How to Finance a Rascal House Franchise: Cleveland Pizza Costs
By Anthony Cornella
A Rascal House franchise loan finances a Cleveland-born pizza restaurant that also sells burgers, subs, wings, fries and milkshakes, with dine-in seating, carryout, delivery and catering under one roof. Because the brand is a regional system with a small franchise footprint, lenders lean heavily on the buyer’s own restaurant experience, the site and a well-supported budget.
This article explains the concept, how to build a cost estimate from the Franchise Disclosure Document (FDD), what the brand’s SBA listing means and how to finance a new or existing restaurant.
US Professional Funding is not affiliated with, sponsored by or endorsed by Rascal House; the name is used only to describe the business. Figures from 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, so review the current FDD and franchise agreement with a franchise attorney and accountant before you sign.
Rascal House Franchise Loan at a Glance
- Concept: a pizza-focused quick-service restaurant from Cleveland, Ohio, with a broader menu of burgers, sandwiches, wings, fries, salads and shakes.
- Service channels: dine-in, carryout, delivery and catering for offices and events.
- Footprint: restaurants concentrated in the Cleveland area and Northeast Ohio.
- Fees, investment and requirements: we could not verify current figures from the FDD or the franchisor’s own materials, so use Items 5, 6 and 7 of the current FDD.
- SBA Franchise Directory: listed under code S1381, with a note about lease documents when real estate secures the loan.
What Is Rascal House?
Rascal House began as a pizza shop across from a university campus in downtown Cleveland and grew into a small chain of restaurants around Northeast Ohio, including suburban locations such as Mentor. The brand positions itself as a step above typical fast food, pairing its signature pizzas with a short but varied menu that appeals to students, families and office lunch crowds.
Alongside pizza, the menu covers burgers, subs, fries, wings, salads and milkshakes, and the brand runs limited-time pizzas. Catering adds a business-to-business channel.
Why lenders view it the way they do. Deep roots in one metro area mean real name recognition near Cleveland. Outside that market, a new restaurant has less awareness to lean on and few franchised units to compare against, so underwriting focuses on your experience, the trade area and conservative projections.
Rascal House Franchise Costs
We could not verify the brand’s current franchise fee, royalty, total investment or Item 7 line items from the FDD or the franchisor’s own pages, so this article does not quote them. Build your budget from the current FDD, contractor bids and equipment quotes for your site.
Initial franchise fee. Item 5 of the FDD states the fee and any reduced fee for additional restaurants. SBA 7(a) loans can generally include the franchise fee in the project cost, and conventional lenders often treat it as part of the equity injection.
Real estate and build-out. Most quick-service pizza restaurants lease strip-center or storefront space near campuses and offices. The kitchen needs ovens, a grill and fryer line, a hood and fire suppression system and walk-in refrigeration, and older buildings may need grease traps, electrical upgrades or gas service. Our article on restaurant build-out financing explains how lenders handle construction draws.
Equipment. Pizza ovens, dough mixers, refrigerated make tables, fryers, flat-top grills, a milkshake machine, walk-in coolers, a point-of-sale system and delivery gear.
Opening costs and working capital. Opening inventory, training travel, licenses, deposits, insurance, grand opening marketing and a cash cushion to carry payroll and rent until sales build.
Total investment. Use the Item 7 table in the current FDD as your starting point and adjust it for your market. Item 7 typically breaks costs into these categories:
- Initial franchise fee
- Leasehold improvements and construction
- Kitchen equipment, furniture and fixtures
- Signage and décor
- Point-of-sale and technology
- Opening inventory and supplies
- Training expenses and travel
- Deposits, licenses and permits
- Insurance and professional fees
- Grand opening marketing
- Additional funds for the initial operating period
Ongoing Fees and How They Affect Your Loan
Item 6 of the FDD lists the royalty, any advertising or brand fund contribution, technology fees, transfer fees and renewal fees. Because royalties and marketing contributions are typically based on gross sales, they come off the top before rent, labor, food cost and loan payments.
Lenders model these fees in your projections and test whether the restaurant can still cover a Rascal House franchise loan payment if sales come in lower than planned. Delivery commissions or driver costs also cut margin per order, so show sales and costs by channel. Ask, too, about any remodel obligations in the franchise agreement.
Franchisor Requirements for New Owners
We could not verify Rascal House’s minimum net worth, liquid capital or experience requirements from the franchisor’s own materials. Ask the franchise development team for the current qualifications and confirm them in the FDD.
Expect the franchisor to look at your restaurant background, financial capacity and site plans. Approval typically includes an application, FDD review, discovery meetings and a signed franchise agreement. Lenders generally want franchisor approval in hand, or close to it, before they finalize a Rascal House franchise loan.
Ways to Own a Rascal House
A new restaurant. A new unit requires a lease, a build-out and a full equipment package. Lenders underwrite it on projections, the site and your experience. See our restaurant start-up financing options.
Buying an existing restaurant. If a franchised location comes up for sale, you can underwrite actual sales and expenses. The transfer needs franchisor approval, and lenders will want the restaurant’s tax returns and profit and loss statements. Our guide to buying a franchise resale covers transfer timing and documents.
Multiple restaurants. An operator who wants to cover a larger area may be able to sign for more than one location. Check the FDD for development terms and territory rules.
Converting an existing pizza shop. If you own an independent pizzeria, ask whether the franchisor allows conversions, which can reduce build-out costs.
Financing Options for a Rascal House Franchise
SBA 7(a) loans. Because Rascal House is listed on the SBA Franchise Directory, the SBA 7(a) loan program is a practical route for a new restaurant or a resale. A 7(a) loan can cover leasehold improvements, equipment, the franchise fee, working capital and, in an acquisition, goodwill.
SBA 504 loans. If you buy the building or land for your restaurant, an SBA 504 real estate loan can finance owner-occupied property and long-lived equipment. This fits a freestanding site or a small mixed-use building where you occupy the restaurant space.
Conventional term loans. Borrowers with strong liquidity and restaurant experience may qualify for a conventional business loan, which often asks for more collateral or a larger down payment.
Equipment financing. Pizza ovens, mixers, refrigeration and the shake machine can be financed separately, which can preserve cash for the build-out. Learn more about restaurant equipment financing and leasing.
Working capital and lines of credit. Pizza sales near campuses can swing with the academic calendar, and catering orders can be lumpy. A line of credit helps smooth payroll, food purchases and rent through slower weeks. See our restaurant working capital solutions.
Seller financing on resales. A selling franchisee may agree to carry part of the price. Any seller note is typically subordinate to the senior loan, and SBA rules may limit how it is structured, so confirm the terms with your lender early.
SBA Loans for Rascal House Franchisees
The SBA Franchise Directory lists brands whose franchise documents have been reviewed for SBA eligibility. SBA lenders generally require a brand to be listed before they make an SBA-guaranteed loan to one of its franchisees. A listing does not approve any borrower; it clears the franchise relationship for review.
Rascal House is listed under code S1381 with one note: when the real estate where the franchise business is located will secure the SBA-guaranteed loan, the Conditional Assignment of Lease and Consent and Agreement of Landlord may not be executed. In plain English, those franchisor lease documents are written for a restaurant in leased space. If you own the property and pledge it as collateral, those documents should not be signed, and your lender will document the real estate differently.
The note does not block a Rascal House franchise loan; it tells the lender which franchise documents apply to an owned site. The SBA 7(a) program maximum is currently $5 million, though program rules can change. Our SBA loan calculator can help with early payment estimates, which are for planning only and are not an offer or approval.
Application tips. Bring the FDD, a lease or letter of intent, contractor bids, equipment quotes, monthly projections, a personal financial statement, tax returns and a resume.
How Lenders Evaluate a Rascal House Deal
Personal credit and financial history. Lenders review your credit, tax returns and personal financial statement and typically require a personal guarantee.
Net worth and liquidity. Lenders want your down payment plus reserves after closing.
Industry and management experience. Prior pizza or restaurant management experience carries real weight with a small franchise system. If you lack it, plan to hire an experienced general manager.
Business plan and projections. Build projections around your trade area: nearby campuses, offices and neighborhoods, delivery radius, lunch and late-night demand, catering targets and competition from other pizza shops. Show the ramp-up period month by month.
The FDD and franchise agreement. Lenders review the term, renewal rights, transfer conditions, territory and any franchisor financing in Item 10. Our article on how lenders read a Franchise Disclosure Document explains which items matter most. Review Items 3 and 4 as well, and check whether Item 19 includes financial performance representations.
Site and lease. Lenders want a lease term, with renewals, that at least matches the loan term.
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 Delivery Equipment
A Rascal House kitchen combines a pizza line with a grill and fryer station, which makes it more equipment-intensive than a pizza-only shop. That equipment is both a cost and collateral. Lenders often finance it as part of an SBA 7(a) loan or through a separate equipment loan or lease. Ask the franchisor which items must come from approved suppliers, since that affects quotes and lead times.
Multi-Unit Growth and Development Agreements
Once your first restaurant has a track record, lenders can underwrite the existing restaurant’s cash flow alongside the new one. A development agreement may require opening restaurants on a schedule, so match each opening to a funding plan rather than borrowing for all locations at once. Read our article on financing multiple franchise units for how lenders view growth.
Real-World Scenarios
A restaurant manager opening near a campus. An experienced pizza manager signs for a site near a college. The lender weighs the academic calendar’s effect on sales and the borrower’s record, and structures an SBA 7(a) loan with a working capital reserve.
An independent pizzeria owner converting. A pizzeria owner with an existing kitchen converts to Rascal House, if the franchisor allows it. Financing covers signage, menu equipment like a shake machine and a grill line, and remodeling.
A buyer purchasing an existing restaurant. A first-time owner buys a franchised Rascal House from a retiring operator. The lender underwrites historical sales, and the seller carries a small subordinate note.
Common Mistakes to Avoid
- Borrowing against a budget that was not built from the current FDD and local bids
- Underestimating hood, gas and electrical work in older buildings
- Ignoring delivery costs and seasonality when projecting sales
- Signing a lease shorter than the loan term
- Leaving too little working capital for the ramp-up period
- Skipping franchisor approval or landlord consent before closing
For more pitfalls that apply across the industry, read the restaurant loan mistakes owners make most.
Next Steps to Finance Your Rascal House Franchise
Step 1: Request and review the FDD. Read Items 5, 6, 7, 10, 17 and 19 with a franchise attorney and accountant.
Step 2: Confirm franchisor requirements. Ask the franchise team for current net worth, liquidity and experience requirements.
Step 3: Choose a site. Evaluate trade areas, delivery radius and lease terms.
Step 4: Build your budget and projections. Use the Item 7 table, contractor bids and equipment quotes to create monthly projections.
Step 5: Talk with a financing specialist. Compare SBA 7(a), 504 and conventional options before you sign a lease.
Step 6: Apply and close. Submit the loan package and coordinate franchisor approval and construction draws.
Rascal House Franchise Loan FAQs
How much does it cost to open a Rascal House?
We could not verify the current total investment from the FDD or the franchisor’s own materials. Item 7 of the current FDD gives the estimated range, and your site and build-out will determine where you land in it.
What is the Rascal House franchise fee?
Item 5 of the FDD lists the initial franchise fee and any fee for additional restaurants. Confirm it in the current document.
What royalty does Rascal House charge?
Item 6 lists the royalty, marketing contributions and other ongoing fees. Build them into your projections before you borrow.
Is Rascal House eligible for an SBA loan?
Yes. Rascal House is listed on the SBA Franchise Directory under code S1381, which means SBA lenders can consider loans to its franchisees, subject to normal underwriting.
What does the SBA directory note mean?
If real estate where the restaurant is located secures the SBA loan, the franchisor’s Conditional Assignment of Lease and Consent and Agreement of Landlord may not be signed. Those documents are meant for leased sites.
Can a first-time owner get a Rascal House franchise loan?
Yes, if the franchisor approves you and you meet lender requirements. Restaurant management experience or an experienced manager on staff strengthens a first-time request.
Does Rascal House offer financing?
Check Item 10 of the current FDD, which discloses any financing the franchisor offers. Most buyers arrange their own loans.
How long is the franchise term?
Item 17 and the franchise agreement state the initial term and renewal rights. Lenders compare the term with the loan length.
Does the FDD include financial performance information?
Review Item 19 of the current FDD to see whether it includes financial performance representations, and rely on actual financial statements when buying an existing restaurant.
Final Thoughts
A successful Rascal House franchise loan comes down to a well-supported budget, a strong site and a clear operating plan. Buyers who build costs from the current FDD, plan for delivery and catering channels and keep healthy reserves give themselves the best chance at a smooth opening.
US Professional Funding helps franchise owners and buyers finance start-ups, acquisitions, equipment and working capital. Learn more about our franchise financing programs and restaurant business financing.
