In January, Entrepreneur released its 2019 Top 500 Franchise Ranking. At the top of the list, with over 37,000 locations worldwide, is arguably the most famous burger franchise in history: McDonald’s. But not everyone who has the desire to purchase or start their own McDonald’s franchise will have the financial ability or opportunity to own even a single location.
The initial investment for one unit is between $1,058,000 and $2,230,000 and, according to their website, McDonald’s does not allow partnerships with investors or family members. They also require franchisees to complete 12–18 months of training before being allowed to purchase a location, and there is no guarantee a restaurant will be available in your desired territory once training has been completed.
Initial Investment Costs — Aligning Expectations and Reality
When evaluating any franchise, restaurant or otherwise, you can find a breakdown and range of the initial investment costs under Item 7 of the Franchise Disclosure Document (FDD). The initial investment amounts for the top five restaurant franchises on the 2019 Entrepreneur list range from $229K – $4.7M, making the average initial investment for a single unit around $2.5M.
But if you are a first-time investor or someone looking for a business opportunity with a more accessible point of entry and the ability to scale more quickly, a fast-casual concept, such as a Wayback Burgers franchise, is an excellent option to explore. In fact, Wayback Burgers was listed as one of the Top 10 Fast Casual Restaurant Franchises for 2019 by FranchiseRankings.com, and QSR magazine highlighted the brand’s growth in a mid-2018 article titled Inside the Blazing Growth of Wayback Burgers.
Breaking Down the Item 7: Estimated Initial Investment
What’s important to understand about the estimated initial investment listed in Item 7 of the FDD for any franchise is that it is just as the description indicates — an estimate. The Federal Trade Commission (FTC) does not require franchisors to publish a comprehensive list of costs, but rather an estimate that reflects the typical costs associated with starting your first franchised location.
Typical costs will vary, depending on the type of franchise and business, but you can usually expect to see costs listed for: initial franchise fee, training expenses, real estate and improvements, equipment and signage, opening inventory, and initial advertising costs. The FTC also requires franchisors to include a line item called “Additional Funds,” which franchisees often incur before opening and through an initial operating period — as indicated within this line item.
How Does Wayback Burgers Compare?
With a Wayback Burgers franchise, you can expect the initial investment to hover somewhere between $209,000 and $524,500, making it more accessible to entrepreneurs looking for the opportunity to start their own fast-casual burger franchise for well under $1 million. For investors with access to more capital, a lower investment level means the opportunity to build multiple locations over a shorter period of time.
The restaurants themselves have a small footprint — average traditional Wayback restaurants are between 1,600 and 1,800 square feet — in contrast to the average McDonald’s or Burger King franchise (traditional locations for both are approximately 4,000 square feet), which means costs associated with real estate, buildout and equipment are less.
If you are a first-time business owner looking for guidance, systems and support, or a seasoned entrepreneur looking for your next investment opportunity, check out Wayback Burgers.
Wayback Burgers offers qualified candidates the opportunity to open and operate a business in the highly sought-after fast casual sector with a small footprint and a big upside. Currently operating in 30 states and seven countries, the Connecticut-based burger franchise increased its system size by 14 percent in 2018, reaching 156 locations, and is projecting similar growth for 2019. Wayback offers initial training and ongoing support for all its franchisees and works diligently on finding innovative ways to offer franchisees the opportunity to increase revenue while adding value to the customer experience. For more information on how to get started visit https://waybackstaging.wpengine.com/franchising/.