Burger King Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$232,000

-

$4,521,000

OPERATING PROFIT

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Emily

Updated

January 31, 2024

Is

Burger King

a franchise?

Yes,
Burger King
is a franchise and
currently
accepts
franchise
applications

Burger King, established in 1954, has been a prominent name in the fast food industry, known for its iconic Whopper® among other menu items. The brand embarked on its franchising journey in 1959 and is headquartered in Miami, Florida. The franchise operates under Burger King Corporation, a wholly-owned indirect subsidiary of Restaurant Brands International Limited Partnership.

Significant developments in Burger King's franchising model include a restructuring in 1978 under the guidance of a former McDonald's executive, Donald N. Smith. This restructuring aimed to standardize operations and ensure quality control, leading to restrictions on franchise ownership to maintain proximity to the restaurants and prevent larger franchises from challenging the brand.

Burger King's franchising opportunities vary, including traditional standalone restaurants, non-traditional facilities located within other businesses, institutional locations, and delivery-only outlets. The typical franchise agreement for a freestanding restaurant lasts 20 years, with specific conditions for renewal based on compliance with the franchisor's standards and agreements.

How many

Burger King

franchises

are there?

In 2022, there were
7105
outlets in the United States, of which
7054
are franchises, and
51
are corporate-owned.

What are the

Burger King

franchise

fees?

Initial franchise fee

$50,000

Royalty fee

4.5%

Advertising fee

4.0%

Initial Franchise Fee ($50,000)

The initial franchise fee for a standard 20-year Franchise Agreement with Burger King is $50,000. This fee is prorated for different agreement durations, especially for non-traditional restaurants. For instance, a Delivery Restaurant has a franchise fee of $2,500. This fee is fully earned upon signing the Franchise Agreement and is non-refundable.

Royalty Fee (4.5% of monthly Gross Sales)

A royalty fee of 4.5% of the monthly Gross Sales is payable once your Burger King outlet is operational. This fee is a continuous commitment and is crucial for maintaining the franchise rights and receiving ongoing support from the franchisor.

Advertising (4.0% of monthly Gross Sales)

Burger King franchises are required to contribute 4.0% of their monthly Gross Sales towards advertising to maintain a strong brand presence in the market, driving more traffic to your restaurant.

Rent (Varies)

If the property is leased from Burger King, the rent is payable monthly, with the base rent due in advance on the 1st day of each month. The exact amount varies and is agreed upon in the lease agreement.

Transfer of Interests Fee ($2,000 for the first Restaurant and $500 for each additional Restaurant)

Upon the sale of a franchise or other transfer, a transfer of interests fee is applicable. This fee is payable on the sale of the franchise or other transfer.

Miscellaneous Reimbursements, Purchases, Services (Varies, typically up to $25,000 per person depending on course, material, and travel expenses)

For certain training programs provided by Burger King, there may be additional costs which are agreed upon separately.

Follow Up Walk-Thru Fee ($1,500)

A follow-up walk-thru fee is charged on demand to ensure that the franchise is adhering to the standards set by Burger King.

How much does

it cost

to start a

Burger King

franchise?

It costs between
$232,000
and
$4,521,000
to start a
Burger King
franchise.
Type of Expenditure Estimated Range
Franchise Fee $50,000
Training and Travel and Living Expenses $7,500 - $25,000
Real Property / Occupancy Charge $300,000 - $1,500,000
Civil & Architectural Drawings / Professional Fees $20,000 - $100,000
Zoning Expenses $5,000 - $25,000
Improvements / Construction $900,000 - $1,600,000
Landscaping $25,000 - $60,000
Equipment $199,600 - $304,600
Décor Package $45,000 - $95,000
Signage & Drive Thru $86,000 - $186,000
Pre-Opening Wages $67,100 - $72,500
Opening Inventory $6,400 - $12,800
Cash, Inventory Control and Order Taking System $35,000 - $100,000
Insurance $14,000 - $25,000
Working Capital / Additional Funds $45,000 - $90,000
Business Licenses, Utility Deposits, Lease Deposits and Payments $10,000 - $30,000
2-Story Interior Playground $0 - $245,000
Total Estimated Initial Investment $1,815,600 - $4,520,900

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Does

Burger King

provide

training

to its

franchisees?

Yes,
Burger King
provides training to its franchisees.

Burger King has a well-structured training program for its franchisees to ensure they are well-prepared to operate their franchises effectively.

This program is held in Miami, Florida, or other specified locations, and includes in-restaurant training at various authorized Training Restaurants.

The training program covers various aspects including operational techniques, using required equipment and computer hardware and software, and maintaining the Burger King operational standards.

The training program has a fee of $7,500 for the first person and $3,000 for each additional person attending the required training before the opening of the restaurant. Franchisees are responsible for all costs related to the training program including travel and living expenses, wages, and insurance.

Does

Burger King

provides

territory

protection?

Franchisees have the opportunity to open multiple Burger King Restaurants within a defined area referred to as a "Territory" under an Area Development Agreement. Within this Territory, they are obligated to develop Franchised Restaurants.

However, the Territory does not guarantee exclusivity. Specifically, franchisees have no express or implied territorial rights in any area to develop Burger King restaurants. Burger King Corporation (BKC) retains the unconditional right to directly or indirectly develop, establish, and/or approve a franchisee to develop Burger King restaurants both within and outside of the designated Target Areas.

Can a

Burger King

franchise

be run as

a passive

investment?

Burger King requires active involvement from the franchisee or a designated manager in the day-to-day operations of the restaurant.

One of the conditions for entity ownership is that one or more individuals or entities, designated as "Owners," guarantee and are responsible for the franchisee's obligations.

One of these Owners must be designated as the "Managing Owner" to ensure the franchisee's compliance with the franchise agreement.

Additionally, a "Managing Director" must be designated to be responsible for restaurant operations. This individual must be approved by Burger King and is subject to a credit and background check.

If there are six or fewer restaurants owned under the entity structure, generally, the Managing Director and the Managing Owner of the franchisee must be the same person.

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