Earn More Money, InvestingMarch 8, 2021April 5, 2021

Does A Burger King Franchise Stand Up To The Rest?

Within the past weeks, we’ve talked about various different franchises. Some are better than others. However, there are many different options. Some are better than others. However, much like McDonald’s, there is another fast-food giant out there that allows franchising. Who is it may ask? Well, the answer to that is in the title. Burger King. Burger King, much like McDonald’s, is a fast-food giant that operates all around the world. From east to west, there are thousands of Burger King franchises around the world.

Even if you’ve never eaten at Burger King before, I’m almost 100% sure that everyone reading this article has at least heard of Burger King before. With that being said, it’s only natural that we take a look into how much money you can make through a Burger King franchise. Of course, this article will be following the same format as the others. Therefore, we will be able to quickly and concisely go through the information needed in order for you to have a Burger King franchise. This means we will go through the qualifications, costs + fees, and how much you can earn from owning a Burger King franchise.

Qualifications

There are many different qualifications and prerequisites that need to be met when looking to own a franchise. I won’t be going through this in chronological order. Rather, I’ll shoot off a few things that you need to do in order to be qualified.

The first part that we’ll mention is the training. Before you get your franchise, you have to undergo multiple weeks of training. This training covers many different topics within the industry. However, the main goal is for you, the franchisee to know the ins and outs of the business. This means you will be able to know what needs to be done at all times. From cooking, the drive-thru, scheduling, payroll, and much more. The training length can range up to 15 weeks. However, this amount can vary depending on a multitude of factors. Regardless, you will have to go through months of training to become proficient.

Next on our list is your schedule or flexibility. Not only flexibility when you’re working but where you’re able to move to. You won’t always get the area or province/state your want. Therefore, you should be prepared and ready to move when the time comes. This is crucial as Burger King franchises usually go whether there is demand. They tend to not place franchises too close together. However, in areas that are densely populated, you’ll see them quite frequently. For example, there is a McDonalds or Burger King on practically every block within downtown NYC. This is due to the fact that it’s high traffic and extremely dense populated area. Therefore, they will still be able to earn a high amount of gross sales.

Next is that you should have a substantial amount of training prior to applying. Burger King does not just choose anyone who applies for a franchise. Burger King looks at various factors such as financial situation, credit scores, references, flexibility, and experience. Experience is most likely one of the biggest factors. This is due to the fact that any company, whether it’s McDonald’s or Burger King, will want their franchises to succeed. For that to be possible, they want to mitigate any sort of risk. By hiring someone who has a wealth of experience, they can avoid critical mistakes when having their business run by a franchisee.

Costs & Fees

Next are the cost and fees associated with owning/operating a Burger King franchise. Much like Burger King’s competition, there are many fees that need to be considered. For example, a staple within the franchise industry or what’s called franchising fee. A franchising fee is a one-time payment to the company to have the privilege of operating a franchise. It’s similar to a one-time payment when you sign up for a gym membership. However, much more expensive. This fee can cost anywhere between $15,000 – $50,000. This is a varying amount that depends on what the company deems should be the appropriate amount. However, there are other fees to take into accounts such as landscaping and equipment fees.

Above is a picture with a list of all potential costs that are associated with owning a Burger King franchise. The amount of the left is the lower end while the right is higher. As you can see, there is quite a range in cost. As you can see, on the lower end you can pay as low as $333,000. However, on the higher end, you can pay over $3,000,000. All the above amounts are in USD. Therefore, if you’re looking at this from a different country, you will need to adjust for your currency.

Lastly are the additional fees. This includes but is not limited to both advertising and royalties. In terms of these fees, Burger King is on par with other companies. This means that they charge 4% of monthly gross sales in advertising fees. Furthermore, they charge an additional 4.5% of monthly gross sales for royalties. Depending on your location and sales, this can be a huge chunk. However, if you’re making enough sales and mitigating costs, these fees shouldn’t hurt your income too much.

How Much Can You Earn?

Now, we will discuss how much you can potentially earn as a franchisee. In the past articles, we’ve mentioned how much money franchise owners take home. We’ve seen figures averaging out to approximately $150,000 per year (for the first few years). However, many of these numbers increase as the years go on. This is due to a few factors. First, as you gain more experience, you’ll learn to mitigate costs. Furthermore, once you’ve paid off your debt from your initial investment, you will be able to take home more money at the end of the year. However, there are a few important key points to remember. For the sake of this article, let’s say that a Burger King will cost you $1,800,000 as an initial investment. On average, Burger King has half the monthly sales as McDonald’s.

This means that not only will you be earning relatively less money, because of the lack of sales but due to the costs of the franchise. While Burger King has had the revenue of a McDonald’s, its costs are relatively the same. Therefore, in contrast, you will be earning less than franchises such as McDonald’s and KFC.

You’re probably wondering how much money you can actually earn from a Burger King franchise as a franchisee. The average Burger King franchisee will, on average, take home approximately $85,000 per year. However, this number can vary greatly. Depending on location and sales, you can either greatly exceed this amount or earn less. It is completely possible to earn as much or more than the average McDonald’s franchise. However, you would have to do what we stated above. That is to mitigate the amount of money your business spends. However, it is unlikely that you will lose money in the long run. This is due to the fact that Burger King still drives traffic. Furthermore, when you pay off your initial investment, you will be able to take home more money.

Shameed Chris Khan

Shameed is just a man on a mission to help those around him gain financial success. Obsessed with writing about all things finance, this GTA native is constantly learning and sharing his experiences with others.