how much to buy a restaurant franchise

Cost to Start a Restaurant Franchise #

• Starting an Applebee's franchise requires an initial investment of about $1 million. ...
• Panera estimates initial startup costs to be $816,886 to more than $2 million, excluding real estate costs. ...
• Starting a Burger King Franchise costs anywhere from $300,000 to $3 million, depending on location. ...

Full Answer

Should you buy a restaurant franchise?

When you buy a franchise, you get the right to use the name, logo, and products of a larger brand. You’ll also get to benefit from brand recognition, promotions, and marketing. But, it also means you have to follow rules from the larger brand about how you run your business.

How much does it cost to purchase a franchise?

• Franchise Fee: This amount can vary, depending on the franchise, but the average amount is typically $20,000 or $50,000, according to the Small Business Administration. This is paid when you first purchase your franchise.

How much does it cost to franchise a Pizza Inn?

To buy a franchise with Pizza Inn, you'll need to have at least $50,000 in liquid capital and a minimum net worth of $200,000. Franchisees can expect to make a total investment of $352,000 - $798,000.

What is the average cost of a franchise?

While the franchisor can provide you with an estimate for the working capital needed, you should do your own research too. In general, most franchise fees are between $20,000 and $50,000. Mobile businesses or home-based businesses could be less than $20,000.

Do franchises have to be reviewed?

Is buying a franchise restaurant the best choice for you?

How much money does it take to franchise a restaurant?

While buying a franchise can cost anywhere from $50,000 to $6 million, most startup investments for franchise restaurants start in the $200,000 to $300,000 range. You might not be allowed to borrow funds to cover these startup costs. Some franchisors require unborrowed funds and a minimum net worth for approval.

What are the cheapest restaurant franchises to buy?

Top 10 Cheap Restaurant FranchisesBaskin Robbins. Baskin-Robbins is a leader amongst the ice cream franchises with a business model that has been proven successful in more than 7,700 shops in 52 countries. ... Cold Stone Creamery. ... Chick-Fil-A. ... Chester's Chicken. ... Firehouse Subs. ... Quizno's. ... Taco Bell. ... Mucho Burrito.More items...

Is owning a franchise restaurant profitable?

Buying a franchise might seem like easy money, but those royalties and fees will quickly cut into profit margins. The majority of franchise owners earn less than $50,000 per year.

How much do restaurant franchise owners make?

Franchise owner salary range? The average annual salary for a franchise owner in the restaurant industry is $82,000. This number is quite impressive considering that the range of salaries for a non-franchise owner of a restaurant can be anywhere from $24,000 to $155,000.

What is Starbucks franchise fee?

What are the Financial requirements for a Starbucks licensed store? You need to pay the licensing fee of between $50,000 – $315,000 and you must have over $1,000,000 in liquid assets to be considered for a licensed store by Starbucks.

What is McDonald's franchise fee?

McDonald's franchisee applicants must have a minimum of $500,000 available in liquid assets and pay a $45,000 franchise fee. Those looking to launch a new McDonald's franchise can expect to shell out between $1,314,500 and $2,306,500. Existing franchise prices can cost upwards of $1 million or more.

Which franchise makes the most money?

What is the most profitable franchise to own? According to the Franchise 500 list of 2021, Taco Bell is the most profitable franchise to own. The food chain has been franchising for nearly 6 decades and is still seeking franchises worldwide. As of 2021, they have 7,567 open units.

Do franchise owners have to work?

Owning a franchise unit can be demanding, requiring work of 60 to 70 hours a week, but owners have the satisfaction of knowing that their business's success is a result of their own hard work. Some people look for franchise opportunities that are less demanding and may only require a part-time commitment.

What is the failure rate for a franchise?

Pretty much every year the survey has been conducted has shown between 8-12% of franchise businesses left their franchise each year. This is for a variety of reasons, including retirement, selling, ill-health and financial failure.

How much does a McDonald's owner make annually?

With an average initial investment of about $1.8 million, it would take you 8.5 years or less to recoup the McDonald's franchise cost with a 10% or more profit margin. These figures are calculated from the 2020 average median net sales from a McDonald's franchise in the US, which is about $2.9 million.

How do franchisees get paid?

How do franchise owners get paid? Franchise owners can pay themselves a salary or depending on their business entity, they may be able to take a draw from their accumulated equity.

How much do 7 Eleven franchise owners make?

The estimated base pay is $82,642 per year. The estimated additional pay is $58,474 per year. Additional pay could include bonus, stock, commission, profit sharing or tips.

How much is a Wendy's franchise?

Does it include start-up supplies and training? The standard franchise fee is $50,000 for a franchise agreement with a term of 20 years.

How much does a Taco Bell franchise cost?

Total cost: A standalone Taco Bell franchise location is estimated to cost between $1.2 million and $2.6 million, exclusive of land and lease costs. Initial investment: Initial investments will vary significantly based on your location and the type of restaurant.

What is the most profitable franchise?

Top 14 Most Profitable FranchisesMcDonald's. Units in operation: 39,360. ... Dunkin Donuts. Units in operation: 12,800. ... Taco Bell. Units in operation 12,800. ... Subway Franchise. Offers Financing: Yes. ... Anytime Fitness Franchise. Units in operation: 4,904. ... Sonic. Royalty: 2.5% - 5.0% ... Planet Fitness. Royalty 7.0% ... Orangetheory Fitness.More items...

What does a Chipotle franchise cost?

Estimated Chipotle Franchise CostType of ExpenditureEstimated AmountLowHighChipotle Franchise Fee (if they franchised)$20,000$25,000Real Estate Purchase or Lease(may vary substantially based upon the location)Site Preparation and Completion Costs$150,000$400,00011 more rows•Jul 19, 2022

How to advertise a restaurant?

In addition to online advertising and marketing, your restaurant should also use outdoor and physical marketing, such as hanging open signs, adding the date of your grand opening to the business's sign, or handing out flyers. Additionally, depending on the size of your establishment and your community, you can also reach out to your local newspaper, radio station, or news affiliate for coverage.

What to ask a restaurant about inventory?

Be sure to inquire about the restaurant's current inventory including disposables and food items. You will also want to ask about the restaurant's food shipments and any existing contracts with vendors.

Why do you ask questions during a restaurant negotiation?

Asking questions during the negotiation process can help you assess more in-depth if this is a good deal or not. Plus, depending on the restaurant owner's answers, you may have some leverage in the negotiating process to drive down the asking price or make some other concessions.

What is a transition plan for a restaurant?

Your transition plan should be comprehensive and also include completion dates to keep your new restaurant on track. During this step, you can also begin marketing the new restaurant and putting out notifications on social media that the business is under new ownership to create interest.

What to look for when looking at a restaurant listing?

Competitor analysis: When looking at a restaurant listing, make sure to note any other restaurants nearby and their popularity. If there is stiff competition in the area, it may not be a good investment.

How to determine if a business is profitable?

You can find out if the business will be profitable by comparing the sale price to the business's revenue and cash flow. But, be sure to also leave room for any replacements, renovations, and upgrades you may need to make when you take over the business.

What are the assets of a restaurant?

What are the restaurant's assets? Things like equipment, staff, furniture, etc.

How much does it cost to open a restaurant?

The initial franchise fee to open your own location costs $20,000. The total investment cost can range from $1,391,820 to $1,774,210, making this restaurant franchise on the pricier side. To learn more about the various investment costs and to become a franchisee, you can check out their website.

How much does it cost to franchise Mediterranean street food?

PITA Mediterranean Street Food requires their franchisees to have at least $100,000 in liquid assets and a net worth of $300,000. Depending on your location, the total investment (including a $35,000 initial franchise fee per location) can range from $175,000 to $350,000, making the cost significantly lower than other restaurant franchisees. If you’re ready to bring delicious Mediterranean food to your customers, apply to be a franchisee through their website.

What are the best franchise opportunities for 2020?

In this guide, we’re listing the top restaurant franchise opportunities for 2020. 1. Panera Bread. Panera Bread’s humble roots began in 1980 when they opened a single 400-square-foot cookie store in Boston, Massachusetts. Since then, they have expanded to over 2,300 bakery-cafes across the United States and Canada.

How much does it cost to franchise another broken egg?

If Another Broken Egg has piqued your interest, here’s what you need to know about becoming a franchisee: A $50,000 franchise fee applies for your first cafe and drops to $35,000 for any subsequent locations opened. After you sign your franchise agreement, you will pay a 5% royalty fee, a 1% advertising fund, and a 2% local store marketing fee. For more information, visit their website to submit an inquiry.

Is it good to start a franchise?

Of course, there are both advantages and disadvantages to consider. Starting a restaurant franchise often demands a significant investment in the form of franchise fees. Luckily, you don’t have to come up with all that capital on your own. There are several franchise financing options to help you fund this business endeavor.

Who is responsible for franchise fees?

Keep in mind that franchisees are responsible for additional franchise fees on top of the initial franchise cost. For a full breakdown of franchise fees, you can refer directly to the information available on the franchisor’s website.

What are the criteria for KFC franchise?

The six major factors KFC evaluates in their franchise applicants include “multi-unit operations experience, financial qualifications, personal and financial reputation, motivation and commitment, culture and brand fit and growth mindset, ” among other factors. KFC has among the more rigorous financial qualifications, too: At a minimum, applicants need a net worth of $1.5 million and $750,000 in liquid assets, though these requirements will vary (i.e. be higher) depending on your ownership level.

How much money do you need to own a Pizza Hut?

(Another fun fact? The very first product ever ordered online was a Pizza Hut pizza.) At a minimum, prospective Pizza Hut franchisees need to have $700,000 in net worth, $350,000 in liquid assets and a strong credit report. Applicants will also need to present Pizza Hut with a financial plan detailing how they’ll grow their location.

How much money do you need to open a Papa John's?

At a minimum, Papa John’s franchisees need to have $75,000 in cash or liquid assets, a net worth of $250,000, and the ability to secure up to $275,000 in outside financing.

How many flavors does Baskin Robbins have?

Since their beginnings in 1945, Baskin-Robbins has become one of the best-known ice cream shops in the world thanks to their revolutionary “31 flavors” ethos, which ostensibly allows devotees to try a new flavor every day of the month.

Do you need to meet the minimum requirements to buy a Baskin Robbins franchise?

If you’re interested in buying a Baskin-Robbins franchise, you’ll need to meet their minimum requirements. Financial requirements vary according to your location and the type of Baskin-Robbins store you’re interested in buying (either a traditional storefront or a non-traditional location, like a kiosk).

Is Ben and Jerry's a philanthropic franchise?

Other than being the mastermind behind such beloved ice cream flavors as Cherry Garcia and Phish Food, Ben & Jerry’s is one of the most philanthropic franchises in the country. Their Ben & Jerry’s Foundation, for instance, is an employee-led organization that aims to engage in local community work and support grassroots social justice organizations and movements. Buying a Ben & Jerry’s franchise is a unique opportunity for similarly aligned business owners to flex both their entrepreneurial skills and their passion for social justice.

Do franchises have to be reviewed?

Still, it’s vital to thoroughly review the franchise agreement and verify that you understand everything it entails, and that there aren’t any rules or requirements included that will negatively impact your personal and professional goals.

Is buying a franchise restaurant the best choice for you?

First, it’s important to decide if buying a franchise is the best option for attaining your business goals.