In 1954, James McLamore and David Edgerton opened up their first Burger King restaurant in Miami, Florida, selling just hamburgers and milkshakes. Today, with a much expanded menu that includes breakfast items and salads, the company has more than 11,400 restaurants around the world. Roughly 10,400 of these are franchises, operating in over 60 countries, and serving 15.7 million customers every day. If you are interested in the food service industry, a Burger King franchise could be the way to go for you. But, there are some things you should know first.
In order to qualify to join this fast food giant, you need to have a net worth of $800,000, of which at least half must be liquid. Unless you meet that first requirement, the company will not even give your application a second glance. The actual initial franchise fee is $55,000, but the company wants to make sure it is getting into bed with someone solvent.
Once that is paid, a number of other costs creep into what will be your initial investment. From the signage (estimated to cost between $65,000 - $120,000), to the equipment and dining room ($330,000-$365,000), to the optional playground ($85,000), the company estimates that the total initial investment will add up to roughly $1,105,000. There is also the ongoing royalty fee of four percent, and another four percent towards a central advertising budget. At that price tag, you best be sure that the big Whopper is for you.
If you decide to make the commitment and buy a Burger King franchise, the good thing is that you will not be in it alone. With decades of experience in running a franchise system, the company has established a clearly defined system of support for franchise owners, both before you open and throughout the term of your contract.
The company provides all of managerial, technical, marketing, and operational training to new franchisees. By way of site selection, Burger King also has a comprehensive site of guidelines and specifications to help you choose a perfect location. With state of the art geographic mapping systems and market analysis, you should get started off on the right foot. They also have a field based real estate team to get you on your way.
With a $10 million annual marketing program and customized marketing plans, the company will help get people in your front door. And, despite the hefty fee they may take from you in the beginning, they do provide purchasing economies to reduce some of your operating costs.
There are significant costs of buying a Burger King franchise to be sure. But, if you’re looking at buying a fast food business, it deserves a second look. The company has been suffering declining sales, but in just the last few years, has turned things around. Last year, revenue rose to $1.5 billion in nine months, up five percent from the year before. It is also still ranked as one of the best brands in the industry. It remains a tough market, but this is one fast food giant that seems ready to take it on.
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