How to Finance an Osmow’s Shawarma Franchise: SBA Notes and Costs
By Anthony Cornella
An Osmow’s Shawarma franchise loan finances a fast-casual Middle Eastern restaurant built around chicken shawarma, rice and fries bowls, wraps and salads. The money typically goes into a leased restaurant space, a kitchen built for vertical rotisseries and grills, a service line, signage, opening inventory and working capital for the launch period.
Osmow’s started in Ontario, Canada, and has been opening restaurants in the United States, so U.S. buyers are often looking at a brand that is well known north of the border but newer in their own market. This article explains how financing for an Osmow’s restaurant usually works, what the brand’s SBA Franchise Directory listing and its three directory notes mean in plain English, and how lenders approach new and existing restaurants.
US Professional Funding is not affiliated with, sponsored by or endorsed by Osmow’s Shawarma; the name is used only to describe the business. Figures in the franchisor’s disclosure document can change, loan programs and terms vary by lender and borrower, and every loan is subject to lender review and approval. Nothing here is legal, tax or investment advice; review the current Franchise Disclosure Document (FDD) and franchise agreement with a qualified franchise attorney and accountant.
Osmow’s Shawarma Franchise Loan at a Glance
- Concept: fast-casual Middle Eastern restaurant serving shawarma in wraps, salads, rice bowls and fries bowls, with meat and plant-based protein options.
- Typical sites: in-line shopping center units and mall food court or dining pavilion locations.
- Fees and investment: set out in Items 5, 6 and 7 of the current U.S. FDD; request it from the franchisor and confirm every figure before applying.
- SBA Franchise Directory: listed as Osmow’s (code S8618) with three notes covering the franchisor’s purchase option, documents tied to real estate collateral and lien position.
- Main financing routes: SBA 7(a) loans, conventional term loans, equipment financing and working capital lines.
What Is Osmow’s Shawarma?
Osmow’s is a family-founded shawarma chain that began with a single restaurant in Ontario and grew through franchising across Canada before expanding into the United States. The company describes itself as North America’s largest Middle Eastern restaurant chain and has opened U.S. restaurants in states including Florida, Virginia and Michigan.
The menu. The signature items are chicken shawarma served in pita wraps, on salads, over rice in the brand’s trademarked rice bowls or over fries in its fries bowls, topped with garlic sauce, tahini and sumac. The brand also promotes keto-friendly options, multiple proteins, vegetarian and vegan choices and customizable meals.
Formats. Recent U.S. openings include a mall dining pavilion and shopping center locations, which points to a mix of food court and in-line units. Each format has a different build-out cost and lease structure, which shapes the loan.
How lenders see the brand. Lenders like a focused menu, a recognizable concept and a franchisor with a long operating history. The challenge in the U.S. is that brand awareness varies by market, and a lender may have little local sales data for the concept. That shifts more weight onto the site, the lease, the operator’s restaurant experience and the borrower’s liquidity.
Osmow’s Shawarma Franchise Costs
The franchisor’s U.S. FDD is the only reliable source for current fees and investment ranges. Because fees and investment ranges are updated with each disclosure document, this section explains what each cost category covers and how lenders treat it, so you know what to look for in Items 5 through 7.
Initial franchise fee. Item 5 sets the fee for a single restaurant and any multi-unit or development fees. Lenders generally finance the franchise fee as part of an SBA 7(a) or conventional loan, but it has no collateral value, so it increases the amount of cash flow the lender needs to see.
Lease and build-out. An in-line restaurant usually needs plumbing, grease management, ventilation hoods and fire suppression for the shawarma broilers and grills, electrical upgrades, a service counter, seating and the brand’s interior design. A food court unit typically has a smaller footprint and shared seating, but mall leases often carry their own construction standards and charges. Landlord tenant improvement allowances can reduce the cash you need.
Equipment. Expect vertical shawarma broilers, grills, fryers for fries bowls, rice cookers and warmers, refrigerated prep tables, walk-in or reach-in coolers and freezers, hood systems, dishwashing, a point-of-sale system and digital menu boards.
Opening inventory and working capital. Proteins, produce, rice, sauces, packaging and cleaning supplies make up opening inventory. Working capital covers payroll, rent and marketing while the restaurant builds a local customer base, which can take longer in a market where the brand is new.
Total investment. Item 7 of the FDD lists the estimated initial investment by line item. Lenders will look for:
- Initial franchise fee
- Lease deposits and rent during construction
- Leasehold improvements, architecture and permits
- Kitchen equipment, hoods and fire suppression
- Furniture, fixtures, decor and signage
- Point-of-sale and technology
- Opening inventory, training and grand opening marketing
- Additional funds for the initial operating period
Make sure your loan budget matches the Item 7 categories and your own contractor bids, and that any differences are explained.
Ongoing Fees and How They Affect Your Loan
Royalty and marketing fund. Item 6 lists the royalty and advertising or brand fund contributions, usually as percentages of gross sales. Because they come off the top of sales, lenders deduct them before calculating cash available to repay the loan.
Technology and other fees. Point-of-sale, online ordering and delivery platform fees, plus transfer, renewal and training fees, also appear in Item 6. Third-party delivery commissions can take a meaningful slice of sales in a fast-casual restaurant, so model them separately.
Remodels. Check the franchise agreement for remodel or refresh obligations during the term, and plan for them in long-range cash flow.
How lenders factor these in. Lenders build a projection that starts with expected sales, deducts food and paper costs, labor, rent and every franchise fee, and then measures what is left against the proposed loan payment.
Franchisor Requirements for New Owners
Osmow’s minimum net worth, liquid capital and experience expectations for U.S. candidates should come from the franchisor’s development team and the FDD. Expect the franchisor to look for restaurant or multi-unit operating experience, available capital, commitment to the brand’s standards and alignment with its family-run culture.
The approval process. Most franchisors follow a similar path: an inquiry, an introductory call, review of the FDD, an application and financial review, a meeting with the leadership team, site selection and approval, and signing the franchise agreement. Lenders usually want to see the franchise agreement signed or approved and a lease or letter of intent before issuing a commitment.
Ways to Own an Osmow’s
A new restaurant. Most U.S. buyers will develop a new restaurant. Financing covers the fee, build-out, equipment, opening costs and working capital. Our franchise start-up financing page explains how we approach these deals.
Multi-unit development. In markets where the brand is expanding, a franchisor may offer development rights for several restaurants. Lenders generally finance one restaurant at a time and want each to perform before funding the next.
Buying an existing restaurant. As the U.S. system matures, existing restaurants may come up for sale. The buyer acquires equipment, lease rights and goodwill with franchisor approval, and lenders can underwrite actual results. See our franchise restaurant acquisition financing.
Financing Options for an Osmow’s Shawarma Franchise
SBA 7(a) loans. The brand is on the SBA Franchise Directory, so the SBA 7(a) loan program is a common starting point. It can bundle the franchise fee, build-out, equipment, inventory and working capital in one loan. The directory notes below matter for how the loan is documented.
SBA 504 loans. The SBA 504 loan program fits owner-occupied real estate and long-lived equipment. Most Osmow’s restaurants are leased, but an owner buying a freestanding building or pad site could consider it. Note the directory’s lien-position note applies to both lenders and certified development companies.
Conventional term loans. Multi-unit restaurant operators with strong financials may prefer a conventional business loan, which is underwritten on cash flow, collateral and experience and is not subject to SBA directory notes.
Equipment financing. Shawarma broilers, grills, fryers, refrigeration and hood systems can be financed separately with the equipment as collateral. Learn more about restaurant equipment financing and leasing.
Working capital and lines of credit. A new restaurant in a market where the brand is still building awareness may need extra cash for marketing and labor during the ramp-up. See our 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 lender, and SBA rules may limit how it is structured. Read more about restaurant seller financing.
SBA Loans for Osmow’s Shawarma Franchisees
The SBA Franchise Directory lists brands whose franchise agreements have been reviewed for SBA eligibility. SBA lenders generally require a brand to be listed before making an SBA-guaranteed loan to one of its franchisees. Our article on how the SBA Franchise Directory works explains the basics.
The Osmow’s listing. The brand appears on the directory as Osmow’s under code S8618. The listing carries three notes. In plain English:
- The franchisor’s purchase option. The franchise documents give the franchisor an option to buy the franchise at any time. The directory note says that option may not be enforced if the franchisee obtains SBA assistance. For a borrower, that means the SBA-financed business is protected from a forced buyout under that clause while SBA assistance is in place.
- Documents tied to real estate collateral. When the real estate where the restaurant operates secures the SBA-guaranteed loan, the Option to Assume (Tri-Party Agreement) and the Franchisor Rights Rider may not be executed. These documents generally give the franchisor rights over the location or lease. If you own the building and pledge it to the SBA lender, those documents cannot be signed for that loan.
- Lien position. The lender or certified development company must make sure it obtains the correct lien position on all collateral as required by SBA’s standard operating procedures. In practice, the franchisor’s documents cannot push the SBA lender into a weaker collateral position than SBA rules require.
What the notes mean for your deal. The notes do not prevent SBA financing. They tell the lender how to handle specific franchisor rights. Expect your lender and attorney to review the franchise agreement, any lease riders and the purchase option carefully, and to coordinate with the franchisor so the documents line up before closing. That review can add steps, so start early.
Loan size. The SBA 7(a) program maximum is currently $5 million, though program rules can change.
Application tips. Bring the FDD, franchise agreement and all riders, a lease or letter of intent, contractor bids and equipment quotes. Document the source of your cash injection and build projections that reflect the brand’s newness in your market. Our SBA loan calculator provides planning estimates only, not an offer or approval.
How Lenders Evaluate an Osmow’s Shawarma Franchise Loan
Personal credit and financial history. Lenders review credit, tax returns and a personal financial statement, and typically require personal guarantees.
Net worth and liquidity. Lenders look at the cash you inject and what remains after closing. A brand still building U.S. awareness makes reserves especially important.
Restaurant experience. Prior restaurant management, especially fast-casual or multi-unit experience, is one of the strongest factors in an approval.
Business plan and projections. Lenders want realistic sales assumptions, a ramp-up period, food cost for proteins and produce, labor for prep-heavy shawarma, rent, delivery commissions and franchise fees. Explain how you will market a newer brand in your trade area.
The FDD and franchise agreement. Lenders review Items 5, 6, 7, 10, 17 and 19, the term and transfer terms, and the provisions behind the three directory notes. Our article on how lenders read a Franchise Disclosure Document covers what they look for.
Site and lease. Lenders weigh traffic, co-tenants, visibility, parking, food court rules for mall units and whether the lease term covers the loan.
Historical financials for resales. Buyers of existing restaurants should provide several years of statements, sales reports and tax returns.
The Shawarma Kitchen
Shawarma kitchens have specific equipment needs. Vertical broilers require proper ventilation, hood coverage and fire suppression, and the prep work behind marinated proteins needs refrigerated storage and prep space. Fryers for fries bowls and rice cooking equipment add capacity and utility demands. These costs drive both the build-out budget and the equipment loan, and lenders often ask for detailed quotes. For an existing restaurant, ask about the age and condition of broilers, hoods and refrigeration.
Multi-Unit Growth
Operators who perform well with one Osmow’s often add restaurants in the same market, which spreads management and marketing costs. Lenders typically underwrite the first restaurant’s results together with the new one and want to see that each restaurant can carry its own debt. If you sign a development agreement, make sure your financing plan matches the opening schedule.
Real-World Scenarios
An experienced fast-casual operator entering a new market. A multi-unit restaurant owner signs on to open the first Osmow’s in a region. The lender relies on the owner’s track record and finances the build-out and equipment with an SBA 7(a) loan, while the owner keeps extra working capital for launch marketing.
A food court unit. A first-time owner with restaurant management experience opens in a mall dining area. The smaller build-out reduces the loan, and the lender focuses on the mall lease and food court traffic.
A buyer who owns the building. An owner buys a freestanding building for a new restaurant and pledges it as collateral. The lender confirms the tri-party and rider documents are not executed for that loan and secures the correct lien position.
Common Mistakes to Avoid
- Assuming Canadian results translate directly to a U.S. market
- Starting the SBA process without reviewing the three directory notes
- Underestimating ventilation and fire suppression costs
- Leaving out delivery commissions from projections
- Underfunding marketing for a brand that is new to the area
- Signing a lease shorter than the loan term
For more pitfalls, read the restaurant loan mistakes that cost owners the most.
Next Steps to Finance Your Osmow’s Shawarma Franchise
Step 1: Request the U.S. FDD. Contact the franchisor and get the current disclosure document.
Step 2: Review it with advisors. Study Items 5, 6, 7, 10, 17 and 19 and the franchise agreement riders.
Step 3: Organize your finances. Prepare tax returns, bank statements and a personal financial statement.
Step 4: Talk with a financing specialist. Discuss SBA, conventional and equipment options and the directory notes.
Step 5: Secure a site. Get a lease letter of intent and contractor bids.
Step 6: Apply and coordinate documents. Align franchisor, landlord and lender paperwork, then close.
Osmow’s Shawarma Franchise Loan FAQs
How much does an Osmow’s franchise cost in the U.S.?
The estimated initial investment is in Item 7 of the current U.S. FDD. It depends on whether you open an in-line or food court restaurant, the build-out and landlord allowances.
What is the Osmow’s franchise fee?
Item 5 of the FDD sets the initial franchise fee and any development fees. Confirm the current amount with the franchisor.
What royalty does Osmow’s charge?
Item 6 lists the royalty, marketing contributions and other ongoing fees.
Can I get an Osmow’s Shawarma franchise loan through the SBA?
Yes. The brand is listed on the SBA Franchise Directory under code S8618. The listing has three notes that affect how the loan is documented, but they do not prevent SBA financing.
What does the purchase option note mean?
The franchisor’s option to buy the franchise at any time may not be enforced while the franchisee has SBA assistance.
Can I use my building as collateral?
Yes, but if the restaurant’s real estate secures the SBA loan, the Option to Assume tri-party agreement and the Franchisor Rights Rider may not be executed.
Does Osmow’s offer financing?
Review Item 10 of the FDD for any franchisor financing.
Can I finance the kitchen equipment separately?
Yes. Broilers, grills, fryers and refrigeration can often be financed with equipment loans or leases.
Can a first-time owner qualify?
Possibly, if the franchisor approves the candidate and the borrower has strong liquidity and some restaurant management experience.
How long is the franchise term?
The term and renewal rights are in Item 17 and the franchise agreement.
Final Thoughts
An Osmow’s Shawarma franchise loan combines a familiar restaurant financing structure with a few brand-specific details: a concept that is newer in many U.S. markets, a shawarma kitchen with real ventilation needs and three SBA directory notes that shape the documents. Buyers who get the FDD early and involve a lender familiar with franchise SBA loans give themselves a smoother path.
US Professional Funding helps franchise owners finance start-ups, acquisitions, equipment and working capital. Learn more about our franchise financing and restaurant financing solutions.
