The Sandwich Chain That Almost Went Under In The ’70s, Then Bounced Back From Bankruptcy
There are only more than 3,300 locations in the USA. In 2023, the company is over $ 4.5 billion. In 2024, he made the top 10 of the Franchise 500 of the Entrepreneur Magazine – a list of the best businesses worth investing. America’s only third largest sandwich brand behind Subway and Parara. When we look at these numbers, you can never imagine that this sandwich chain almost went under the 1970s before returning. We’re talking about Arby’s and the story of how it rises from these ashes.
Forrest and Leroy Raffel brothers started Arby’s in 1964, inspired by the rise of McDonald’s and Burger King and their operational efficiency. However, instead of participating in the Burger wars, they bet something different: CLASSIC SANDVİÇ. The Kumar first worked and the chain expanded rapidly and boarded the wave of America’s fast-food explosion. But by 1970, he seemed to bite more than they could chew.
In order to maintain the expansion, the brothers have largely leaned over bank loans and private capital, but these funds could only carry so far. Due to the SEC regulations, the public announcement plans fell and Arby’s financing was rapidly solved without the expected cash infusion. Credit payments have become unseen and the banks tightened the flow of money and refused to release funds to support franchise operations. In contrast, Franchisees stopped sending sales shares back to the center. This is a vicious cycle: before cash arrival, the company could not fulfill its obligations, and at the end of 1970, Arby had no choice but to apply for bankruptcy.
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It is the end of the story of bankruptcy for many chains. Not Arby’s. Raffel brothers took their heads down and started to work. Like experienced entrepreneurs, they first focused on profitability, but then to growth. By 1975, only a few years after the rock hit the bottom, Arby’s returned to more than 500 places throughout the country. To feed the next stage of growth, the brothers chose a different way from unsuccessful public offering attempts; In 1976, they made an agreement to sell Arby’s to RC Cola for $ 18 million (over $ 100 million in today’s money).
Under the ownership of RC Cola, Raffels continued to manage and supervised an increase in more than 800 places by the end of the decade. After giving their feedback in 1979, the brothers moved away and retired as a multimillionaire.
Their exits pointed to the end of the founding section, but it is not the end of Arby’s incredible return. In the next decades, the chain will change hands several times, and each new owner leaves a mark on the brand. Today, Arby’s is part of Inspire Brands, the second largest restaurant company in the United States, both system sales and the number of places in the United States. Inspire has more than 30,000 restaurants in six basic brands, including Arby’s, Baskin-Robbins, Buffalo Wild Wings, Jimmy John’s, Sonic Drive-in and Dunkin.
