and Consent of Landlord may not be signed. Those documents are built for leased sites; when you own the building and pledge it, they do not apply.
Program basics. The SBA 7(a) program maximum is currently $5 million, though program rules can change. Lenders still apply their own credit standards, and SBA loans generally require personal guarantees from owners above a set ownership level.
Application tips. Bring the FDD and franchise agreement, a lease or draft, an Item 7-based budget, bids, quotes, monthly projections, personal financial statements and tax returns. Our SBA loan calculator gives planning estimates only.
How Lenders Evaluate a Melty Way Deal
Credit, net worth and liquidity. Expect a review of credit reports, tax returns and a personal financial statement. Your equity injection must come from documented sources, with reserves left after closing.
Industry and management experience. Quick-service or fast-casual management experience helps. A first-time owner can strengthen the request by hiring a proven general manager.
Business plan and projections. Build the plan around transactions per day, average check, the lunch and dinner split, catering or online orders, food and packaging cost, labor hours, royalty and fund payments, rent and a realistic ramp-up period. A lender will test what happens if traffic opens slower than planned.
The FDD and franchise agreement. Lenders review the term, renewal rights, transfer conditions and default provisions. Item 10 discloses any franchisor financing, and Item 19 shows whether the FDD includes financial performance representations. Our guide to reading the FDD for financing covers the key items.
Site, lease and resale history. Lenders want a lease at least as long as the loan, rent that fits projected sales and landlord cooperation on lease documents. For a resale, provide several years of profit and loss statements and tax returns.
Equipment for a Grilled Cheese Kitchen
A grilled cheese line is built for speed at the griddle. Typical equipment includes flat-top griddles, sandwich presses, soup kettles or warmers, refrigerated sandwich prep tables, reach-in or walk-in refrigeration, a fryer or oven for sides if the menu calls for them, a three-compartment sink and dish area, and an exhaust hood with fire suppression.
Up front you will need a point-of-sale system, menu boards and seating. Long-lived equipment can support a Melty Way franchise loan as collateral or be financed on its own; ask which items must come from approved suppliers.
Multi-Unit Growth and Development Agreements
Before funding a second restaurant, lenders review the first one’s actual results, your management depth and remaining liquidity. Each opening is usually its own project.
If you sign a development agreement, compare its opening schedule with how long it really takes to find a site, finance and build. A development agreement is not an area representative agreement, so the SBA restriction above does not apply to it. Our article on multi-unit franchise financing explains how growth is funded.
Real-World Scenarios
A former quick-service manager opening a first restaurant. A buyer who ran a sandwich shop finds a second-generation space with a usable hood. An SBA 7(a) loan covers the remaining build-out, equipment and working capital.
An owner who buys the building. The real estate secures the loan, so the franchisor’s lease addendum and collateral assignment of lease are not signed, as the directory note requires.
A regional representative who also wants a restaurant. Because the directory excludes applicants operating under an area representative agreement, this buyer works with a conventional lender instead of pursuing SBA financing.
Common Mistakes to Avoid
- Budgeting from outside estimates instead of the current FDD’s Item 7 table
- Assuming any former restaurant space will fit without checking the hood, electrical and plumbing
- Overlooking the area representative restriction in the SBA Franchise Directory listing
- Signing a lease shorter than the loan term
- Leaving too little working capital for training, pre-opening wages and ramp-up
- Leaving royalty and fund payments out of the cash flow model
For more pitfalls across food service, read restaurant loan mistakes that cost owners.
Next Steps to Finance Your Melty Way Franchise
Step 1: Get the current FDD. Review Items 5, 6, 7, 10, 17 and 19 with a franchise attorney and accountant.
Step 2: Confirm the franchisor’s requirements. Ask for net worth, liquidity and experience minimums in writing, and confirm which trademarks your agreement covers.
Step 3: Build a project budget. Convert the Item 7 table into your own budget and update it with contractor and equipment quotes.
Step 4: Speak with a financing specialist. Learn your borrowing range, equity need and best-fit program before signing a lease.
Step 5: Lock in the site. Negotiate a lease that matches your loan term.
Step 6: Apply, close and build. Submit your plan, projections, financial documents, FDD and lease, then coordinate construction draws, equipment and hiring.
Melty Way Franchise Loan FAQs
How much does it cost to open a Melty Way franchise?
We could not verify a total from the franchisor’s own materials. The Item 7 table in the current FDD shows the estimated initial investment range and each line item.
What are the Melty Way franchise fee and royalty?
Item 5 of the FDD lists the initial franchise fee, and Item 6 lists the royalty, brand fund and other recurring fees.
Is Melty Way approved for SBA loans?
The brand is listed on the SBA Franchise Directory as Melty Way (S7645), so SBA lenders can consider loans to its franchisees, subject to normal credit approval and the listing’s notes.
Can an area representative use an SBA loan?
No. The directory note states that an applicant operating under an Area Representative Agreement is not eligible for SBA financing. Conventional loans remain an option.
Can I buy an existing Melty Way restaurant?
Yes, if a franchised location is for sale and the franchisor approves the transfer. Its sales history helps a lender underwrite a Melty Way franchise loan for the purchase.
Can a first-time owner get a Melty Way franchise loan?
It is possible. Expect a lender to want a larger equity contribution, solid reserves and an experienced manager on the team.
How much liquid capital do I need?
Ask the franchisor for its written minimums; lenders also expect a documented equity injection plus reserves.
Can I finance the equipment separately?
Usually. Griddles, presses and refrigeration can be financed with the equipment as collateral.
Does Melty Way offer financing?
Item 10 of the FDD discloses any franchisor financing; most franchisees arrange their own loans.
How long is the franchise agreement?
Item 17 and the franchise agreement state the term and renewal conditions. Lenders prefer a remaining term at least as long as the loan.
Final Thoughts
A Melty Way franchise loan funds a focused, fast-casual concept with a manageable kitchen, but a younger system means your own preparation carries extra weight. Build your budget from the current FDD, choose a space whose hood and utilities fit a griddle line, note the directory’s area representative and lease-document rules, and keep enough working capital for a steady ramp-up.
US Professional Funding helps franchise owners and buyers finance start-ups, acquisitions, equipment, working capital and refinancing. Learn more about our franchise financing programs and restaurant financing solutions.
