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Becoming a franchisee for a fast food restaurant is one road to running a business.
But costs and requirements vary widely depending on the restaurant chain.
Business Insider compiled a list of financial requirements to become a franchisee for 12 major fast food chains.
A fast food franchise can be a lucrative business.Â
One top performing Chick-fil-A restaurant reported sales of over $17 million in 2021, more than double the average per unit sales volume for the chain, according to Chick-fil-A’s 2022 franchise disclosure document. Other chains also say that franchisees can earn millions of dollars a year from a single store.
Opening a franchise requires a hefty amount of cash to cover the startup costs, though. Many chains require franchise fees in the tens of thousands of dollars as well as personal worth requirements in the hundreds of thousands, for instance.
There are also ongoing monthly fees for royalties, advertising, and other services that often get deducted from sales.
Business Insider compiled a list of some basic financial requirements for becoming a franchise owner of 12 of the biggest fast food chains in the USbased on public filings. The values below are based on “traditional” franchise locations, meaning they are stand-alone restaurants as opposed to units in airports, malls, universities, or other buildings.
Following the name of each restaurant chain are the average total startup costs to open one restaurant in the US.
Franchise fee: A $12,500 development fee, a $37,500 license fee
Ongoing fees: Arby’s charges a royalty fee of either 4% or 6.2% of sales, depending on store type, plus an advertising and marketing service fee of 4.2% of sales.Â
Average per-unit sales: $1.1 million to $1.6 million, depending on store type, per franchisee disclosure document
Burger King: $363,400 to $4.7 million
Starting up a Burger King franchise requires a net worth of at least $1 million.
Franchise fee: $50,000 for a 20-year franchise agreement
Ongoing fees: Burger King charges a 4.5% royalty fee and a 4.5% advertising fee (based on monthly gross sales).
Average per-unit sales: $1.66 million for traditional stores, $1.32 million for non-traditional stores, per franchisee disclosure document
Chick-fil-A: $426,735 to $2.3 million
Chick-fil-A employees at a restaurant
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Startup costs: $426,735 to $2.3 million
Minimum liquid asset requirement: none
Minimum net worth requirement: none
Franchise fee: $10,000Â
Ongoing fees: Chick-fil-A franchisees pay a “base operating service fee” of 15% of sales. Chick-fil-A limits its rent charges to 6% of sales.Â
However, it’s important to note that Chick-fil-A prohibits most of its franchisees from opening multiple units, which can limit potential profits, and franchisees must devote their full time and attention to operating the business. A Chick-fil-A spokesperson previously told BI it selects “a relatively small number of franchisees to operate multiple units.”
Average per-unit sales: In 2024, most locations averaged about $9.3 million in annual sales.
Ongoing fees: Base rent depends on when the restaurant opened, along with the acquisition and development costs. The rent for most new McDonald’s restaurants ranges between 10% of total gross sales to 15.75% for new restaurants that have opened since January 1, 2020.Â
Additionally, there are numerous monthly and annual fees franchisees must pay, including a royalty fee of 4% or 5% of sales and an advertising and promotion fee that is a minimum of 4% of gross sales. Franchisees also pay annual fees for various software and digital equipment, such as a $150 annual fee for using self-ordering kiosks.
Ongoing fees:Papa John’s charges a monthly royalty fee of 5% of net sales. Papa John’s also requires that franchisees spend 6% of net monthly sales on marketing.
