Here's How Much It Costs To Open A Fast Food Franchise
You must have at least $750,000 in liquid assets to open a McDonald's or Taco Bell restaurant, for example. To open a KFC, your net worth must be at least $1.5 million.
On top of initial investments that can exceed $1 million, most chains charge monthly fees that can cost up to 12% of gross sales.
We compiled a list of some basic financial requirements for becoming a franchise owner, based on information provided by six major fast food chains.
Following the name of each restaurant chain is the total startup costs to obtain franchisee rights and open one new restaurant in the US.
Taco Bell: $1.2 million to $2.5 million
Minimum liquid assets: $750,000
Franchise fee: $45,000
Royalty fee: 5.5% of gross sales
Average sales per unit: $1.4 million
Wendy's: $2 million to $3.5 million
Minimum liquid assets: $2 million
Franchise fee: $40,000 per restaurant
Royalty fee: 4% of gross sales
Advertising fee: 4% of gross sales
Average sales per unit: $1.5 million
KFC: $1.3 million to $2.5 million*
Minimum liquid assets: $750,000
Franchise fee: $45,000
Service fee: 4% of gross sales
Advertising fee: 5% of gross sales
Average sales per unit: $942,000
McDonald's: $955,708 to $2.3 million
Franchise fee: $45,000
Service fee: 5% of gross sales
Average sales per unit: $2.5 million
Pizza Hut: $295,000 to 422,000
Minimum liquid assets: $350,000
Franchise fee: $25,000
Service fee: 6% of gross sales
Advertising fee: 2.5% to 3% of gross sales
Average sales per unit: $861,000
Subway: $116,000 to 262,850
Minimum liquid assets: $30,000 to 90,000
Franchise fee: $15,000
Royalty fee: 8% of gross sales
Advertising fee: 4.5% of gross sales
Average sales per unit: $490,000
*According to FranchiseDirect.com