Overview
The fast food industry in the US continues to evolve significantly. If you have ever dreamt of opening your fast food restaurant, you might have surely considered popular options like McDonald’s, Burger King or KFC.
While opening your own restaurant carries significant risks, owning a popular franchise mitigates much of that risk and offers significant profits. One such example of a profitable franchise opportunity is Burger King.
By owning a Burger King Franchise in USA, you’ll benefit from its goodwill, training, business model, management support, extensive network of vendors and positive reputation.
However, buying a fully-fledged and popular franchise like Burger King is not limited to just signing the agreement. There are many procedures, understandings and things to keep in mind. In this article, we will discuss the processes, financial requirements, fees and costs of owning a Burger King Franchise in USA.
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Company Profile
Burger King is the world’s leading and most popular fast food restaurant chain, selling hamburgers, fries, fried chicken, soft drinks, onion rings and desserts.
In 1953, founders Keith J. Kramer and Mattew Burns started “Insta-Burger King” in San Bernardino, California. As with success, Pillsbury acquired the company in 1967 and renamed it – Burger King.
Pillsbury extended the menu, increased marketing campaigns, and started franchising, which helped Burger King to grow into the fast food powerhouse it is today.
Today, Burger King has a presence in over 75 countries, with its restaurants at 12,000 locations globally. Fortune magazine listed Burger King in the top 1,000 most prominent corporations in the United States. Additionally, it also found a place in the list of the “100 Best Global Brands.”
Types Of Franchises Offered
Are you planning to own a Burger King franchise in USA, but are confused about what type of franchise option is best for you? We can help you! Burger King offers two types of franchise facilities in the USA: Traditional and Non-traditional facilities.
Traditional Facility
The traditional type of Burger King Franchise in USA usually refers to a fully-fledged restaurant offering a full menu and doesn’t share space with any other store.
These types of outlets are much more prominent in size, sometimes two-storey buildings, with a good sitting space. As a result, the investment required to own a traditional Burger King Franchise in USA is much higher than that of non-traditional outlets.
Non-Traditional Facility
Non-traditional facilities do not require big spaces to operate. These types of stores are often seen at petrol stations or retail markets. The franchisor offers 6 types of non-traditional facilities:
- Big Box (Located in Big box retail stores)
- Food Court (Located in Shopping malls)
- Co-Brand (Shares location with other restaurants)
- Modular Retail System (Limited Spacing with limited menu)
- End-Cap
- In-line
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Cost
Starting a Burger King Franchise In USA requires hefty initial investments. You must have a net worth of $15,00,000 before applying for a Burger King Franchise. Here’s a table of financial requirements needed to start a Burger King franchise:
| Requirements | Amount |
| Liquid Cash Requirements | $500,00 |
| Franchise Fees | $50,000 |
| Net Worth | $15,00,000 |
| Total Investment | $323,100 – $3,076,600 |
Apart from the financial requirements, the total cost to own a Burger king Franchise in USA is estimated between $323,100 – $3,076,600. That’s quite expensive; however, the company’s goodwill and brand reputation will allow you to cover the entire cost in a few years.
Here’s a breakdown of the total estimated investment/cost required to own a Burger King Franchise:
| Expenses | Minimum | Maximum |
| Franchise Fee | $15,000 | $50,000 |
| Real Property/ Occupancy Charge | $90,000 | $850,000 |
| Travel and Living Expenses while Training | $0 | $25,000 |
| Zoning Expenses | $1,000 | $25,000 |
| Civil & Architectural Drawings / Professional Fees | $10,000 | $45,000 |
| Improvements / Construction | $25,000 | $950,000 |
| Landscaping | – | $60,000 |
| Decor Package | $0 | $88,000 |
| Equipment | $84,600 | $294,600 |
| Pre-Opening Wages | $28,000 | $61,000 |
| Signage & Drive-Thru | $3,000 | $166,000 |
| Opening Inventory | $2,500 | $12,000 |
| Insurance | $8,000 | $25,000 |
| Cash and Inventory Control System | $35,000 | $60,000 |
| Working Capital / Additional Funds | $15,000 | $90,000 |
| 2-Story Interior Playground | N/A | $245,000 |
| Business Licenses, Lease Deposits, Utility Deposits, and Payments | $6,000 | $30,000 |
| Estimated Total Investment* | $323,100 | $3,076,600 |
While these figures are the estimated cost required to start a new Burger king franchise in USA, there are some fees to consider too. Here’s a detailed overview of ongoing fees:
| Fees Type | Amount |
| Royalty | 4.5% of monthly gross sales. |
| Building Improvement Payments (certain BKLs only) | $500 per month. |
| Advertising | 4.5% of monthly gross sales. |
| Rent (where the property is leased from the franchisor) | Varies |
| Late charges/ Interest/ Stamp tax | Lesser of 18% per annum |
| Application Fee | $250 – $5,000 |
| Transfer of Interests | $2,000 |
| New Franchisee Training Fee | $2,500 |
| Franchise Extension Fee | $2,500 annually |
| Entity or LLC Fees | Up to $5,000 per Entity; additionally, up to $1,000 per restaurant transferred to Entity or LLC. |
| Sales Transfer Study | $5,000 – $8,000 Per Outlet |
| Investment Spending (marketing) | Varies |
| Gift Card Services | Varies |
| Sales Impact Contribution | Varies |
| Digital Fee | $25 per screen per month |
| BK GURU / Daily Planner Subscription Fee | $560 annually |
| Miscellaneous Reimbursements, Purchases, Services | Varies |
| Site Re-approval Fees | $5,000 |
| One Time Cure Fee | Varies |
| Follow Up Walk-Thru | $1,500 |
| Remodel Default Payments | Monthly amount equal to $4,000 * the number of Restaurant remodels |
| Deferred Remodel Default Payments | Royalty fee increases to 6% from the remodel due date until the date the franchisor confirms that the remodel meeting specifications are complete. |
| Indemnity | Varies |
| Audit Expenses | Varies |
| Background Check Fee | $3,800 – $8,000 |
| Costs and Attorneys’ Fees | Varies |
| BK McLamore Foundation Scholarship | $1,000 per outlet annually |
Type Of Franchise Agreement to Choose
Burger King offers three different types of franchise agreements to choose from. The company caters to the needs of every entrepreneur, whether they’re an individual, an entity or a corporate.
Here’s an overview of franchise agreements offered by Burger King:
Individual
In this agreement type, ownership is transferred to an individual solely responsible for the outlet’s operations.
Entity
In an entity agreement, ownership is transferred to the corporation, limited liability partnership, limited partnership or limited liability company.
Corporate
This ownership often has food service corporations that create contracts with considerable net worth companies with diversified business ownership.
Application Process
The application process at Burger king is relatively straightforward. You can apply for a Burger King franchise in 5 simple steps:
Fill Application Form
The application for opening a Burger King franchise starts with filling out and submitting an application form. Submit the required information, and you will be contacted by the franchisor team if there’s an opportunity.
Attend The Introductory Meeting
If your application gets selected, you’ll receive a call from the team. But, first, attend the introductory meeting with the team, where applicants can meet the team and get answers to their queries.
Leadership Introduction
The company will host the applicant at its Miami headquarters for a discovery day with leadership.
Set Up Operations Plan
The franchisor team will connect and join with the franchise owner and help them build a plan for setting up their organisation. In addition, the team will work with the team to ensure smooth operations.
Final Approval
After receiving the final leadership approval, the team and the franchise will find the best opportunity to enter the Burger King system. After getting full approval, you can start training with the team.
Start Training
The company offers on-job training to franchise members. You can start a training program as soon as you get the final approval and sign the contract.
Average Earning
A Burger King franchise averagely makes around $1.4 million in sales, with a system-wide sale crossing the $10 billion mark. In terms of annual sales, the company stands at number 4, trailing behind McDonald’s.
For a single franchise, an owner usually profits with 6% of net revenue, which is around $85,000. That’s not a bad profit for managing a single franchise. However, that’s just the average figures; actual sale figures may vary depending on various factors, like location.
If your franchise is located in an area with a heavy traffic load, you might miss out on customers. So, choosing the right location is crucial to the success of your franchise.
Advantages Of Opening
Burger King has been providing franchisees with a strong business model, innovation and growth at its core since the time it has been franchising. You can enjoy various advantages and privileges while being a member of the Burger King family.
Here are some advantages and reasons why investing in a Burger king franchise in USA is a good idea:
Brand Strength
As the largest QSR chain in the world, Burger King has a strong brand strength and presence in all major countries across the globe. In addition, the company continue to grow across the U.S. and international markets.
Superior Guest Experience
The company puts its customers first. This means constantly focusing on improving and providing a superior experience to the customers.
Franchisee Engagement
The franchisor is committed to driving growth and profitability for the brand by collaborating with franchisees and its owners.
Quality Food & Beverages
The company aims to provide the best-in-class food and beverage quality, taste, innovation, and value offerings.
World-Class Support
The fast food giant has been franchising for nearly six decades, and its expertise in the food industry goes into supporting its franchisees.
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Additional Benefits
You can enjoy many more benefits as a Burger King franchise owner. These benefits include:
- Receiving training and gaining access to know-how across all aspects of the business
- Built-in franchise support for ongoing operations
- Multiple funding sources are available
- Over 7,000 outlets across the U.S. with significant opportunities for growth
- Support by Restaurant Brands International
Conclusion
It’s never easy to start a franchise in the quick-service restaurant industry. There are several factors to consider, including the startup costs and growing rivalry from other fast-food restaurants. However, once you have decided to open a Burger King franchise, it might prove to be a profitable deal.
In addition to providing you and your staff with training, tools, equipment, and designers for your first franchise location, Burger King has RBI resources. Additionally, you can independently operate it, but only to a certain level because there are specific regulations that apply to all franchises.
Despite the difficulties, Burger King is still one of the world’s most well-known fast food restaurants after McDonald’s. Also, there is some extra reassurance in the franchise’s long-term performance because they are among the top 6 quick-service restaurants.
FAQ’s
What Are The Minimum Financial Requirements For Owning A Burger King Franchise in the USA?
The minimum financial requirements for owning a new Franchisee is $500,000 in liquid assets and a total net worth of at least $1,000,000.
How Much Is A Burger King Franchise In USA?
The estimated cost to own a Burger King franchise in USA is between $316,100 and $2,660,600.
How Many Burger King Franchises In The US?
There are about 7,257 Burger King franchises in the United States as of August 16, 2022.
Is Burger King An American Franchise?
Yes, Burger King (BK) is a US-based multinational chain of hamburger fast-food restaurants. The restaurant was founded in 1953 and was named Insta-Burger King, a Jacksonville, Florida–based restaurant chain. And today, it has headquarters in Miami-Dade County, Florida.
Is Owning A Burger King Franchise Profitable?
Fortunately, popular restaurants like Burger King generate enough revenue to cover their initial investment. For example, the average Burger King franchise generates around $1.4 million in revenue, with franchise profit estimated at a whopping $85,000 annually.
Which US State Has The Most Burger King Franchises?
Most Burger King outlets are in the state of Florida
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