How to Finance an OHSO Brewery Franchise: Brewpub Costs
By Chris Cornella
An OHSO Brewery franchise loan finances one of the most capital-intensive formats in franchising: a full-service brewpub with an on-site brewhouse, a large kitchen, a bar and a big dog-friendly patio. Compared with a typical quick-service restaurant, the buyer is financing brewing equipment, alcohol licensing and a much larger footprint, and the loan has to be built around all of it.
This article explains what the brand is, which costs to confirm in the franchise disclosure document, what the brand’s SBA Franchise Directory listing and lease note mean, and how lenders are likely to look at a brewpub franchise from a regional brand.
US Professional Funding is not affiliated with, sponsored by or endorsed by OHSO Brewery; the name is used only to describe the business. Figures from the franchisor’s disclosure document can change, loan programs vary, and every loan is subject to approval. Nothing here is legal, tax or investment advice; review the current Franchise Disclosure Document (FDD) and franchise agreement with a franchise attorney and accountant.
OHSO Brewery Franchise Loan at a Glance
- Concept: a neighborhood brewery and restaurant, styled O.H.S.O. Brewery + Distillery, known for house-brewed beer, spirits, scratch food, bike-themed decor and dog-friendly patios.
- Background: brewing and pouring in the Phoenix area since 2011, starting in the Arcadia neighborhood.
- Locations: Arcadia, Downtown Gilbert, Paradise Valley, North Scottsdale and Sunnyslope, among others in the Phoenix area.
- Franchise fees and investment: not published on the company’s website; Items 5, 6 and 7 of the FDD disclose them.
- SBA Franchise Directory: listed under code S9006, with a note about the Lease Addendum when real estate secures the loan.
What Is OHSO Brewery?
O.H.S.O. began when a small group of partners with backgrounds in music, bars and restaurant management took over an aging cafe building in Phoenix’s Arcadia neighborhood and converted it, with help from family and friends, into a brewpub. The company says it has been brewing, distilling and pouring in the neighborhoods its team lives in since 2011, and it has expanded across the Phoenix area to Downtown Gilbert, Paradise Valley, North Scottsdale and Sunnyslope.
The concept draws on the craft beer and homebrewing movements. Guests can brew their own beer alongside the company’s brewers and come back to drink it with friends. The North Scottsdale location makes hand-crafted spirits on site, and the company reports more than 70 national and international medals across its beers and spirits.
Dog-friendly by design. Patios are central to the brand. Locations feature large patios, yard games and, at Downtown Gilbert, an enclosed dog park. The company makes dog treats from spent brewing grain and supports animal charities, and its decor leans on bicycles, with bike-chain chandeliers and locations near bike paths.
Franchising. The company does not publish a franchise program on its website, but the brand is listed on the SBA Franchise Directory, which means its franchise documents have been reviewed for SBA lending. At least one Phoenix-area location has been opened by an outside ownership group operating under the brand. Prospective owners should contact the company directly and request the current FDD.
How lenders view it. Lenders will see a well-known regional brand with a distinctive concept, but a franchise system with limited public information and a capital-heavy format. Expect close attention to the borrower’s restaurant and brewing experience, liquidity and the specific site. Our article on financing an emerging franchise explains how lenders approach newer franchise systems.
OHSO Brewery Franchise Costs
The company does not publish its franchise fee or investment range, so confirm each category below in Items 5, 6 and 7 of the current FDD.
Initial franchise fee. Item 5 discloses the fee and any development fees for multiple locations.
Real estate and build-out. A brewpub of this style needs a large indoor dining room and bar, a commercial kitchen, a brewhouse area with drainage, utilities and ventilation, and a substantial patio. Build-out is likely the largest line in Item 7, and costs vary widely with the building’s condition and whether it is leased or owned.
Brewing equipment. The brewhouse, fermenters, brite tanks, glycol chilling, keg washing, draft systems and grain handling are specialized and expensive. A location that also distills would need still equipment and additional permitting.
Kitchen, furniture and fixtures. Cooking line, refrigeration, dish equipment, point-of-sale systems, patio furniture and dog park features all belong in the budget.
Licensing and permits. A brewpub needs a federal brewer’s permit and state and local liquor licenses, along with health, building and fire approvals. Licensing timelines can delay opening, so budget carrying costs for the waiting period.
Opening inventory and working capital. Grain, hops, food inventory, kegs and supplies, plus pre-opening payroll and a working capital reserve for the first months. Remember that beer has to be brewed and conditioned before opening day.
For more on funding a new brewery, see our craft brewery start-up financing options.
Ongoing Fees and How They Affect Your Loan
Item 6 of the FDD discloses the royalty, any brand or marketing fund, technology fees and transfer and renewal fees. It may also cover required purchases, such as proprietary recipes or ingredients.
Lenders subtract royalties and marketing obligations from projected revenue before calculating whether the brewpub can cover its loan payments. In a full-service brewpub, labor, food cost and occupancy are already heavy, so lenders will look carefully at the margin left for debt service.
Franchisor Requirements for New Owners
The company does not publish net worth, liquidity or experience requirements. Given the format, expect the franchisor to look for operators with full-service restaurant or bar experience and the capital to fund a large build-out. Ask for the requirements in writing early, because your lender will want to see that you meet them, and ask how training, brewing support and recipe access work.
Ways to Own an OHSO Brewery
A new location. Most opportunities are likely to be new locations, financed on projections, the owner’s experience and the site.
Converting an existing restaurant or brewery. The original Arcadia location was itself a conversion of a former cafe. A second-generation restaurant, bar or brewery building can reduce build-out costs. If you are buying an existing brewery to convert, our article on how to buy a craft brewery covers the due diligence.
Buying an existing franchised location. If a franchised location is offered for sale, the franchisor must approve the transfer and lenders will underwrite its actual financials.
Financing Options for an OHSO Brewery Franchise
SBA 7(a) loans. Because the brand is listed on the SBA Franchise Directory, an SBA 7(a) loan can combine the franchise fee, build-out, equipment, licensing costs and working capital.
SBA 504 loans. For owners who buy the building, an SBA 504 loan can finance owner-occupied real estate and long-lived brewing assets. Read more about brewery real estate and expansion financing.
Conventional term loans. Experienced multi-unit restaurant operators with strong balance sheets may use conventional financing, particularly when real estate is part of the deal.
Equipment financing. Brewhouse systems, fermenters, glycol chillers, draft systems and kitchen equipment can often be financed or leased separately. Learn more about craft brewery equipment financing and leasing.
Working capital and lines of credit. A line of credit can cover ingredient purchases, keg inventory and seasonal swings in patio traffic. See our brewery working capital and credit lines.
Seller financing on resales. If a franchised location is sold, a seller may carry part of the price. Any seller note must be acceptable to the senior lender, is typically subordinate to it, and loan programs may limit its structure.
SBA Loans for OHSO Brewery Franchisees
The SBA Franchise Directory lists brands whose franchise agreements have been reviewed for SBA eligibility, and SBA lenders generally require a listing before making an SBA-guaranteed loan to a franchisee. A listing clears the franchise relationship for review; it does not approve any borrower.
The listing and its note. OHSO Brewery appears under code S9006 with this note: when the real estate where the franchise business is located will secure the SBA-guaranteed loan, the Lease Addendum may not be executed. In plain English, the franchisor’s Lease Addendum is an add-on to a commercial lease that typically gives the franchisor certain rights in the tenant’s lease. It is meant for leased locations. If the borrower or an affiliate owns the building and pledges it to secure the SBA loan, the addendum should not be signed, because it could conflict with the lender’s interest in the property. If you lease, the addendum applies as usual and your lender will review it with the lease.
The SBA 7(a) program maximum is currently $5 million, although program rules can change. A large brewpub with real estate can approach that limit, so some buyers pair 7(a) with 504 or conventional financing.
Application tips. Provide the FDD and franchise agreement, the lease or purchase contract, a build-out budget with contractor bids, an equipment list, a licensing timeline, monthly projections, personal financial statements and tax returns. Our article on reading a Franchise Disclosure Document for financing explains what lenders look for.
How Lenders Evaluate an OHSO Brewery Franchise Loan
Personal credit and financial history. Lenders review credit, tax returns and a personal financial statement, and owners typically sign a personal guarantee.
Net worth and liquidity. A large build-out with a licensing wait calls for meaningful reserves after closing.
Industry experience. Full-service restaurant and bar management experience is close to essential, and brewing experience or a qualified head brewer strengthens the request.
Business plan and projections. Model food and beverage sales separately, patio seating and seasonality, brewing costs and labor across a long day. Arizona-style patio traffic, for example, can swing with summer heat.
The FDD and franchise agreement. Lenders review term, renewal and transfer terms (Item 17), any franchisor financing (Item 10) and whether Item 19 includes financial performance representations.
Site and lease. Lenders want the lease term to cover the loan and will review the Lease Addendum, utilities for brewing and parking.
Brewhouse and Equipment
The brewhouse is what separates this franchise from a standard restaurant loan. Equipment is long-lived and can serve as collateral, but it is specialized, so lenders may value it conservatively. Buyers should get detailed quotes, include installation, utility upgrades and drainage in the budget, and plan for maintenance. Separate equipment financing can preserve cash for licensing and opening costs.
Multi-Unit Growth and Development Agreements
If the franchisor offers development rights, Item 5 and Item 12 describe the fees, schedule and territory. Given the capital involved in each brewpub, lenders will usually want the first location open and performing before financing a second, then underwrite combined cash flow.
Real-World Scenarios
A restaurant group adding a brewpub. An operator with several full-service restaurants leases a second-generation restaurant building, finances the franchise fee, conversion and brewhouse with an SBA 7(a) loan and equipment financing, and keeps a reserve for the licensing period.
An owner who buys the building. A buyer purchases a freestanding building with patio space. The real estate is financed with SBA 504, and because the property secures the loan, the Lease Addendum is not signed.
A brewery owner converting. An independent brewery owner explores converting to the brand, bringing several years of financials to support the conversion budget.
Common Mistakes to Avoid
- Underestimating brewhouse utility, drainage and installation costs
- Ignoring the time needed for brewing and liquor licenses
- Opening without beer brewed and conditioned ahead of launch
- Signing the Lease Addendum when the property secures the SBA loan
- Leaving too little working capital for a large full-service payroll
For more brewery-specific pitfalls, read the craft brewery loan mistakes that cost owners the most.
Next Steps to Finance Your OHSO Brewery Franchise
Step 1: Contact the franchisor and 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 about net worth, liquidity, experience and brewing support.
Step 3: Find and evaluate a site. Check utilities, patio space, parking and zoning for brewing.
Step 4: Price the build-out and equipment. Get contractor and equipment quotes and a licensing timeline. Our SBA loan calculator can help with early payment estimates for planning only.
Step 5: Talk to a financing specialist. Decide how to combine SBA 7(a), 504, equipment and working capital financing.
Step 6: Apply, close and open. Coordinate the loan with the lease, licensing and the franchisor’s training schedule.
OHSO Brewery Franchise Loan FAQs
How much does an OHSO Brewery franchise cost?
The company does not publish its investment range. Item 7 of the current FDD lists each cost; a brewpub with on-site brewing typically requires a large build-out and equipment budget.
What are the franchise fee and royalty?
They are disclosed in Items 5 and 6 of the FDD and are not published on the company’s website.
Can I get an SBA-backed OHSO Brewery franchise loan?
The brand is listed on the SBA Franchise Directory under code S9006, so lenders can review an SBA 7(a) or 504 request. Each borrower still has to qualify.
What does the SBA note about the Lease Addendum mean?
If the real estate where the brewpub is located secures the SBA loan, the franchisor’s Lease Addendum may not be signed. If you lease, it applies normally.
Do I need brewing experience?
Not necessarily, but lenders want to see strong restaurant and bar experience and a plan for qualified brewing staff.
Can I finance the brewhouse separately?
Often, yes. Brewing and kitchen equipment can be financed or leased separately to preserve cash.
Does OHSO Brewery offer financing?
Check Item 10 of the current FDD for any franchisor financing. Most owners arrange their own SBA or conventional financing.
How long is the franchise term?
Item 17 of the FDD sets out the term, renewal and transfer terms. Lenders want the franchise term and lease to run at least as long as the loan.
Does the FDD include financial performance information?
Review Item 19 of the current FDD to see whether it includes financial performance representations.
Can I open more than one location?
Possibly, if the franchisor offers development rights. Lenders usually want the first location performing before financing the next.
Final Thoughts
An OHSO Brewery franchise loan finances a large, equipment-heavy brewpub from a regional brand with limited public franchise information. Buyers who obtain the FDD early, budget fully for the brewhouse and licensing, understand the SBA Lease Addendum note and keep strong reserves will be best positioned to finance their location.
US Professional Funding helps franchise owners and buyers finance start-ups, equipment, real estate and working capital. Learn more about our franchise financing and craft brewery financing solutions.
