Buying a Zaxby's franchise: SBA acquisition loan data
Since FY2018, SBA lenders have approved 14 7(a) loans to buy an existing Zaxby's (classified mostly as Limited-Service Restaurants), totaling $23.6M. The median loan was $1,477,700, 129% higher than the $645,250 median for all SBA-financed acquisitions. 5 of these loans were approved in the last two fiscal years.
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What this tells a buyer
- Price range to expect. Loan size tracks purchase price. Half of Zaxby's resale loans landed between $915,375 and $1,828,750.
- Lender experience exists. Live Oak Banking Company alone has financed 4 Zaxby's resales.
- Guaranty. The SBA guaranteed 75% of the dollars lent here.
- What the file leaves out. The SBA file does not record franchisor transfer terms or fees.
Financing a Zaxby's resale
The median SBA 7(a) loan for a Zaxby's resale was $1,477,700 across 14 loans (FY2018 to FY2026). Live Oak Banking Company, Banc of California and Pinnacle Bank have financed the most Zaxby's resales. Too few of these loans are old enough to measure a charge-off rate; the average for all SBA acquisition loans is 3.5%.
Zaxby's acquisition loans by year
| Fiscal year | Loans | Total approved | Median loan | |
|---|---|---|---|---|
| FY2018 | 0 | $0 | - | |
| FY2019 | 1 | $566K | $566,000 | |
| FY2020 | 2 | $2.7M | $1,326,750 | |
| FY2021 | 2 | $5M | $2,500,000 | |
| FY2022 | 2 | $6.5M | $3,240,700 | |
| FY2023 | 2 | $1.5M | $736,850 | |
| FY2024 | 0 | $0 | - | |
| FY2025 | 3 | $5.4M | $1,482,000 | |
| FY2026 | 2 | $2.1M | $1,032,500 |
How often do these acquisition loans fail?
Fewer than 20 Zaxby's acquisition loans are old enough to measure losses reliably, so no charge-off rate is shown. The benchmark across all SBA acquisition loans in the FY2018 to FY2021 cohort is 3.5% by count. Non-acquisition 7(a) loans (every other stated purpose) approved FY2018 to FY2021 charged off at 6.2%.
"Charged off" is the SBA's final loss action on a defaulted loan after collection efforts. It lags default by a year or more, which is why only older cohorts are measured. It is not the same as a delinquency rate, and loans still outstanding can still fail. See charge-off in the glossary.
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Lenders financing Zaxby's resales
| # | Lender | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Live Oak Banking Company | 4 | 28.6% | $9.4M | |
| 2 | Banc of California | 4 | 28.6% | $7.3M | |
| 3 | Pinnacle Bank | 2 | 14.3% | $1.7M | |
| 4 | First Western SBLC, LLC d/b/a Peachtree Group | 1 | 7.1% | $1.9M | |
| 5 | Colony Bank | 1 | 7.1% | $1.5M | |
| 6 | Seacoast National Bank | 1 | 7.1% | $1.2M | |
| 7 | Merchants Bank of Indiana | 1 | 7.1% | $643K |
States where Zaxby's units are bought
| # | State | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Georgia | 3 | 21.4% | $6.5M | |
| 2 | Alabama | 3 | 21.4% | $4.4M | |
| 3 | Tennessee | 3 | 21.4% | $3.5M | |
| 4 | North Carolina | 2 | 14.3% | $5.6M | |
| 5 | Texas | 1 | 7.1% | $1.9M | |
| 6 | Mississippi | 1 | 7.1% | $1.2M | |
| 7 | Missouri | 1 | 7.1% | $643K |
Seller note standby terms and third-party consents are reviewed before closing.
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How lenders classify Zaxby's
Lenders code each loan to a NAICS industry. For Zaxby's the codes used were:
| # | Industry | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Limited-Service Restaurants | 12 | 85.7% | $22.4M | |
| 2 | Full-Service Restaurants | 2 | 14.3% | $1.2M |
Questions buyers ask
How much do buyers borrow to buy a Zaxby's franchise?
The median SBA 7(a) loan for a Zaxby's resale was $1,477,700 across 14 loans (FY2018 to FY2026). The middle half of loans ran from $915,375 to $1,828,750. The loan excludes the buyer's equity and any seller note and may include working capital, so the price is usually higher than the loan.
Which banks finance Zaxby's acquisitions?
Live Oak Banking Company has made the most SBA acquisition loans for Zaxby's (4, 29% of the total). Banc of California, Pinnacle Bank, First Western SBLC, LLC d/b/a Peachtree Group follow.
What interest rate and term do Zaxby's acquisition loans carry?
The average initial rate at approval was 7.20% (a blend of fixed and variable loans across several rate environments, so treat it as context, not a quote). The median term was 10 years.
Is a Zaxby's resale riskier than other SBA-financed acquisitions?
Too few Zaxby's acquisition loans are old enough to measure. The benchmark for all SBA acquisition loans is 3.5% charged off in the FY2018 to FY2021 cohort.
Where are Zaxby's units being bought with SBA loans?
Georgia (3), Alabama (3), Tennessee (3), North Carolina (2), Texas (1). State counts follow where the brand has units and where SBA lending is most active generally; see the state pages for the overall picture.
Terms signed in the LOI shape the purchase agreement that follows.
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Related
- All Limited-Service Restaurants acquisitions
- Georgia acquisitions
- Alabama acquisitions
- Tennessee acquisitions
- Live Oak Banking Company
- Banc of California
- Pinnacle Bank
- All franchise brands
Brand name as recorded by lenders in the SBA file: "Zaxby's" (franchise code S1986). Figures are aggregates of public SBA data and are not provided or endorsed by the franchisor.