Fast-food franchise startup costs can vary greatly, but don’t be fooled. Some big names are offered at a low cost, but with hidden fees and unmentioned obligations, they may not be the best option for you.
BREAKING IT DOWN
Folks are drawn to the world of franchising for a number of reasons. If you want to capitalize on your funds, be your own boss while benefitting from the support, structure, and strength of a known brand, it might be the perfect fit for you, but not all franchises are created equally.
Prospective franchise owners generally have to pay more upfront costs to open a restaurant, along with additional fees and ongoing royalties. However, these costs are rightfully due, paying for ongoing marketing support, assistance, and operational considerations. Some franchisors, like Chick-Fil-A even pay for the buildout costs for new locations. That being said, they do require their franchisees to pay a high royalty and percent of profits to cover the costs.
Chick-fil-A requires no minimum net worth, zero startup costs, and charges a flat$10,000 franchise fee. While that may seem appealing, it’s prudent to know that the company charges some of the highest ongoing royalty fees (15%) in the fast-food franchise industry.
It’s also important to mention that Chick-fil-A prohibits most of its franchisees from opening multiple units, a massive impediment to budding owners. Chick-fil-A calls their franchise owners “operators” instead of “franchisees,” designating them to a single, assigned location with limited growth potential.
They are very clear about limiting your investment potential on their website, saying: “Chick-fil-A franchise opportunities require that the individual be free of any other active business ventures and operate the restaurant on a full-time, hands-on basis.”
With its catchy jingles and taglines, Subway is one of the biggest fast-food franchises in the world. Owing to a menu that appeals to a broad range of customers looking for a quick meal, the Subway brand is worth an estimated $15 billion.
Initial investment costs for a Subway franchise can range between $150,000 to $328,000 for a traditional location, assuming you lease your equipment from the franchisor. In addition to startup costs, Subway franchisees are required to contribute 12.5 percent of gross total sales each week to cover the costs of royalties (8 percent) and advertising (4.5 percent).
Subway currently has approximately 41,600 independently owned franchise locations across the world, with almost as many U.S. locations as McDonald’s and Starbucks combined. However, in recent years Subway has shuttered over 1,000 stores, as the franchise has weathered multiple scandals and struggles to keep up with evolving consumer tastes and advancing technology.
CHECKERS OR RALLY’S
After paying a $30,000 initial fee for a Checkers or Rally’s franchise, pay close attention to the numerous costs attached to your new business deal. In addition to deposits, subleases, and development fees, you will be required to pay additional costs that may not be fully evident upon your initial investment.
Also not a stranger to local controversies, Checkers/Rally’s is still making moves in the QSR burger world. While initial startup costs may not be prohibitive, ongoing fees might be. Franchising since 1991, they require a liquid capital of $250,000 with a total investment between $165,000 to $1,235,400.
Enthusiastic investors, both new and seasoned, can find a great opportunity with Wayback Burgers. With a reasonable initial franchise fee of $35,000 and an estimated total investment between $350,000 to $450,000, Wayback is a manageable and profitable investment for entrepreneurs from all backgrounds.
With over 166 operating franchise locations and more in development, Wayback Burgers is excited to expand with motivated and like-minded franchisees across the world. With the quick-service and fast-casual restaurant segments expected to grow for both customers and franchise owners, Wayback Burgers is positioned to capitalize on the upward mobility by continuously surpassing the competition.
For many fast-food restaurants, particularly your classic burger franchises, there are some significant barriers to entry, such as a high initial investment or lack of availability. Fortunately, Wayback Burgers offers franchisees an accessible point of entry in a segment and brand that continues to grow.
Visit us to learn more about Wayback Burgers’ franchising opportunities in your area.