What it costs to open 12 of the biggest fast food chains in the US, from Chick-fil-A to McDonald's

A Chick-fil-A restaurantMichael Siluk/UCG/Universal Images Group via Getty ImagesBecoming 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. 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 US based 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.Arby's: $644,950 to $2.4 millionAn Arby's restaurantAssociated PressTotal startup costs: $644,950 to $2.4 millionMinimum liquid asset requirement: $500,000Minimum net worth requirement: $1 millionFranchise fee: A $12,500 development fee, a $37,500 license feeOngoing 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. Average per-unit sales: $1.1 million to $1.6 million, depending on store type, per franchisee disclosure documentBurger King: $363,400 to $4.7 millionStarting up a Burger King franchise requires a net worth of at least $1 million.Damian Dovarganes/APStartup costs: $363,400 to $4.7 millionMinimum liquid asset requirement: $500,000Minimum net worth requirement: $1 million Franchise fee: $50,000 for a 20-year franchise agreementOngoing 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 documentChick-fil-A: $426,735 to $2.3 millionChick-fil-A employees at a restaurantAndrew Renneisen/Getty ImagesStartup costs: $426,735 to $2.3 millionMinimum liquid asset requirement: noneMinimum net worth requirement: noneFranchise fee: $10,000 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. 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.Dairy Queen: $1.5 million to $2.5 millionA vintage Dairy Queen signWikiMedia CommonsStartup costs: $1.5 million to $2.5 millionMinimum liquid asset requirement: $400,000Minimum net worth requirement: $750,000Franchise fee: $45,000Ongoing fees: Dairy Queen charges a 4% royalty fee and between 5% to 6% in marketing fees.Average per-unit sales*: $1.2 million*2023 figures according to QSR Magazine.Dunkin' Donuts: $526,900 to $1.8 millionPeople waiting outside of a Dunkin' restaurantNick Ut / AP ImagesStartup costs: $526,900 to $1.8 millionMinimum liquid asset requirement: $250,000Minimum net worth requirement: $500,000Franchise fee: $40,000 to $90,000Ongoing fees: Dunkin' Donuts charges 5% of gross sales for advertising fees and a royalty fee of 5.9% of gross sales.Average per-unit sales: $1.3 million in 2024, per franchisee disclosure documentKFC: $1.9 million to $3.8 millionPeople standing in line at a KFC locationWilfredo Lee / AP ImagesStartup costs: $1.9 million to $3.8 million for a traditional outletMinimum liquid asset requirement: $750,000Minimum net worth requirement: $1.5 millionFranchise fee: $45,000Ongoing fees: KFC charges franchisees about 10% of gross revenues (4% to 5% for royalties and 5% for advertising).Average per-unit sales: $1.3 million, per franchisee disclosure documentMcDonald's: $1.5 million and $2.7 millionA sign outside of a McDonald's restaurantAPStartup costs: $1.5 million and $2.7 millionMinimum liquid asset requirement: $500,000 Franchise fee: $45,000Ongoing 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. 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.Average per-unit sales: $4 millionPapa John's: $272,915 to $989,415Papa John's pizzaKate TaylorStartup costs: $272,915 to $989,415Minimum liquid asset requirement: $250,000Minimum net worth requirement: $750,000Franchise fee: $25,000Ongoing 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.Average per-unit sales: $1.1 millionSonic: $1.7 million to $3.4 millionThe sign outside of a Sonic restaurantHollis Johnson/Business InsiderStartup costs: $1.7 million to $3.4 millionMinimum liquid asset requirement: $500,000Minimum net worth requirement: $1 millionFranchise fee: $30,000 of the $45,000 initial license fee credited via royalty.Ongoing fees: Sonic charges a royalty fee of up to 5% of gross sales and advertising fees of at least 3.25%.Average per-unit sales: $1.6 millionSubway: $199,135 to $536,745The window of a Subway restaurantWikipediaStartup costs*: $199,135 to $536,745Minimum liquid asset requirement: $100,000 Minimum net worth requirement: $150,000 Franchise fee: $15,000Ongoing fees: Subway franchisees pay weekly fees based on gross sales, which include an 8% royalty fee and 4.5% fee for advertising.Average per-unit sales: $490,000 in 2023, according to TechnomicTaco Bell: $1.9 million to $4.3 millionCustomers line up at a Taco Bell restaurant inside Miami International Airport in Miami.AP/Wilfredo LeeStartup costs: $1.9 million to $4.3 millionMinimum liquid asset requirement: $2 millionMinimum net worth requirement: $5 millionFranchise fee: $45,000Ongoing fees: Taco Bell charges a period franchise fee equal to 5.5% of gross sales and a period marketing fee equal to 4.25% of gross sales.Average per-unit sales: $2.1 million in 2023, according to QSR MagazineWendy's: $1.5 million to $3 millionThe drive-thru lane at a Wendy's restaurantAPStartup costs: $1.5 million to $3 million for a cash purchase, though the fee can be lower depending on financing optionsMinimum liquid asset requirement: $500,000Minimum net worth requirement: $1 million Franchise fee: $50,000Ongoing fees: The advertising fee is 4% of gross sales and covers both national and local advertising. The royalty fee is 4% to 6% of gross sales.Average per-unit sales: $2.1 million for franchise locationsRead the original article on Business Insider

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