QSR and Drive-Through Restaurant Feasibility Study for SBA 504, SBA 7(a) and Bank Loans

A free-standing quick-service restaurant with a drive-through is the restaurant format lenders finance most often and the one whose building raises the first underwriting question. MMCG Invest prepares QSR and drive-through feasibility studies for SBA 504, SBA 7(a) and conventional financing that settle the limited-purpose classification and the 504 contribution tier at scoping, build the sales projection from the corridor traffic count and the brand's Item 19 distribution rather than its average, test the site against the stacking code and the observed queue, and report the debt service coverage ratio (DSCR) at the system median, the state average and the bottom decile so the lender sees how much sales miss the structure can absorb.

A drive-through QSR is a traffic business in a single-purpose building. Sixty-five percent of fast-food sales ran through the lane in 2025, down from a pandemic peak of 83 percent but still two-thirds of the revenue, and the building that serves it is shrinking while the lot is not: Taco Bell's Go Mobile prototype is 1,325 square feet against a traditional 2,500, 7 Brew's stand is about 510 square feet with two lanes, Scooter's kiosks are 650 to 700, and each still needs stacking, a bypass lane and often a mobile-pickup lane on a parcel of 0.35 to 1.9 acres. The lender's collateral is therefore mostly land, site work and a building designed around a lane. Culver's 2026 Item 7 puts land at $225,000 to $2,400,000, site work at $356,000 to $2,193,000 and the building at $2,047,000 to $4,391,000, against furniture, fixtures and equipment of $458,000 to $584,000. The study is written around those three facts: the lane, the building and the corridor.

The general approach to restaurant lending, the SOP 50 10 8.1 spine and the market backdrop are set out on the restaurant feasibility study hub. This page covers what changes when the subject is a drive-through.

A restaurant is not on SBA's list of special-purpose property examples, which names hotels, car washes, gas stations, bowling alleys, golf courses, funeral homes, cold storage, nursing homes, marinas, theaters and wineries. One CDC publishes that restaurants are classified as multipurpose. But 13 CFR 120.910 ties the 15 percent contribution tier to a "limited or single purpose building or structure" without defining the term, and the franchisor's own disclosure document can answer the question for the CDC: Culver's 2026 FDD describes its company restaurants as "single-purpose, one story, and freestanding." A CDC reading that language may classify the building as limited purpose. The consequence is arithmetic. An established operator building a multipurpose restaurant contributes 10 percent. A business that has operated two years or less, or a limited-purpose building, contributes 15 percent. A first-unit franchisee building a single-purpose drive-through contributes 20 percent, and the CDC debenture falls from 40 to 30 percent of project cost. On a $5 million project that is $500,000 more equity than the sponsor may have planned, and the franchisor's own liquidity requirement, 20 percent of the projected investment in cash or liquid assets at Culver's, means the lower SBA tier does not reduce the cash the sponsor needs at closing.

MMCG settles the classification at scoping, in writing, with the CDC. Where the CDC has not ruled, the study reports DSCR at both 15 and 20 percent and says so. The rules themselves are on the SBA 504 feasibility study page.

The generator for a drive-through is the road. The Institute of Transportation Engineers assigns a fast-food restaurant with drive-through 467 daily trips per 1,000 square feet in its 11th edition, with 49 percent of them pass-by, meaning already on the corridor; a coffee or donut shop with drive-through draws 534. A 4,310 square foot Culver's Metro L building at the ITE PM peak-hour rate of about 33 trips per 1,000 square feet generates about 142 peak-hour trips before pass-by credit, which is why impact fees on drive-throughs run high relative to building size: Bothell, Washington charges $91,954 per 1,000 square feet for the coffee drive-through land use, so a 510 square foot kiosk owes about $46,900.

The study names the state DOT count station, reports the annual average daily traffic and its direction split, and states which side of the road carries the peak flow at the subject's daypart. A burger concept on the home-bound side of an arterial and a coffee concept on the work-bound side are different sites at the same address. Access is reported as the permit will see it: full movement or right-in right-out, the distance to the nearest signal, median breaks, and whether the state DOT or the city controls the curb cut. The site plan is tested for the bypass lane, the escape lane and the pickup lane the brand's prototype requires.

Most municipal codes require four to six queued vehicles per lane. Lynnwood, Washington requires four per lane plus the window space; Olathe, Kansas requires 80 feet to the menu board and 160 feet from lane entrance to service; Tyler, Texas requires four inbound and one outbound per service position; Berwyn, Illinois four per lane; Midlothian six per facility. Those minimums are below what high-volume drive-throughs produce. Saint Paul measured maximum queues of 16 at coffee shops and 13 at fast-food restaurants and adopted a 14-space coffee standard and 12-space restaurant standard on March 4, 2026. One 7 Brew site in Warrenville, Illinois was required by its traffic study to provide 37 spaces, and another in Huber Heights, Ohio planned 14 against a code requirement of five.

The study models the queue from the peak-hour trip count and the brand's service time, not from the code minimum. The 2026 drive-through report timed AI-assisted lanes at 5 minutes 16 seconds against 5 minutes 25 seconds without, with 92 percent order accuracy when the order is repeated back and 76 percent when it is not. A lane that spills into the public right of way is a permit condition the city will enforce and a sales cap the lender should know about.

A franchisor's Item 19 average is not a site projection, and the study starts from the distribution. Culver's 2026 FDD reports 988 franchised restaurants open the full year with an average of $4,142,737, a median of $4,036,492, a high of $9,030,702 and a low of $1,103,114; 99 units were below $3.0 million. The state tables matter more than the system figure for a first unit: Wisconsin averages $4,517,210, Florida $4,287,146, Ohio $4,349,806, Georgia $3,569,622, Texas $3,480,360 and Utah $2,991,077. Units within half a mile of an interstate ramp averaged $3,691,600 by QSR Magazine's reading of the FDD. Culver's excludes the 45 franchised units opened in 2025 from Item 19, so no first-year ramp can be sourced from the document, and the study labels the ramp as an assumption with a sensitivity grid.

Other brands give the lender a different starting point. Wendy's 2026 FDD reports an average of $1,993,657 and a median of $1,866,652. Dunkin' reports $1,372,069 across 7,010 franchised restaurants, with freestanding pads at $1,584,319 and in-line units at $1,250,245. Zaxby's reports $2,847,345 across 809 units. Taco Bell makes no Item 19 by the aggregators' reading, and the study says so where that is the brand. Raising Cane's is not selling new franchises and Chick-fil-A owns its restaurants, so neither is an SBA borrower, though both are competitors in the trade area.

The projection is then reconciled to the trade area. The study reports the daytime and residential population within the drive time the concept's check supports, the corridor count, the competitive census by segment, and the resulting capture, and it states DSCR at the Item 19 median, the state average and the $3.0 million line.

Culver's company restaurants ran food at 30.5 percent, paper at 3.0 percent, wages at 31.7 percent and benefits at 5.9 percent of sales in 2025, a prime cost of 71.0 percent, with royalty at 4 percent and advertising at 2.5 percent, and reported income of 13.0 percent before rent, real estate taxes, interest and depreciation. The seven stores ran from 8.7 percent at $2.91 million of sales to 15.9 percent at $5.15 million, about three points of margin per million dollars of sales. That operating leverage is the central sensitivity in a drive-through study, and the lender reads it before anything else. Franchisee margins run below company margins: Culver's warns that office personnel are excluded from its company cost lines, and the study applies a two-point haircut for unabsorbed overhead in the downside case.

The public record gives the direction of travel. Wendy's U.S. company restaurant margin fell to 11.4 percent in the first quarter of 2026 from 14.8 percent, Jack in the Box guided fiscal 2026 to 17 to 18 percent from 19.6 percent, and Burger King's average unit profitability fell to about $185,000 in 2025 from $205,000 on beef costs up more than 20 percent. Meritage Hospitality, the 314-unit Wendy's operator that filed Chapter 11 on September 17, 2026, reported food, paper and labor at 66.1 percent of sales and store-level EBITDA down 48 percent. Beef is forecast up 9.4 percent for 2026 and 5.1 percent for 2027 by USDA, so a burger concept's food line is stressed three points in every MMCG study.

Project cost is tested against the brand's Item 7 line by line. Culver's 2026 range is $3,406,350 to $10,294,100 and its low end rose about 29 percent between the 2025 and 2026 documents, the clearest public evidence of QSR construction inflation. Lower-cost drive-through formats run $1.5 million to $2.8 million for a Freddy's standalone and $1.46 million to $3.81 million for Zaxby's, and they produce one-half to two-thirds of the Culver's volume, so sales-to-investment is the comparison the study shows rather than absolute cost.

The stack is then built both ways. On a $5 million owned-land project at October 2026 rates, the Culver's company-store income of 13.0 percent at the system median is about $524,700 before property taxes, technology subscriptions, insurance and office overhead, and about $376,000 to $380,000 after them. A $4.5 million 7(a) loan at the 10.00 percent cap over 25 years costs about $487,700 a year and covers 0.78 times. A 504 at 20 percent contribution, with a $2.4 million first mortgage at an assumed 8.0 percent and a $1.44 million debenture at the October 2026 effective rate of 6.97 percent, costs about $344,000 and covers 1.09 times at stabilization; the smaller prototype at 25 percent contribution costs about $297,900 and covers 1.28 times at the median and 1.50 times at the Florida state average. The 504 is the program for this format, and the study says what the sponsor must bring at each tier.

The study reports DSCR by year against 1.15 times on historical EBITDA for the 504 and the lender's covenant on the first mortgage, with the year the floor is first met and the reserve or interest-only period that carries the project there. Sales are tested at 10, 20 and 30 percent below base; on the Culver's-class 504 case as restructured, a 3.7 percent sales miss breaches 1.15 times and an 8.2 percent miss breaches 1.00 times. Food and paper are tested three points up, wages 10 percent up, rates 100 basis points up. A three-month 50 percent revenue shock is tested against the Item 7 working capital line, which at Culver's is $65,000 to $120,000 and excludes hourly labor, food and rent.

The net lease market prices a franchisee-guaranteed QSR building at a 6.87 percent cap rate in the third quarter of 2026 against 5.90 percent for a corporate guarantee, and at 6.00 against 5.00 percent with twenty or more years of lease remaining. A first-unit franchisee on its own land has no lease to sell, so the study capitalizes a market rent of 6 to 7 percent of sales to reach a leased-fee cross-check; on a $5 million project a sale-leaseback at 6.87 percent needs about $288,500 of rent, 7.0 percent of system-average sales. The dark value is reported separately, because conversion and de-branding costs appear as functional obsolescence once a branded building goes dark and the Appraisal Institute's restaurant guidance treats highest and best use as the central question. Appraisal treatment is covered on the SBA feasibility study page and in When the Appraisal Isn't Enough.

A MMCG drive-through study includes the corridor and access analysis with the DOT count station named, the stacking model against the adopted code, the trade area and competitive census with the permitted pipeline, the Item 19 reconciliation at median, state and bottom decile, the Item 7 cost test, the capital stack at each 504 tier, the DSCR schedule, break-even and sensitivities, the collateral cross-check and a signed conclusion. Standard delivery is nine to sixteen business days; expedited delivery in five to seven is available. Fees begin at $4,900 for a single-site 7(a) study and run $7,500 to $12,500 for a 504 study with the CDC classification and both contribution tiers. Revisions required by the lender or CDC are made at no additional cost under MMCG's written acceptance guarantee. The method is set out in MMCG's feasibility study methodology, and the same study is prepared to the lender requirements of the state the project sits in; see where we work.

Franchise drive-through on owned land, SBA 504: a $5.1 million Culver's-class first unit in Polk County, Florida, not feasible as proposed at 20 percent contribution (1.09 times at stabilization), feasible as restructured on the Metro M prototype at 25 percent contribution, 1.28 times at the system median and 1.50 times at the Florida state average. The companion pages are the restaurant franchise feasibility study and the coffee shop feasibility study.