Top Fast Food Franchise to Invest In

Fast-food franchising is one of the very lucrative businesses. It not only allows the owners to own a restaurant business but also access to the privileges that come with a brand name. Franchisees can skip the start-up costs required in building a brand such as product development, advertising, and marketing, in addition to earning a juicy annual income. While the idea of franchising may seem like a very appealing one, it is costly to own one. Restaurants like McDonald’s or Taco Bell may require at least $750,000 in liquid assets. KFC requires a minimum net worth of $1.5 million. The lowest franchise cost so far is Chick-fil-A, which only requires an initial investment of $10,000 ($15,000 CAD), terms and conditions apply.

Chick-Fil-A

• Franchise Fee: $10,000 ($15,000 CAD)

Chick-fil-A is one of America’s oldest, largest, and most profitable restaurant chains.

Chick-fil-A franchise may just be one of the cheapest to own in the US as it requires no minimum net worth. It also has one of the lowest franchise fees of $10,000 ($15,000 CAD in Canada), and a total investment cost of $10,000. But, it charges one of the highest royalty fees.

Unlike other franchisors, Chick-fil-A covers nearly the entire cost of opening each new unit which runs from $343,000 to $2,000,000, according to its financial disclosures. The franchisee is only expected to pay the $10,000 franchise fee. The implication of his is that Chick-fil-A retains ownership of everything it pays for including real estate, equipment, inventory, etc., and takes a bigger percentage of the generated revenue. It demands 15% of sales + 50% of any profit.

Burger King

• Background Check Fees: $250 USD per person

• Franchise Fee: $50,000 USD per restaurant (per 20-year term)

• Royalty: 4.5% of monthly gross sales

• Advertising Fund: 4.0% of monthly gross sales

Burger King franchise helps entrepreneurs become their own King, by providing them with innovation, achievements, and a proven business model. Franchise owners will also have access to training and other opportunities available to help them make the right decisions to avoid hitting the ground in business. Burger King offers franchising opportunities through multi-unit acquisitions and new restaurant development.

To become a Burger King franchisee, you must first complete an application form, providing details to professional background and personal finances. You would also be required to verify your net worth and liquid assets through a CPA opinion letter. The final step of application is Submission of Business Plan proposal including organization structure, operations plan, marketing plan, growth, and acquisition plan.

The standard qualifications apply to franchisees in the continental US market. Applicants from other countries may see a slight change in the application process.

Burger King also offers franchisees with real estate development options. With their strong team of real estate professionals with growth-driving initiatives, Franchisees are sure to get the right locations. There are various options for franchise owners who either want to stick to the Burger King signature prototype or have something else in mind.

Wingstop

• $346,775 - $733,249

• Net Worth Requirement: $1,200,000

• Liquid Cash Requirement: $600,000

• Initial Franchise Fee: $20,000

• Ongoing Royalty Fee: 6%

• Ad Royalty Fee: 4%

Wingstop is a US-based restaurant business with over 1,000 franchise units worldwide. Its specialty is chicken wings, available in various flavors and served with dips, salads, and drinks. Wingstop offers restaurant franchise opportunities to entrepreneurs over the world looking to start their own business.

To become a Wingstop franchise owner you must have a net worth of more than $360,000. You will also need to become familiar with real estate cost implications associated with owning a restaurant. This includes cost of equipment and signs, cost of insurance, cost of licenses and permits, cost of uniforms, etc. It is best to do personal research on market availability in your area and evaluate your prior experience and capability to own a restaurant.

All applications submitted to the Wingstop franchise team will be reviewed after a confirmation email has been sent. Once your financial and background checks have been completed you will receive approval. Only candidates who meet the requirements of Wingstop will be approved.

The restaurant chain has a franchise fee of up to $20,000 with a total initial investment range of $346,775 to $733,249.

Fees Breakdown

McDonald’s

• Initial Franchise Fee: $45,000

• Estimated Total Initial Investment: $1 million to $2.2 million

• Business Type: Franchise

• Target Market: National

McDonald’s is an American-based restaurant franchise network. It was founded in 1955 with a menu of burgers fries and beverages. It is a leading fast-food chain in the world with more than 38,000 locations worldwide. About 90% of McDonald’s restaurants in the United States are owned and operated by franchisees

The McDonald’s franchise system allows operators to enter by either directly purchasing an existing restaurant from a current McDonald’s operator or from the company itself. The restaurant chain requires at least $955,000 of non-borrowed personal resources to be considered for a McDonald’s franchise. The total investment varies by the restaurants. New owners/operators must pay 40% cash of the total costs of a new restaurant and may choose to finance the remainder from other sources.

The Franchisor requires all franchisees to attend and complete a 12-18-month training program before they will be approved to purchase McDonald’s restaurants. The training is done on a part-time basis.

Dunkin’

• Total Investment: $97,500 to $1,7 million

• Initial Franchise Fee: $40,000 to $90,000 (depending on the location)

• Net Worth Required: $500,000 minimum

• Liquid Capital: $250,000 minimum

Dunkin’ (formerly Dunkin Donuts) is an American-based doughnut and coffee chain. It is rated number one in Coffee and Baked Goods Category by Entrepreneur; rated number one Airport Franchisor by Airport Franchisor; rated number one in Customer Loyalty Brand by Customer Loyalty Index. The company officially dropped its name as ‘Dunkin Donuts’ in January 2019, and now officially goes by the name ‘Dunkin’. The food breakfast chain now serves a wider food and beverage menu, beyond delicious doughnuts.

Dunkin’ franchise offers franchisees a wide variety of benefits including brand identity, global recognition with 12,00 locations worldwide and 8,000 locations in the United States. It also has available online courses on business management through the Dunkin Donuts Online University; a three-day business course in Boston Massachusetts; and strong franchisee support, assistance, and training.

Wendy’s

Wendy’s franchisees operate a quick-service restaurant that offers customers a limited menu of chicken sandwiches, hamburgers, and other complementary items. Before opening a Wendy’s franchisee, operators or owners and their initial management team and restaurant workers must attend and complete an initial training program organized by the franchisor. There will also be ongoing training programs for any new management person that later hired to be involved in the operation of the restaurant. There will be additional courses, seminars, and other training programs as required by Wendy’s. A typical initial training program will last between 20 – 24 weeks, including online, classroom, virtual instructor-led and on-the-job training. The training programs are conducted in various certified restaurants in the United States.

Franchisees will only be allowed to operate their Wendy’s restaurant at selected locations approved by the franchisor, as stated in the Franchise Agreement. Franchise owners have no exclusive rights independent of the operation of their Wendy’s restaurant. All franchisees are also strongly recommended to actively participate in the operation of their Wendy’s restaurant. An individual operator may be assigned to supervise the Wendy’s restaurant if the franchisee is a partnership, corporation, or another business entity.

There are also terms that apply such as an initial franchise term of 20 years. The renewable term is for 10 years only if the franchisees are operating well.

Estimated Initial Investment

KFC

• Liquid Capital Required: $750,000

• Net Worth Required: $1,500,000

• Investment: $1,262,800 - $2,543,000

• Initial Franchise Fee: $45,000

• Estimated Total Initial Investment: $1.4 million to $2.7 million

• Royalty Fee: 5% on gross monthly sales

KFC (founded as Kentucky Fried Chicken) is one of the largest quick-service chicken restaurant brands in the world. It was founded in 1952 by Colonel Harland Sanders, who died in 1980.  KFC has grown beyond crispy, tasty chicken business to a recognized and popular global brand. The restaurant chain is popular for its fried chicken varieties but has expanded its menu to include wraps, sandwiches, salads, mashed potatoes and gravy, coleslaw and corn, etc. In many of its chains outside the US, KFC offers beef and pork products such as kebabs, hamburgers, ribs, poutine, etc.

KFC has more than 15,000 restaurants worldwide, in 109 countries and territories. It has more than 5,200 locations in the United States alone. The company seeks more entrepreneurs to develop multi-unit franchises with KFC locations while providing help every step of the way.

Taco Bell

• Initial Franchise Fee: $25,000 to $45,000

• Estimated Total Initial Investment: $525,525 to $2.8 million

Taco Bell was founded in 1954. It stands as one of the oldest and most popular Mexican-themed fast-food restaurants, with over 7,000 restaurants located across the United States. To become a franchise owner or restaurant operator, you will be required to fill out an application online. Information about your net worth and quick-service restaurant experience will be required, as well as further information on currently owning a multi-unit franchise. Only applicants who qualify will be selected.

Five Guys

• Total Investment: $152,000 - $360,000

• Cash Required: $150,000

• Business Type: Franchise

• Target Market: National

Five Guys Burgers and Fries is a family-owned sit-out burger and fries joint that serves customers hand-made burgers cooked on a grill. Its servings include fresh hand-formed hamburgers, fresh-cut French fries, hot dogs, milkshakes, etc. Five Guys has its headquarters in Lorton, VA. The family business was founded by the Murrell family in 1986 and has grown into a chain of burger joints. In over 30 years the business has expanded into 1,500 locations around the world, including 49 states and Canada, and another 1,500 units in development. Five Guys restaurants are preferably located in strategic locations such as sports arenas, train stations, airports, university campuses, etc.

The restaurant chain is known for three main things: (1) they only use fresh ground beef; (2) they only use peanut oil for the fries; (3) they only use coolers to keep their products fresh, no freezers.

To own a Five Guys franchise, the Operating Principal, General Manager, and an Assistant Manager must all attend and complete an initial training course at the restaurant’s corporate headquarters. The initial training course lasts only two weeks, but up to six weeks training may be required.

Pizza Hut

• Liquid Capital Required: $350,000

• Net Worth Required: $700,000 minimum

• Investment: $297,000 - $2,109,000

• Franchise Fee: $25,000 (for a 20-year agreement)

• Units in Operation: $6,000

Pizza Hut is a leading American-based restaurant chain found in 1958 by Frank and Dan Carney. It offers a wide selection on its menu, including Pizza (which is the most ordered food), wings, pasta, desserts, drinks, sides, and calzones. Pizza Hut has two main restaurant designs: the original dine-in locations and storefronts that only offer delivery and takeout items.

Pizza Hut only selects franchisees with solid experience in restaurant or retail management. Operators/owners must the committed to opening at least two separate locations, and hope to expand to at least five locations in the years to come. Pizza Hut is currently interested in growing its franchises in New York, Washington D.C., Rhode Island, Massachusetts, and New Hampshire.