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It prices greater than $1 million to open a McDonald’s or Wendy’s franchise.
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In the meantime, prices vary between $219,000 and $2.9 million to open a Chick-fil-A franchise.
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Insider has compiled an inventory of fundamental monetary necessities to change into a franchisee for 12 main fast-food chains.
Proudly owning a quick meals franchise is usually a profitable enterprise.
One Greatest performing Chick-fil-A The restaurant reported gross sales of greater than $17 million in 2021, greater than double the typical unit gross sales quantity for the chain, based on Chick-fil-A’s 2022 franchise disclosure doc. As well as, the common McDonald’s restaurant data roughly $4 million in annual gross sales.
Nonetheless, opening a franchise requires a big sum of money to cowl startup prices. For instance, you have to have no less than $500,000 in liquid property to open a McDonald’s and $750,000 to open a Taco Bell.
As well as, franchisees need to pay ongoing month-to-month charges for royalties, promoting and different companies that may add as much as greater than 10% of product sales – like KFC, which prices franchisees 5% royalty and 5% promoting. And whereas the standard A Chick-fil-A franchise can do greater than $8 million in gross salesfranchise house owners should pay 50% of their internet earnings to the chain.
Insider has compiled an inventory of some fundamental monetary necessities to change into a franchise proprietor of 12 of the biggest fast-food chains in the US, listed in alphabetical order. The values under are primarily based on “conventional” franchise places, which means they’re stand-alone eating places versus models in airports, malls, universities or different buildings.
Following the identify of every restaurant chain are the typical complete startup prices to open a restaurant in the US.
Arby’s: $628,950 to $12.3 million
Whole startup prices: $628,950 to $2.3 million
Minimal liquidity requirement: $500,000
Minimal internet price requirement: $1 million
Franchise Payment: $6,250 to $12,500 growth charge, plus $0 to $37,500 license charge.
Present charges: Arby’s prices a royalty of 4% of gross sales and an promoting charge of 4.2% of gross sales.
Common gross sales per unit*: $1.2 million
* In accordance with 2020 figures QSR Journal.
Burger King: $230,000 and $4.2 million
Startup prices: $230,000 to $4.2 million
Minimal liquidity requirement: $500,000
Minimal internet price requirement: $1 million
Franchise Payment: $50,000 for a 20-year franchise settlement
Present charges: Burger King prices a 4.5% royalty charge and a 4% promoting charge (primarily based on product sales).
Common gross sales per unit: $1.47 million
*2021 figures based on the chain’s 2022 Franchise Disclosure Doc.
Chick-fil-A: $219,055 to $2,912,697
Startup prices*: $219,055 to $2,912,697
Minimal liquidity requirement: nobody
Minimal internet price requirement: nobody
Franchise Payment: $10,000
Present charges: Chick-fil-A franchisees pay a “base service charge” of 15% of gross sales and an extra charge of fifty% of internet earnings. Chick-fil-A caps its rental prices at 6% of gross sales.
Nonetheless, it is very important be aware that Chick-fil-A prohibits most of its franchisees from opening a number of models, which might restrict potential earnings, and franchisees should dedicate their full time and a focus to the operation of enterprise. A spokesperson for Chick-fil-A informed Insider that it chooses “a comparatively small variety of franchisees to function a number of models.”
Common gross sales per unit: Most places common about $8.1 million in annual gross sales.
*2021 figures based on the chain’s 2022 Franchise Disclosure Doc.
Dairy Queen: $1.4 million to $2.4 million
Startup prices: $1.4 million to $2.4 million
Minimal liquidity requirement: $400,000
Minimal internet price requirement: $750,000
Franchise Payment: $45,000
Present charges: Dairy Queen prices a 4% royalty charge and between 5% to six% in advertising charges.
Common gross sales per unit*: $912,000
* In accordance with 2020 figures QSR Journal.
Dunkin’ Donuts: $526,900 to $1.78 million
Startup prices: $526,900 to $1.78 million
Minimal liquidity requirement: $250,000
Minimal internet price requirement: $500,000
Franchise Payment: $40,000 to $90,000
Present charges: Dunkin’ Donuts prices 5% of product sales for promoting charges and royalties between 2% to six% of product sales.
Common gross sales per unit*: $930,000
* In accordance with 2020 figures QSR Journal.
KFC: $1.4 million to $2.8 million
Startup prices*: $1.4 million to $2.8 million
Minimal liquidity requirement: $750,000
Minimal internet price requirement: $1.5 million
Franchise Payment: $45,000*
Present charges: KFC prices franchisees roughly 10% of gross income (5% for royalties and 5% for promoting).
Common gross sales per unit**: $1.2 million
*In accordance with Franchise Directwhich cited a 2019 KFC Franchise Disclosure Doc.
** Figures based on 2018 QSR Journal.
McDonald’s: $1.36 million and $2.45 million
Startup prices*: $1.36 million and $2.45 million. For brand spanking new eating places, most of these prices cowl indicators, seating, gear and decor, based on the chain’s 2022 disclosure report.
Minimal liquidity requirement: : $500,000
Franchise Payment: $45,000
Present charges: The bottom lease varies relying on when the restaurant opened together with acquisition and growth prices. The lease for many new McDonald’s eating places ranges from 10% of complete product sales to $15.75% for brand spanking new eating places opening on January 1, 2020.
Moreover, there are quite a few month-to-month and annual charges that franchisees should pay, together with a month-to-month service charge equal to 4% of product sales and greater than $11,000 in annual charges for software program and {hardware} help and upkeep. restaurant gear akin to cost processing programs and kiosks.
Common gross sales per unit: $4 million
*2021 figures based on the chain’s 2022 Franchise Disclosure Doc.
Papa John’s: $36,500 to $788,930
Startup prices: $36,500 to $788,930
Minimal liquidity requirement: $250,000
Minimal internet price requirement: $750,000
Franchise Payment: $5,000 to $25,000
Present charges: Papa John’s prices a month-to-month royalty price of 5% of internet gross sales which is due on a month-to-month foundation. Papa John’s additionally requires franchisees to spend 8% of internet month-to-month gross sales on advertising.
Common gross sales per unit*: $1 million
* In accordance with 2020 figures QSR Journal.
Sonic: $1.24 million to $3.53 million
Startup prices: $1.24 million to $3.53 million
Minimal liquidity requirement: $500,000
Minimal internet price requirement: $1 million
Franchise Payment: $30,000 of the preliminary license charge of $45,000 credited by way of royalties.
Present charges: Sonic prices a royalty charge of as much as 5% of product sales and promoting charges of no less than 3.25%.
Common gross sales per unit*: $1.6 million
* In accordance with 2020 figures QSR Journal.
Metro: $222,050 to $506,900
Startup prices*: $222,050 to $506,900
Minimal liquidity requirement: $100,000
Minimal internet price requirement: $150,000
Franchise Payment: $15,000
Present charges: Subway franchisees pay weekly charges primarily based on product sales, which embody an 8% royalty charge and a 4.5% promoting charge.
Common gross sales per unit: $434,000
* Figures 2021 second Technical
Taco Bell: $1.2 million to $2.9 million
Startup prices: $1.2 million to $2.9 million. This contains the franchise charge and different startup bills akin to actual property and building. Prices are barely decrease — between $175,000 and $1.8 million — for franchisees to accumulate an current Taco Bell restaurant.
Minimal liquidity requirement: $750,000 minimal
Minimal internet price requirement: $1.5 million
Franchise Payment: $45,000 for a brand new conventional Taco Bell restaurant. Charges are decrease ($25,000) for an in-line or end-cap restaurant.
Present charges: Taco Bell prices a royalty charge equal to five.5% of product sales and a advertising charge equal to 4.25% of product sales.
Common gross sales per unit*: $1.6 million
* In accordance with 2018 figures QSR Journal.
Wendy’s: $329,500 to $3.7 million
Startup prices*: $1.2 million to $3.7 million for the money buy; $556,500 to $1.1 million in funding; and $329,500 to $647,500 for a restaurant lease.
Minimal liquidity requirement: $500,000
Minimal internet price requirement: $1 million
Franchise Payment: $50,000 for a 20 yr lease
Present charges: The promoting charge is 4% of product sales and covers nationwide and native promoting. The royalty price is 4% or 6% of product sales, relying on the kind of restaurant.
Common gross sales per unit: $1.9 million for franchise places.
*2021 figures based on the chain’s 2022 Franchise Disclosure Doc.
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