A quick meals franchise generally is a profitable enterprise.
One prime performing Chick-fil-A restaurant reported gross sales of over $17 million in 2021, greater than double the typical per unit gross sales quantity for the chain, in response to Chick-fil-A’s 2022 franchise disclosure doc. Different chains additionally say that franchisees can earn thousands and thousands of {dollars} a yr from a single retailer.
Opening a franchise requires a hefty amount of money to cowl the startup prices, although. Many chains require franchise charges within the tens of 1000’s of {dollars} in addition to private value necessities within the a whole lot of 1000’s, as an illustration.
There are additionally ongoing month-to-month charges for royalties, promoting, and different companies that always get deducted from gross sales.
Enterprise Insider compiled an inventory of some primary monetary necessities for turning into a franchise proprietor of 12 of the most important quick meals chains within the US primarily based on public filings. The values beneath 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 title of every restaurant chain are the typical complete startup prices to open one restaurant within the US.
Arby’s: $644,950 to $2.4 million
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Whole startup prices: $644,950 to $2.4 million
Minimal liquid asset requirement: $500,000
Minimal internet value requirement: $1 million
Franchise payment: A $12,500 improvement payment, a $37,500 license payment
Ongoing charges: Arby’s costs a royalty payment of both 4% or 6.2% of gross sales, relying on retailer kind, plus an promoting and advertising service payment of 4.2% of gross sales.
Common per-unit gross sales: $1.1 million to $1.6 million, relying on retailer kind, per franchisee disclosure doc
Burger King: $363,400 to $4.7 million
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Startup prices: $363,400 to $4.7 million
Minimal liquid asset requirement: $500,000
Minimal internet value requirement: $1 million
Franchise payment: $50,000 for a 20-year franchise settlement
Ongoing charges: Burger King costs a 4.5% royalty payment and a 4.5% promoting payment (primarily based on month-to-month product sales).
Common per-unit gross sales: $1.66 million for conventional shops, $1.32 million for non-traditional shops, per franchisee disclosure doc
Chick-fil-A: $426,735 to $2.3 million
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Startup prices: $426,735 to $2.3 million
Minimal liquid asset requirement: none
Minimal internet value requirement: none
Franchise payment: $10,000
Ongoing charges: Chick-fil-A franchisees pay a “base working service payment” of 15% of gross sales. Chick-fil-A limits its hire costs to six% of gross sales.
Nonetheless, it is vital to notice that Chick-fil-A prohibits most of its franchisees from opening a number of models, which might restrict potential income, and franchisees should dedicate their full time and a focus to working the enterprise. A Chick-fil-A spokesperson beforehand informed BI it selects “a comparatively small variety of franchisees to function a number of models.”
Common per-unit gross sales: In 2024, most places averaged about $9.3 million in annual gross sales.
Dairy Queen: $1.5 million to $2.5 million
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Startup prices: $1.5 million to $2.5 million
Minimal liquid asset requirement: $400,000
Minimal internet value requirement: $750,000
Franchise payment: $45,000
Ongoing charges: Dairy Queen costs a 4% royalty payment and between 5% to six% in advertising charges.
Common per-unit gross sales*: $1.2 million
*2023 figures in response to QSR Journal.
Dunkin’ Donuts: $526,900 to $1.8 million
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Startup prices: $526,900 to $1.8 million
Minimal liquid asset requirement: $250,000
Minimal internet value requirement: $500,000
Franchise payment: $40,000 to $90,000
Ongoing charges: Dunkin’ Donuts costs 5% of product sales for promoting charges and a royalty payment of 5.9% of product sales.
Common per-unit gross sales: $1.3 million in 2024, per franchisee disclosure doc
KFC: $1.9 million to $3.8 million
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Startup prices: $1.9 million to $3.8 million for a conventional outlet
Minimal liquid asset requirement: $750,000
Minimal internet value requirement: $1.5 million
Franchise payment: $45,000
Ongoing charges: KFC costs franchisees about 10% of gross revenues (4% to five% for royalties and 5% for promoting).
Common per-unit gross sales: $1.3 million, per franchisee disclosure doc
McDonald’s: $1.5 million and $2.7 million
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Startup prices: $1.5 million and $2.7 million
Minimal liquid asset requirement: $500,000
Franchise payment: $45,000
Ongoing charges: Base hire is determined by when the restaurant opened, together with the acquisition and improvement prices. The hire for many new McDonald’s eating places ranges between 10% of complete product sales to fifteen.75% for brand spanking new eating places which have opened since January 1, 2020.
Moreover, there are quite a few month-to-month and annual charges franchisees should pay, together with a royalty payment of 4% or 5% of gross sales and an promoting and promotion payment that could be a minimal of 4% of product sales. Franchisees additionally pay annual charges for varied software program and digital tools, corresponding to a $150 annual payment for utilizing self-ordering kiosks.
Common per-unit gross sales: $4 million
Papa John’s: $272,915 to $989,415
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Startup prices: $272,915 to $989,415
Minimal liquid asset requirement: $250,000
Minimal internet value requirement: $750,000
Franchise payment: $25,000
Ongoing charges: Papa John’s costs a month-to-month royalty payment of 5% of internet gross sales. Papa John’s additionally requires that franchisees spend 6% of internet month-to-month gross sales on advertising.
Common per-unit gross sales: $1.1 million
Sonic: $1.7 million to $3.4 million
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Startup prices: $1.7 million to $3.4 million
Minimal liquid asset requirement: $500,000
Minimal internet value requirement: $1 million
Franchise payment: $30,000 of the $45,000 preliminary license payment credited by way of royalty.
Ongoing charges: Sonic costs a royalty payment of as much as 5% of product sales and promoting charges of no less than 3.25%.
Common per-unit gross sales: $1.6 million
Subway: $199,135 to $536,745
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Startup prices*: $199,135 to $536,745
Minimal liquid asset requirement: $100,000
Minimal internet value requirement: $150,000
Franchise payment: $15,000
Ongoing charges: Subway franchisees pay weekly charges primarily based on product sales, which embrace an 8% royalty payment and 4.5% payment for promoting.
Common per-unit gross sales: $490,000 in 2023, in response to Technomic
Taco Bell: $1.9 million to $4.3 million
AP/Wilfredo Lee
Startup prices: $1.9 million to $4.3 million
Minimal liquid asset requirement: $2 million
Minimal internet value requirement: $5 million
Franchise payment: $45,000
Ongoing charges: Taco Bell costs a interval franchise payment equal to five.5% of product sales and a interval advertising payment equal to 4.25% of product sales.
Common per-unit gross sales: $2.1 million in 2023, in response to QSR Journal
Wendy’s: $1.5 million to $3 million
AP
Startup prices: $1.5 million to $3 million for a money buy, although the payment could be decrease relying on financing choices
Minimal liquid asset requirement: $500,000
Minimal internet value requirement: $1 million
Franchise payment: $50,000
Ongoing charges: The promoting payment is 4% of product sales and covers each nationwide and native promoting. The royalty payment is 4% to six% of product sales.
Common per-unit gross sales: $2.1 million for franchise places