What it costs to open 12 of the biggest fast-food chains in the US, including Chick-fil-A, McDonald's, and Taco Bell
It costs more than $1 million to open a McDonald's or Wendy's franchise.
Meanwhile, costs range between $219,000 and $2.9 million to open a Chick-fil-A franchise.
Insider compiled a list of basic financial requirements to become a franchisee for 12 major fast-food chains.
Owning 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. Additionally, the average McDonald's restaurant logs about $4 million in yearly sales.
However, opening a franchise requires a hefty amount of cash to cover the startup costs. For example, you must have at least $500,000 in liquid assets to open a McDonald's and $750,000 to open a Taco Bell.
Additionally, franchisees have to pay ongoing monthly fees for royalties, advertising, and other services that can add up to more than 10% of gross sales – like KFC, which charges franchisees 5% royalty fees and 5% advertising fees. And, while the typical Chick-fil-A franchise can exceed $8 million in sales, franchise owners must pay 50% of their net profits to the chain.
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, listed in alphabetical order. The below values 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.
Correction: March 20, 2023 — An earlier version of this story misstated the range of total startup costs for Arby's. It is between $628,950 and $2.3 million, not between $628,950 and $12.3 million.
Arby's: $628,950 to $2.3 million
Total startup costs: $628,950 to $2.3 million
Minimum liquid asset requirement: $500,000
Minimum net worth requirement: $1 million
Franchise fee: $6,250 to $12,500 development fee, plus $0 to $37,500 license fee.
Ongoing fees: Arby's charges a royalty fee of 4% of sales and an advertising fee of 4.2% of sales.
Average per-unit sales*: $1.2 million
*2020 figures according to QSR Magazine.
Burger King: $230,000 and $4.2 million
Startup costs: $230,000 to $4.2 million
Minimum liquid asset requirement: $500,000
Minimum net worth requirement: $1 million
Franchise fee: $50,000 for a 20-year franchise agreement
Ongoing fees: Burger King charges a 4.5% royalty fee and a 4% advertising fee (based on gross sales).
Average per-unit sales: $1.47 million
*2021 figures according to the chain's 2022 Franchise Disclosure Document.
Chick-fil-A: $219,055 to $2,912,697
Startup costs*: $219,055 to $2,912,697
Minimum liquid asset requirement: none
Minimum net worth requirement: none
Franchise fee: $10,000
Ongoing fees: Chick-fil-A franchisees pay a "base operating service fee" of 15% of sales and an additional fee of 50% of net profits. 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 told Insider it selects "a relatively small number of franchisees to operate multiple units."
Average per-unit sales: Most locations average about $8.1 million in sales per year.
*2021 figures according to the chain's 2022 Franchise Disclosure Document.
Dairy Queen: $1.4 million to $2.4 million
Startup costs: $1.4 million to $2.4 million
Minimum liquid asset requirement: $400,000
Minimum net worth requirement: $750,000
Franchise fee: $45,000
Ongoing fees: Dairy Queen charges a 4% royalty fee and between 5% to 6% in marketing fees.
Average per-unit sales*: $912,000
*2020 figures according to QSR Magazine.
Dunkin' Donuts: $526,900 to $1.78 million
Startup costs: $526,900 to $1.78 million
Minimum liquid asset requirement: $250,000
Minimum net worth requirement: $500,000
Franchise fee: $40,000 to $90,000
Ongoing fees: Dunkin' Donuts charges 5% of gross sales for advertising fees and royalties fees between 2% to 6% of gross sales.
Average per-unit sales*: $930,000
*2020 figures according to QSR Magazine.
KFC: $1.4 million to $2.8 million
Startup costs*: $1.4 million to $2.8 million
Minimum liquid asset requirement: $750,000
Minimum net worth requirement: $1.5 million