How to Finance a Shoney’s Franchise: Costs and Site Needs
By Marc Cornella
A Shoney’s franchise loan is usually a full-service restaurant loan in every sense: buyers are financing a sit-down family dining concept with a fresh food bar, a kitchen built for three dayparts and, for many formats, a free-standing building on a large parcel. The brand publishes clear capital thresholds for new owners, but much of the detail lenders need lives in the Franchise Disclosure Document (FDD), which Shoney’s provides only after a first conversation with its franchise sales team.
Below we cover Shoney’s published fees and owner requirements, how its formats and site criteria shape a loan, why its absence from the SBA Franchise Directory points buyers toward conventional financing, and how new builds, conversions and resales are financed.
US Professional Funding is not affiliated with, sponsored by or endorsed by Shoney’s; the name is used only to describe the business. Figures from the franchisor’s website and 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, and buyers should review the current FDD and franchise agreement with a qualified franchise attorney and accountant.
Shoney’s Franchise Loan at a Glance
- Initial franchise fee: $35,000, according to Shoney’s domestic franchise information page.
- Liquidity requirement: $500,000 in liquid assets.
- Net worth requirement: $1.5 million.
- Formats: “Shoney’s on the go” at 1,400 to 2,800 square feet; stand-alone and nontraditional end-cap prototypes at 4,000 to 6,000 square feet; end-cap sites of about 3,800 square feet.
- Site criteria: a recommended site of at least 1.2 acres, parking for 40 to 85 or more cars depending on format, two entrances that can handle 18-wheeler food deliveries, a garbage disposal area and zoning that allows alcohol sales.
- Royalty, marketing fees and total investment: not published on the franchise pages; they appear in the FDD, which Shoney’s shares after the first meeting or call with a sales director.
- SBA Franchise Directory: Shoney’s is not listed, so conventional financing is the primary route for most buyers.
What Is Shoney’s?
Shoney’s is an all-American family dining brand serving breakfast, burgers, sandwiches, entrées and desserts. The company says it has been operating for more than 75 years and describes itself as one of the oldest private restaurant brands in the world. Its signature feature is the all-you-care-to-eat fresh food bar, paired with a menu the brand calls “Southern Food with a Twist” across breakfast, lunch and dinner.
The brand has refreshed its menu, buffet and décor, and some locations now serve beer, wine and mixed drinks. Shoney’s offers single restaurants and territories for new construction or conversions of existing real estate, with flexibility to add a drive-thru or liquor bar and adjust size and hours.
Restaurant formats. Shoney’s describes three main footprints. “Shoney’s on the go” is a smaller format of 1,400 to 2,800 square feet. The stand-alone and nontraditional end-cap prototypes run 4,000 to 6,000 square feet, and end-cap sites generally need about 3,800 square feet. Parking requirements scale with the format: at least 40 spaces for the on-the-go model, 60 for a small stand-alone and 85 or more for a large stand-alone.
Why lenders view Shoney’s the way they do. Lenders generally see a long-established name and a full-service model with higher labor, food and occupancy costs than counter-service concepts, plus buffet food cost and waste to manage. Because total investment and royalty figures are not published on the franchise pages, lenders lean heavily on the FDD and a site-specific budget.
Shoney’s Franchise Costs
Initial franchise fee. Shoney’s domestic franchise information page lists a franchise fee of $35,000. For multi-unit commitments, the company’s development process includes a development agreement with a development fee; the amount is set out in the franchise documents rather than on the website.
Real estate and building. This is the largest variable in any Shoney’s budget. A large stand-alone on 1.2 acres or more is a very different project from a shopping-center end-cap or a compact on-the-go unit, and buyers who purchase land and build need far more capital than buyers who lease.
Build-out and conversion. Conversions of existing real estate can reduce construction cost, but still involve kitchen work, a food bar installation, décor, signage and code upgrades, and lenders will want a contractor’s bid.
Equipment and furnishings. Expect cooking lines, refrigeration, hot and cold buffet holding, dish machines, ventilation and fire suppression, dining room furniture, point-of-sale technology and, where added, drive-thru and bar equipment.
Opening costs and working capital. Opening inventory, pre-opening payroll and training, licenses (including any liquor license), insurance, deposits and a cash reserve for the first months of operation are all part of a realistic budget.
Total investment. Shoney’s does not publish a total investment range on its franchise pages. Item 7 of the FDD will present the estimated initial investment and its line items, typically including:
- Initial franchise fee ($35,000)
- Real estate, rent or land acquisition
- Construction, leasehold improvements or conversion work
- Kitchen, buffet and dining room equipment, furniture and fixtures
- Signage and décor
- Opening inventory and supplies
- Training, travel and pre-opening expenses
- Licenses, permits, insurance and deposits
- Additional funds for the initial operating period
Read the full Item 7 table in the current FDD, and build a site-specific budget around your actual format, land or lease terms and construction bids.
Ongoing Fees and How They Affect Your Loan
Royalty and marketing contributions. Shoney’s does not list its royalty or advertising contributions on its franchise pages. They will appear in Item 6 of the FDD, along with any technology, training, transfer and renewal fees. Ask for each one and how it is calculated before you build projections.
Occupancy. Rent or mortgage payments on a large free-standing restaurant can be substantial, and either one reduces the cash available for other loan payments.
How lenders factor these costs in. Lenders subtract food, labor, occupancy, royalty and marketing from projected sales and check that what remains covers debt service with a cushion, then stress-test the result.
Franchisor Requirements for New Owners
Shoney’s publishes its financial thresholds for domestic franchisees:
- Liquidity: $500,000 in liquid assets.
- Net worth: $1.5 million.
- Site control or a suitable site: a location that fits one of the brand’s formats and site criteria, including zoning that allows alcohol sales.
For its broader development program, Shoney’s says it looks for solid business experience, multi-unit management, proven retail expertise (with food and beverage preferred) and, as an advantage, prior franchise experience.
The approval process. Shoney’s describes a process that runs from a request for consideration form to a business plan, the FDD, a letter of intent, a development agreement with a development fee, approval by its franchise committee and, finally, franchise agreements with a franchise fee. A signed franchise agreement and an approved site make a loan request much stronger.
Ways to Own a Shoney’s
A new restaurant. Building a new Shoney’s means financing land or a ground lease, construction, equipment and opening costs. Lenders underwrite these deals on projections, the borrower’s restaurant experience and the strength of the site. Our page on franchise start-up financing explains how we approach new units.
Converting existing real estate. Shoney’s explicitly offers conversions of existing real estate. An owner who already controls a former restaurant building may be able to reduce construction cost, though conversion work, equipment and the fresh food bar still require capital. Our article on financing a franchise conversion covers how lenders look at these projects.
Buying an existing restaurant. Buying an operating Shoney’s from a franchisee, subject to Shoney’s transfer approval, lets lenders underwrite actual sales and expenses. See our guide to buying a franchise resale for transfer approval and due diligence.
Financing Options for a Shoney’s Franchise
Conventional term loans. Because Shoney’s is not on the SBA Franchise Directory, a conventional business loan is the primary tool for most Shoney’s franchise loan requests. Lenders that finance full-service restaurants generally size a term loan to projected or historical cash flow, secure it with business assets and personal guarantees, and expect the owner’s own equity in the deal. Terms and structures vary by lender and borrower, and every request is subject to underwriting.
Real estate loans. Where the owner buys land or a building, a commercial mortgage can finance the property separately from the business. Our article on franchise real estate financing explains the trade-offs between owning and leasing a franchise site.
SBA 7(a) and 504 loans. The SBA 7(a) program and the SBA 504 program are widely used for restaurant purchases and owner-occupied real estate. For a brand that is not on the SBA Franchise Directory, though, they are generally not the practical route. See the SBA section below.
Equipment financing. Kitchen lines, refrigeration, buffet holding equipment, dish machines, ventilation hoods, point-of-sale systems and drive-thru technology can often be financed separately, which can preserve cash for opening costs. Learn more about restaurant equipment financing and leasing.
Working capital and lines of credit. Family restaurants carry weekly food purchases, a large hourly payroll and, for new units, a ramp-up period before sales stabilize. A line of credit or working capital loan can cover pre-opening payroll, opening inventory and seasonal swings. See our restaurant working capital options.
Seller financing on resales. When buying an existing Shoney’s, part of the price may be carried by the seller. Any seller note would need to be acceptable to the senior lender and is typically subordinate to it.
SBA Loans for Shoney’s Franchisees
SBA lending for franchises runs through the SBA Franchise Directory, a list of brands whose franchise agreements have been reviewed for SBA eligibility. SBA lenders generally require a franchise brand to appear on the directory before they can make an SBA-guaranteed loan to one of its franchisees. A listing does not approve any borrower; it only clears the franchise relationship for SBA review.
Shoney’s is not on the SBA Franchise Directory. In plain terms, SBA 7(a) and 504 loans are generally not available for a Shoney’s franchise as things stand, and buyers should plan on conventional financing. The absence of a listing is not a judgment about the brand’s quality; it simply means the brand’s franchise documents have not been placed on the directory.
Directory status can change, so confirm it with your lender when you apply. If Shoney’s were added in the future, the SBA 7(a) program maximum is currently $5 million, though program rules can change.
How Lenders Evaluate a Shoney’s Deal
Personal credit and financial history. Lenders review credit, tax returns and a personal financial statement, and typically require personal guarantees.
Net worth and liquidity. Shoney’s thresholds set a floor; lenders also look at reserves left after the equity injection.
Restaurant and management experience. A borrower who has run full-service restaurants or supervised large hourly teams presents a stronger case.
Business plan and projections. Projections should reflect the format, hours, alcohol service or drive-thru, food bar costs, the Item 6 fees and a realistic ramp-up.
The FDD and franchise agreement. Lenders read Items 5, 6, 7, 10, 17 and 19 closely: initial and ongoing fees, the investment estimate, any franchisor financing, term and transfer conditions, and whether the FDD includes financial performance representations.
Site, lease or real estate. Lenders review the purchase contract or lease, delivery access, parking, zoning and the lease term relative to the loan term.
Historical financials for existing restaurants. For a resale, expect to provide several years of profit and loss statements, sales reports and tax returns.
Inside the Building: Equipment, Food Bar and Formats
The fresh food bar is the defining equipment consideration: hot and cold wells, sneeze guards, holding cabinets and the kitchen capacity to replenish them all day. A Shoney’s that adds a liquor bar needs bar equipment, coolers and licensing, while a drive-thru adds window, order-taking and payment technology.
Remodels and refreshes. Buyers of existing restaurants should ask whether the location meets current brand standards and budget any required updates into the purchase financing.
Multi-Unit Growth and Development Agreements
Shoney’s offers territories under development agreements with development fees. The schedule sets how many restaurants must open and by when, so financing must be planned for the whole schedule.
Financing a second or third restaurant. Once the first restaurant has history, lenders can underwrite its cash flow alongside projections for the next. Our article on multi-unit franchise financing explains how lenders view growing restaurant groups.
Keep the schedule realistic. Missing a development deadline can put territory rights at risk.
Real-World Scenarios
An experienced operator converting a closed restaurant. A multi-unit restaurant owner controls a former family dining building with ample parking, converts it to a Shoney’s with a conventional term loan and keeps a working capital line for opening payroll.
A first-time franchisee building an on-the-go unit. A buyer with food and beverage experience chooses the smaller format on a leased pad site; the lender focuses on experience, lease terms and a conservative ramp-up.
A buyer purchasing an existing Shoney’s. A buyer acquires an operating restaurant from a retiring franchisee. The lender sizes the loan from historical financials and asks for a plan for any décor or food bar updates.
A developer opening restaurants under a development agreement. An operator signs a development agreement; the first unit is financed with a conventional loan and mortgage, and later units follow as the first builds a track record.
Common Mistakes to Avoid
- Assuming SBA financing will be available for a brand that is not on the SBA Franchise Directory
- Building projections before reviewing the royalty and marketing contributions in Item 6
- Underestimating food cost, waste and labor for a fresh food bar
- Choosing a site without checking delivery access, parking and alcohol zoning
- Leaving too little working capital for pre-opening payroll and a slow ramp-up
- Signing a multi-unit development schedule without a financing plan for each unit
For more pitfalls in this industry, read the restaurant loan mistakes that cost owners the most.
Next Steps to Finance Your Shoney’s Franchise
Step 1: Confirm you meet Shoney’s thresholds. Document the required liquidity, net worth and management experience.
Step 2: Request the FDD. Talk with a Shoney’s sales director, receive the FDD and review Items 5, 6, 7, 10, 17 and 19 with a franchise attorney and accountant.
Step 3: Choose a format and identify a site. Match the format to your market and confirm parking, access and zoning.
Step 4: Build a budget and projections. Use the Item 7 estimate, contractor bids and lease or purchase terms to build a site-specific budget. Our conventional loan calculator can help with early payment estimates, which are for planning only and are not an offer or approval.
Step 5: Talk with a financing specialist early. Learn how conventional lenders will view your Shoney’s franchise loan and how to structure it.
Step 6: Apply and align approvals. Submit your loan request with financial statements, tax returns, projections and franchise documents, and keep the loan timeline aligned with Shoney’s franchise committee approval and your development schedule.
Step 7: Close and prepare to open. Finalize construction, equipment, hiring and training, and keep a cash reserve.
Shoney’s Franchise Loan FAQs
How much does it cost to open a Shoney’s franchise?
Shoney’s does not publish a total investment range on its franchise pages. The cost depends heavily on format, land or lease terms and whether the project is new construction or a conversion. Item 7 of the FDD provides the estimated initial investment.
What is the Shoney’s franchise fee?
Shoney’s domestic franchise information page lists a franchise fee of $35,000. Multi-unit development agreements also involve a development fee set out in the franchise documents.
How much liquid capital and net worth do I need?
Shoney’s lists $500,000 in liquidity and a $1.5 million net worth for domestic franchisees.
What royalty does Shoney’s charge?
The royalty and marketing contributions are not listed on the franchise pages. They appear in Item 6 of the FDD, which Shoney’s provides after an initial meeting or call with a sales director.
Can I get an SBA loan for a Shoney’s?
Shoney’s is not listed on the SBA Franchise Directory, and SBA lenders generally require a listing, so SBA financing is generally not the practical route. Most buyers use conventional financing. Confirm current directory status with your lender.
Can I convert an existing restaurant to a Shoney’s?
Yes. Shoney’s offers locations for new builds or conversions of existing real estate. Conversions can reduce construction cost, but still require equipment, a food bar, décor and brand-standard updates.
Can I buy an existing Shoney’s restaurant?
Yes, subject to Shoney’s approval of the transfer. Lenders can underwrite an existing restaurant’s actual financials, which often makes the loan easier to size than a new build.
Can a first-time franchisee get a Shoney’s franchise loan?
It is possible if Shoney’s approves the candidate and the borrower meets its liquidity and net worth thresholds. Lenders will weigh restaurant management experience heavily, so first-time franchisees with food and beverage backgrounds are better positioned.
Does Shoney’s offer financing?
Shoney’s franchise pages do not describe a franchisor financing program. Review Item 10 of the current FDD to see whether any financing is offered.
Does the FDD include financial performance information?
Check Item 19 of the current FDD to see whether Shoney’s includes financial performance representations. For an existing restaurant, rely on the restaurant’s actual financial statements.
Final Thoughts
Financing a Shoney’s comes down to three things: meeting the brand’s published liquidity and net worth thresholds, choosing a format and site that fit the market, and building a realistic budget from the FDD before approaching lenders. Because SBA programs are generally not available for this brand, buyers who prepare their Shoney’s franchise loan early for conventional underwriting give themselves the best chance at a smooth closing.
US Professional Funding helps franchise owners and buyers finance acquisitions, equipment, working capital and refinancing for established brands. Learn more about our franchise financing and restaurant financing solutions.
