As I read your pitch I was thinking the same thing as Voquin. I took a look at your corner (using Google Street View). On the corners of Main and 4th I see a Rexall store, a tool store, and then the other two corners have beautiful old brick buildings with poor signage. I assume your restaurant is on the SE corner, the boarded up brick building with the dome on top. If that's the one, I'm pretty sure you'll need more than $35K because the outside of the building needs lots of work. The place needs to be opened up with more windows, glass doors, so customers can easily see inside from the street. Dark and closed in restaurants are not inviting, it needs to be light and airy atmosphere to feel clean and sanitary. Drive by customers will make quick decisions to stop based on how the restaurant looks. Looks count, big time, ask any mom. You've got to cater to the moms of the world, and they can be picky to protect their family.
Expanding upstairs seems costly, you would need to increase the size of the windows up there, which means a lot of structural work, maybe impossible. You would need some fabric shades over those windows too so it looks good, cool and inviting.
You need a great sign too, one that looks classy, nothing obscene that doesn't go with the feel of the 100yr old buildings in the area. Spend time on this, it's critical, look around for examples and ask your city council for advice to insure you know the limits. Use Google Images and search on "business signs" for ideas. Oh yeah, Willy's on 66 for a sandwich shop name doesn't work if you ask me. Since you need a sign anyway, consider changing the name for drive by customers, such as Willy's Eatery & Yogurt, or R66 Eatery, or Sandwich Works, Sandwich Factory, Classic Sandwich, Mondo Sandwich, BuckList Sandwich, Super Sandwich or Supreme Sandwich. You need a name that conveys the fact you sell food, I think that would really help.
Tip, if you don't have any frozen yogurt shops in down, consider looking at that option. Self serve frozen Yogurt shops are the rage in California. They offer a low fat treat, are high profit, easy to maintain! But you need traffic, lots of traffic, so I'm not sure your location will work. Toppings galore is what makes a good Yogurt shop, that's the fun and flexibility of the treat. If you've never seen one of these yogurt shops make a trip to Orange County, CA, they are everywhere. Dump the ice cream (high fat) for something light and refreshing for dessert. 31 Flavors ice cream shops have practically gone out of business around here, ice cream is good but people feel guilty eating it. They don't feel guilty eating a non-fat frozen yogurt from a self serve 8 flavor fountain. The multiple flavor aspect is key too, so the whole family gets something they like.
If it's only a sandwich shop (no burgers or tacos), you must do something unique, a signature sandwich, with a wide choice of breads like Squaw bread, focacia, paninis, etc. Sandwich shops can be highly profitable, but you can't survive on plain ho-hum sandwiches, you don't want to compete with Subway. Your sandwiches need to be fantastic so the locals come back and spread the word by mouth. But with only a population of 4000 in Sayre, they need to be fantastic so they keep coming back.
You have a nice location since Main Street (Madden) has an exit from
I-40 and you're only a mile from the freeway. You need a sign on the
freeway, directing them to Sandwich Works. It's great you don't have
any fast food competition at this off-ramp. Put your sign at the
Shell station off-ramp for the East bound I-40 traffic, and at the Stop sign of
the Westbound off-ramp. Yes this may be difficult to get land rights,
but it would be well worth the money to pay the land owner to rent the
space. How else will I-40 traffic know you're only a mile away? Oh by the way, if you do the yogurt option, make sure you put that on
the sign. People will definitely drive an extra 2mi for a yogurt, trust me on
Take Voquin's advice seriously, you may need to re-evaluate your business plan, but I'd say that $35K isn't enough. You might ask your city council if they have any historical redevelopment funds. You might be surprised, they might help you out on the exterior of the building. Optionally, having a fast food restaurant at your I-40 off-ramp is RIPE for the pickings. Someday someone is going to score big and build something there, this off-ramp is begging for a place with food. Remember, thousands of travelers go by on I-40 every day, they're goal is getting from point A to Point B in the least amount of time. Achieving that in as little time as possible is their primary objective, even when they are hungry. Driving into Sayre in hopes to have a sandwich in a historically quaint little sandwich shop isn't part of their plan. Yeah, building a fast food restaurant at the off-ramp is a much bigger investment, but the volume would be 50X what you can get in down town Sayre. When a fast food place opens at the ramp you're location in town will suffer, so the risk of your plan at Willy's is high. A burger/yogurt at this off-ramp, visible from the Shell station, could kill your hunger traffic in town, even for locals. Have you considered that?