Franchise Fees For Popular Fast-Food Restaurants In 2020
Owning fast food restaurants can be pretty lucrative, but to get into the game, you're going to need some pretty substantial preexisting wealth.
How substantial? Well, every single major fast-food chain listed below requires you to be a millionaire to even franchise it. Wendy’s in particular requires $2 million in liquid assets to even be considered for a franchise.
One happy exception? Chick-fil-A, which requires no startup costs. But don’t get too excited, because the chicken giant takes a bigger bite out of gross sales than anyone else mentioned here.
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Before moving forward with franchising a major fast-food chain, it’s important to not only understand the start-up costs but what percentages and royalty fees you will be paying ongoing.
Rather than scouring the interwebs to find out, we made an easily-accessible list that includes the following:
- Total startup costs
- Minimum net worth
- Minimum liquid assets
- Franchise fee
- Royalty fee
- Advertising fee (if applicable)
- Any additional fees
There’s a corresponding link to each franchise site to make it easy to apply -- after you pick your jaw up off the floor, that is.
Burger King
Total startup costs: $1.9 million to $3.3 million
- Minimum net worth: $1.5 million
- Minimum liquid assets: $500,000
- Franchise fee: $50,000
- Royalty fee: 4.5% of gross sales
- Advertising fee: 4% of gross sales
Chick-fil-A
Total startup costs: None
- Minimum net worth: No requirement
- Minimum liquid assets: No requirement
- Franchise fee: $10,000
- Service fee: 15% of gross sales (plus 50% of the remaining pretax profit)
Note: While not across the board, Chick-fil-A tends to stick to a one-location-per franchisee rule, which can limit overall profit margins.
Hardee's
Total startup costs: $1,600,000 to $2,120,000
- Minimum net worth: $1 million
- Minimum liquid assets: $300,000
- Franchise fee: $35,000 (includes a $10,000 development fee)
- Royalty fee: 4% of gross sales
- Advertising fee: Up to 7% of gross sales
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Kentucky Fried Chicken
Total startup costs: $1.4 million to $2.8 million
- Minimum net worth: $1.5 million
- Minimum liquid assets: $750,000
- Franchise fee: $45,000
- Royalty fee: 5% of gross sales
- Advertising fee: 5% of gross sales
McDonald’s
Total startup costs: $1 million to $2.2 million
- Minimum liquid assets: $500,000
- Franchise fee: $45,000
- Royalty fee: 4% of gross sales
Additional fees: According to Business Insider, franchisees must also pay a percentage of monthly sales to account for rent.
Sonic
Total startup costs: $1.24 million to $3.53 million
- Minimum net worth: $1 million
- Minimum liquid assets: $500,000
- Franchise fee: $45,000 ($25,000 for non-traditonal)
- Royalty fee: 5% of gross sales
Taco Bell
Total startup costs: $570,000 to $3 million
- Minimum net worth: $1.5 million
- Minimum liquid assets: $750,000
- Franchise fee: $45,000
- Royalty fee: 5.5% of gross sales
- Sales + marketing fee: 4.25% of gross sales
Wendy’s
Total startup costs: $2 million to $3.7 million
- Minimum net worth: $5 million
- Minimum liquid assets: $2 million
- Franchise fee: $50,000
- Royalty fee: 4% of gross sales
- Advertising fee: 3.5% of gross sales
Additional fees: A $5,000 application fee, which is higher than many others on this list.
[Photo: Erik Mclean via Pexels]