Zaxby's franchise startup costs run $578K–$1.27M for a QSR chicken fingers and wings concept with 900+ locations across 18 states. Zaxby's Southeast dominance and casual dine-in format with drive-through give operators a dual-format positioning in the competitive chicken QSR segment.
Zaxbys franchise costs at a glance
Total investment
$578,000–$1.3M
Franchise fee
$35,000
Royalty
6%
Ad / marketing fee
1.5%
Liquid capital required
$150,000
Net worth required
$500,000
Source: Zaxbys Franchise Disclosure Document (FDD) · as of 2026-05-06. Figures vary by market and site; verify against the current FDD before signing.
Key takeaways
Total estimated startup cost: $578,000–$1,270,000 (QSR chicken fingers + wings)
Franchise fee: $35,000
Ongoing royalty: 6%; advertising fund: 1.5%
900+ locations in 18 states — Southeast dominant
Casual dine-in with drive-through; chicken fingers, wings, and Zax Sauce
Per the current FDD filed under the FTC Franchise Rule (16 CFR Part 436), total estimated initial investment for a Zaxby's franchise runs $578,000–$1,270,000. The dine-in component adds furniture and dining room build-out costs:
Franchise fee: $35,000
Land and building (owned) or leasehold improvements (leased): $250,000–$650,000
Kitchen and fry equipment: $130,000–$280,000
Drive-through equipment: $25,000–$60,000
Dining room furniture, fixtures, and signage: $50,000–$130,000
POS and technology: $20,000–$40,000
Initial inventory: $10,000–$20,000
Training and travel: $10,000–$25,000
Grand opening marketing: $10,000–$25,000
Working capital (3 months): $25,000–$60,000
Professional fees, permits, insurance: $15,000–$30,000
2 Ongoing fees
Zaxby's charges a 6% royalty on gross sales plus a 1.5% advertising fund contribution, for a combined 7.5% of gross sales. The 1.5% ad fund is below the QSR average, with the brand relying more heavily on local marketing and social channels to supplement system-wide advertising. Technology fees apply separately.
3 Financing Zaxby's
Zaxby's is listed in the SBA Franchise Directory effective October 9, 2026, under SBA franchise identifier code S1986 (code start date October 1, 2017).
SBA's directory entry for Zaxby's adds these notes for lenders:
When the real estate where the franchise is located will secure the SBA-guaranteed loan, the Lease Rider may not be executed.
The loan programs typically used for a Zaxby's franchise are covered in Financing options below.
4 Financing options
Zaxby's is listed on the SBA Franchise Directory, qualifying franchisees for expedited SBA loan processing. Financing paths:
SBA 7(a) loan: Covers franchise fee, leasehold improvements, kitchen equipment, and working capital. Leased locations in the $578K–$900K range fit comfortably within SBA 7(a) program parameters.
SBA 504 loan: For owned freestanding locations, SBA 504 pairs a bank loan (50%) with an SBA-backed debenture (40%) and franchisee equity (10%).
Equipment financing: Commercial fry equipment and kitchen systems can be financed separately over 5–7 years.
Conventional commercial real estate loan: Multi-unit operators with strong financial statements may combine conventional lending with SBA.
Working capital line of credit: Supports pre-opening labor and food cost during the first 60–90 days of operations.
5 Realistic ROI timeline
Zaxby's QSR formats with dine-in and drive-through typically target break-even within 24–48 months. The brand's strong loyalty among Southeast consumers drives repeat visit frequency. Chicken fingers and wings have a broad demographic appeal and strong weekday lunch and family dinner traffic. Operators entering markets with existing Zaxby's brand awareness ramp faster than greenfield expansions.
6 Who's a good fit
Zaxby's suits experienced QSR operators with Southeast market knowledge. The dual-format dine-in and drive-through model requires managing both front-of-house dining room experience and drive-through speed-of-service simultaneously. Multi-unit QSR operators building a chicken-forward portfolio often combine Zaxby's with complementary breakfast and sandwich concepts. Net worth of $500K+ and liquid capital of $150K+ are typical financial benchmarks.
7 Apply for franchise financing
ClearValue Lending works with QSR chicken franchise operators on SBA, equipment, and working capital financing. Start at small business financing or apply for franchise financing at Find my match. Your file routes to the funding partners best matched to your file. See our SBA 7(a) application walkthrough to prepare your documents, and how much an SBA loan actually costs before you apply, or compare another chicken QSR franchise already covered — Popeyes franchise costs. The SBA Loans product overview covers program terms in more depth, and Wingstop is another chicken QSR franchise cost breakdown already on the site.
8 What lenders look for in a Zaxby's franchise application
Zaxby's is on the SBA Franchise Directory, enabling expedited SBA loan eligibility review. At $578K–$1.27M, this is a mid-to-large QSR deal — SBA 7(a) is the primary financing path for most Zaxby's builds. Key underwriting factors:
Debt service coverage ratio (DSCR): SBA SOP 50 10 8 sets the minimum DSCR at 1.15×; most SBA lenders require 1.25×–1.35× for QSR startups. Zaxby's 7.5% combined royalty/ad fee (6% royalty + 1.5% ad fund) is above the QSR median — lenders model DSCR from FDD Item 19 average annual revenue for comparable Zaxby's locations, adjusting for the fee load and full operating cost stack.
Equity injection: SBA requires a minimum 10% equity injection. At $578K–$1.27M, lenders typically require 20% for QSR chicken franchise builds — that's approximately $115K–$254K from the borrower's own verifiable funds, seasoned 60+ days in the account before closing.
Southeast market concentration risk: Zaxby's operates primarily in the Southeast US (18 states). Lenders in new expansion markets outside Zaxby's core territory may apply additional scrutiny to projected AUV assumptions — trade area analysis and comparable Southeast market performance data strengthen the pro forma.
Restaurant management experience: Prior QSR or full-service restaurant management experience is a positive underwriting signal. Zaxby's casual dine-in + drive-through format requires staffing management capabilities — lenders evaluate the borrower's prior food service track record as part of the overall credit assessment.
Drive-through or inline site quality: Zaxby's operates in both drive-through and inline formats. Lenders review lease terms (must cover the full loan term, typically 10+ years), site control, and site approval from Zaxby's corporate before issuing credit approval.
Sources
Zaxby's is listed on the SBA Franchise Directory, qualifying franchisees for expedited SBA loan eligibility. — SBA Franchise Directory
SBA 7(a) loans finance QSR franchise startups including leasehold improvements, kitchen equipment, and working capital. — SBA 7(a) Loan Program
All franchise cost and fee disclosures are governed by the FTC Franchise Rule requiring a Franchise Disclosure Document (FDD) be delivered at least 14 days before signing. — FTC Franchise Rule — 16 CFR Part 436
Qualifying restaurant equipment placed in service during the tax year may be immediately expensed under IRS Section 179. — IRS Publication 946
Frequently asked questions
How much does a Zaxby's franchise cost in 2026?
Per the current FDD, total estimated initial investment runs $578,000–$1,270,000. The $35,000 franchise fee, leasehold improvements or building, and kitchen/fry equipment are the primary cost drivers.
Who owns Zaxby's?
Zaxby's is majority-owned by Goldman Sachs Capital Partners, which acquired a majority stake in 2020. The founders, Zach McLeroy and Tony Townley, retain a minority ownership stake.
What is the Zaxby's royalty rate?
Zaxby's charges a 6% royalty on gross sales plus a 1.5% advertising fund contribution, for a combined 7.5% of gross sales.
Can I finance a Zaxby's franchise with an SBA loan?
Yes. Zaxby's is on the SBA Franchise Directory. SBA 7(a) covers leased locations at the lower investment range. SBA 504 is suited for owned freestanding locations. Kitchen equipment can be financed separately via equipment lending.
In which states does Zaxby's operate?
Zaxby's operates in 18 states with concentration in the Southeast — Georgia, Alabama, South Carolina, North Carolina, Tennessee, Florida, Mississippi, Louisiana, and Virginia. The brand is expanding into Midwest and Southwest markets.
What DSCR do lenders require for a Zaxby's franchise SBA loan?
SBA SOP 50 10 8.1 sets a minimum DSCR of 1.15× on business cash flow (1.0× on a global basis). Most SBA participating lenders require 1.25×–1.35× for QSR franchise startups. For Zaxby's, lenders model DSCR from FDD Item 19 average annual revenue for comparable Zaxby's locations, adjusting for the 7.5% combined royalty/ad fee (6% royalty + 1.5% ad fund), lease, labor, and food costs. The 6% royalty is above the chicken QSR median — lenders stress-test this against projected AUV to confirm DSCR coverage before approving. Source: SBA SOP 50 10 8 (https://legacy.sba.gov/document/sop-50-10-lender-development-company-loan-programs).
How much equity injection is required for a Zaxby's SBA loan?
SBA SOP 50 10 8 requires a minimum 10% equity injection from the borrower's non-borrowed funds. For Zaxby's $578K–$1.27M investment range, SBA lenders typically require 20% equity — approximately $115K–$254K from verified borrower funds. Equity sources accepted by SBA lenders include personal savings (seasoned 60+ days in the account), ROBS (401(k)/IRA rollover), and documented gifts. Source: SBA SOP 50 10 8 (https://legacy.sba.gov/document/sop-50-10-lender-development-company-loan-programs).
Summary:
Zaxby's franchise startup costs run $578K–$1.27M for a QSR chicken fingers and wings concept with 900+ locations across 18 states. Zaxby's Southeast dominance and casual dine-in format with drive-through give operators a dual-format positioning in the competitive chicken QSR segment.
This article is for educational purposes and is not financial, legal, or tax advice. Rates,
fees, qualification requirements, and product availability are illustrative ranges that vary
by lender, market conditions, and individual business profile. ClearValue Lending is a
funding platform; all financing is subject to lender partner approval and terms. Always read
your contract end-to-end and verify specific numbers before signing.
