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Burger King Franchises Make $1.2M Sales (+ Costs & Profits 2022)

Undeniably one of the most famous fast food brand worldwide, Burger King has over 7,000 restaurants in the US alone..! No wonder that Burger King is a very popular franchise among entrepreneurs and franchisees alike.

Yet, is this really a profitable business? With an average investment of $1,242,950, do the profits justify the upfront cost?

In this article we’re looking at Burger King and its franchises using the data available in their latest Franchise Disclosure Document. We’ll see how much you can realistically make with a Burger King franchise, how profitable it really is. Finally we’ll see whether you should invest in this business. Let’s find out!

Burger King: fees, revenues and profits

Franchise fee$50,000
Royalty fee4.5%
Marketing fee4.0%
Investment (mid-point)$1,242,950
Average annual sales$1,215,970
Investment to sales ratio1.0x
Investment payback*6.8 years (mediocre)
Minimum net worth$1,500,000
Minimum liquid capital$500,000
* using 15% net profit margin

🔎 How does Burger King compare vs. other franchises? Check the ranking

Burger King: a brief introduction

Burger King is a leading American multinational fast-food chain restaurant known for its signature hamburger and related fast food treats.

the chain was founded in 1953 in Jacksonville, Florida, by Keith J. Kramer and his wife’s uncle Matthew Burns, then known as Insta-Burger King.

The chain store serves hamburgers, French fries, soft drinks, milkshakes, and desserts. Additionally, it offers whopping chicken sandwiches, non-beef items such as chicken and fish, and vegetarian offerings, including salads and meatless sandwiches.

Burger King started franchising in 1954 under the Burger King Corporation, headquartered in Miami, Florida.Today, it has more than 19,250 units in over 100 countries worldwide, including 7,000 in the US alone.

Burger King franchise: pros and cons

There are advantages and disadvantages to operating a Burger King franchise.

Pros

  • Quality foods: Burger King emphasizes offering quality and excellent products. Through innovation and maintaining strict standards, would-be franchisees can continue offering tasty and best-value foods and beverages as engineered by the parent company.
  • Brand strength: Burger King is a well-known brand. Today it is the second-largest fast-food chain in the hamburger industry. The brand has grown in the US and internationally, allowing new franchisees to operate a strong brand with great customer loyalty.
  • World-class support: The restaurant has solid experience and expertise in burgers, having operated and excelled tremendously for more than 60 years. As a new franchise, the brand grants new franchisees valuable and extensive support in establishing and running their businesses successfully.
  • Solid franchisee engagement: Burger King works closely with its franchisees to provide them with a solid foundation for growth and profitability. This allows them to share the best management, operations, food production, and business ideas.
  • Wide range of franchise formats: Burger King offers franchisees a wide range of franchise facilities to choose from. It allows for individual, operator (owner), or entity ownership and gives franchisees the flexibility to operate a franchise as befits their fees and requirements.
  • Financial assistance. In the case where the franchisor owns or leases the location for the restaurant, it may lease or sublease it to the franchisees. In addition, Burger King may finance other franchisees’ transactions.

Cons

  • No exclusive territory: The franchisor grants or implies no exclusive protected territory or customer base. It grants the franchisee the right to operate at a specific location only, which leaves room for competitors to compete and affect the growth and profitability of its franchisees.
  • Competition: Burger King faces stiff competition from other world leaders such as KFC and McDonald’s. This affects new franchisees’ sales and profitability. Therefore, would-be franchisees need to invest more in marketing and advertising.
  • Not a passive investment: A Burger King franchise is not a good option for investors looking for a passive investment. Franchisees are required to be fully involved in the operations of their businesses. The franchisees’ training is also extensive and very demanding, leaving them with little time to pursue other investment opportunities.

How much does a Burger King franchise cost?

You must invest $1,242,950 on average to open a Burger King restaurant.

The amount mentioned above is an estimated average. It can vary depending on whether it is a traditional facility or a non-traditional facility:

  • Traditional restaurants are freestanding stores
  • Non-traditional restaurants are co-branding restaurants (coupled with another brand), those located in mall food courts, Big-box formats and delivery-only restaurants

For example, the investment amount for a Delivery Restaurant is 3x times lower than the average, whereas the investment for a free-standing restaurant is 2x times higher than the average.

Type of RestaurantLowestHighestAverage
Freestanding$1,790,800$4,194,700$2,992,750
Co-Brand$752,900$1,602,800$1,177,850
Mall Food Court$599,800$1,151,700$875,750
Big-Box$558,700$1,004,100$781,400
Delivery Restaurant$230,000$544,000$387,000
Total$1,242,950
Source: FDD 2022

In addition to the initial franchise fee of $50,000, the investment costs covers all types of expenses can be incurred when opening a fast-food restaurant.

For example, you would pay for training expenses, professional fees, construction, equipment, décor, signage & drive-thru, opening inventory, insurance, business licenses, utility deposits, lease deposits, and an additional funds as working capital of first 3 months, etc.

How much sales does a Burger King franchise make?

An average Burger King franchise makes $1,215,970 in sales per year. This is the average of Burger King franchises lowest and highest annual sales.

What’s interesting is that, unsurprisingly, traditional franchise restaurants have higher sales on average vs. non-traditional stores. Indeed, freestanding restaurants (traditional) are usually much bigger vs. non-traditional stores.

Source: 2022 FDD

How profitable is a Burger King franchise?

Unfortunately, Burger King doesn’t provide much information when it comes to costs and profits for its franchise restaurants in its Franchise Disclosure Document. Therefore, we have to estimate using industry averages from similar fast food restaurants.

We estimate that the average Burger King franchises makes $358,711 in profits per year. This represents an adjusted EBITDA margin of 30% of sales.

Keep in mind this isn’t net profit from which the franchisees pay themselves dividends. Instead, this is an adjusted EBITDA that includes COGS, labor costs, rent and royalty and marketing fees. Indeed, net profit is far more difficult to estimate as it includes other costs that aren’t related to the operations (like taxes, debt interest expenses, etc.).

Yet, the adjusted EBITDA margin of 30% is pretty much in line with other fast food franchises, actually slightly on the higher end (vs. 27-29%).

Profit-and-lossAmount ($)As % of sales
Sales$1,215,970100%
COGS$(303,993)25%*
Labor$(352,631)29%*
Rent$(97,278)8.5%
Royalty + marketing fees$(103,357)8.5%
Adjusted EBITDA$358,711~30%
* industry average

Is a Burger King franchise a good investment?

Even though $358,711 profits per year seems appealing, it doesn’t tell us much about whether you should invest in a Burger King franchise as a franchisee. Indeed, does the profits justify the upfront investment cost of $1,242,950?

In order to know whether this is a good investment, we need to look at the payback period: the number of years it takes for a franchisee to reimburse her/his original investment.

We found out that the payback period for a Burger King is 6.8 years on average, which frankly speaking isn’t great. As rule of thumb, for fast food franchises (relatively low risk businesses), we consider a payback period below 4 years to be good, and anything above 5 years mediocre.

Think about it, as a franchisee, you would need to wait about 7 years to start making a profit on your original investment, and that doesn’t even take into account the time value of money (which would easily add another year).

As such, opening a Burger King franchise isn’t the best investment from a financial standpoint. Yet finances shouldn’t be the only decision factor for you to choose a franchise. Brand recognition, eligibility criteria, support, etc. are all valid points to take into consideration too.

In addition to that, keep in mind the payback period is calculated based on the average of all franchise-owned restaurants, hence your franchise restaurant may be more profitable than the average.

Download the Burger King business plan and get your franchise funded

Including a 5-year financial plan built with the latest Franchise Disclosure Document numbers

How does it compare vs. other franchises?

FranchiseInvestment ($)Sales ($)S/I RatioPayback (years)Min. net worth ($)Min. liquid capital ($)
Chick-Fil-Ahttps://sharpsheets.io/blog/chick-fil-a-franchise-costs-profits/Chicken1,363,5104,227,4173.12.2--
Dunkin' Donutshttps://sharpsheets.io/blog/dunkin-donuts-franchise-costs-profits/Donuts779,0001,056,5211.44.9500,000250,000
Domino'shttps://sharpsheets.io/blog/dominos-franchise-profits-costs/Pizza398,7251,286,4283.23.9250,00075,000
Krispy Kremehttps://sharpsheets.io/blog/krispy-kreme-franchise-costs-profits/Donuts824,0003,400,0004.11.62,000,000300,000
Little Caesarshttps://sharpsheets.io/blog/little-caesars-franchise-costs-profits/Pizza1,022,850798,1130.88.5350,000150,000
Wingstophttps://sharpsheets.io/blog/wingstop-franchise-costs-profits/Chicken631,6951,460,4592.32.91,200,000600,000
Steak 'n Shakehttps://sharpsheets.io/blog/steak-n-shake-franchise-costs-profits/Burger, Milshakes815,6261,346,3321.74.01,500,000500,000
Crumbl Cookieshttps://sharpsheets.io/blog/crumbl-cookie-franchise-cost-profits/Sweets507,2241,582,0903.12.1300,000150,000
Taco Bellhttps://sharpsheets.io/blog/taco-bell-franchise-costs-profits/Mexican462,4131,650,0003.61.91,500,000750,000
Popeyeshttps://sharpsheets.io/blog/popeyes-franchise-costs-profits/Chicken1,095,7831,444,6171.35.11,000,000500,000
Smoothie Kinghttps://sharpsheets.io/blog/smoothie-king-franchise-costs-profits/Smoothie688,108573,2690.88.0300,000100,000
Jersey Mike'shttps://sharpsheets.io/blog/jersey-mikes-franchise-costs-profits/Sandwich574,3231,220,5862.14.7300,000100,000
Nothing Bundt Cakeshttps://sharpsheets.io/blog/nothing-bundt-cakes-franchise-costs-profits/Sweets538,6501,307,2802.42.7600,000150,000
Jimmy John'shttps://sharpsheets.io/blog/jimmy-johns-franchise-costs-profits/Sandwich513,650874,8451.73.9300,00080,000
Texas Roadhousehttps://sharpsheets.io/blog/texas-roadhouse-franchise-costs-profits/Steakhouse4,209,5002,955,5340.79.5n.a.200,000
Kung Fu Teahttps://sharpsheets.io/blog/kung-fu-tea-franchise-costs-profits/Bubble tea250,125353,2371.44.7n.a.25,000
Wendy’shttps://sharpsheets.io/blog/wendys-franchise-cost-profits/Burger1,374,8331,791,2311.35.11,000,000500,000
Burger Kinghttps://sharpsheets.io/blog/burger-king-franchise-costs-profits/Burger1,242,9501,215,9701.06.81,500,000500,000
Sonic Drive-Inhttps://sharpsheets.io/blog/sonic-drive-in-franchise-costs-profits/Burger1,467,0831,617,0001.16.01,000,000500,000
Panera Breadhttps://sharpsheets.io/blog/panera-bread-franchise-costs-profits/Sandwich2,290,5002,599,4321.15.97,500,0003,000,000
Pizza Huthttps://sharpsheets.io/blog/pizza-hut-franchise-costs-profits/Pizza935,575906,9111.06.9700,000350,000
KFChttps://sharpsheets.io/blog/kfc-franchise-costs-profits/Chicken1,802,0501,567,4740.97.71,500,000750,000
Arby’shttps://sharpsheets.io/blog/arbys-franchise-costs-profits/Sandwich1,184,9751,126,2631.07.01,000,000500,000
Dairy Queenhttps://sharpsheets.io/blog/dairy-queen-franchise-costs-profits/Ice Cream1,404,2201,143,1800.88.2750,000400,000
Jack in the Boxhttps://sharpsheets.io/blog/jack-in-the-box-franchise-costs-profits/Burger2,195,8001,755,5030.812.51,000,000250,000
Papa John’shttps://sharpsheets.io/blog/papa-johns-franchise-costs-profits/Pizza353,6951,101,1273.12.1750,000250,000
Zaxby’shttps://sharpsheets.io/blog/zaxbys-franchise-costs-profits/Chicken534,7502,229,1874.22.41,000,000500,000
Hardee’shttps://sharpsheets.io/blog/hardees-franchise-costs-profits/Burger1,759,0001,147,9750.710.21,000,000300,000
Culver’shttps://sharpsheets.io/blog/culvers-franchise-costs-profits/Burger4,044,5003,051,7620.88.82,000,000350,000
Five Guyshttps://sharpsheets.io/blog/five-guys-franchise-costs-profits/Burger511,2251,203,3662.42.8500,000250,000
Carl’s Jr.https://sharpsheets.io/blog/carls-jr-franchise-costs-profits/Burger1,860,3351,419,5160.88.71,000,000500,000
Baskin-Robbinshttps://sharpsheets.io/blog/baskin-robbins-franchise-costs-profits/Ice Cream465,100316,8150.79.8250,000125,000
IHOPhttps://sharpsheets.io/blog/ihop-franchise-costs-profits/Pancakes2,058,3021,553,3110.88.81,500,000500,000
Applebee’shttps://sharpsheets.io/blog/applebees-franchise-costs-profits/Casual American5,137,9662,356,9650.514.51,000,000500,000
Denny'shttps://sharpsheets.io/blog/dennys-franchise-costs-profits/Casual American3,785,4591,639,5490.415.41,000,000500,000
Papa Murphy'shttps://sharpsheets.io/blog/papa-murphys-franchise-costs-profits/Pizza433,174580,4411.35.0275,000125,000
Auntie Anne'shttps://sharpsheets.io/blog/auntie-annes-franchise-costs-profits/Pretzels229,692343,1351.55.6300,000100,000
Firehouse Subshttps://sharpsheets.io/blog/firehouse-subs-franchise-costs-profits/Sandwich613,186888,3561.44.6350,000100,000
Tropical Smoothie Cafehttps://sharpsheets.io/blog/tropical-smoothie-cafe-franchise-costs-profits/Smoothie430,500961,9692.23.0350,000125,000
Marco’s Pizzahttps://sharpsheets.io/blog/marcos-pizza-franchises-costs-profits/Pizza437,625895,5232.03.3400,000100,000
Cinnabonhttps://sharpsheets.io/blog/cinnabon-franchises-costs-profits/Sweets276,062394,8971.45.8300,000120,000
Cold Stone Creameryhttps://sharpsheets.io/blog/cold-stone-creamery-franchise-costs-profits/Ice Cream310,956417,5881.35.0250,000100,000
Jambahttps://sharpsheets.io/blog/jamba-franchise-costs-profits/Smoothie414,562597,0281.47.7300,000100,000
Church’s Chickenhttps://sharpsheets.io/blog/churchs-texas-chicken-fees-sales-costs/Chicken1,195,1471,395,0881.25.71,000,000300,000
Moe’s Southwest Grillhttps://sharpsheets.io/blog/moes-southwest-grill-franchises-costs-profits/Mexican792,3701,013,3611.35.21,000,000100,000
Tim Hortonshttps://sharpsheets.io/blog/tim-hortons-franchises-costs-profits/Coffee1,242,7501,188,2401.07.0500,000100,000
Checkers & Rally'shttps://sharpsheets.io/blog/checkers-franchises-profits-sales-costs/Burger837,8471,039,7731.25.4750,000250,000
Charleys Philly Steakshttps://sharpsheets.io/blog/charleys-philly-steaks-costs-profits/Sandwich509,806786,2331.54.3500,000100,000
Buffalo Wild Wingshttps://sharpsheets.io/blog/buffalo-wild-wings-costs-profits/Chicken3,546,9002,534,1480.79.31,500,000750,000
Rita's Icehttps://sharpsheets.io/blog/ritas-ice-franchise-costs-profits/Ice Cream215,839248,3401.25.8300,000100,000
A&W Restaurantshttps://sharpsheets.io/blog/aw-restaurants-franchises-costs-profits/Burger786,750851,2121.16.2350,000150,000
Hungry Howie’s Pizzahttps://sharpsheets.io/blog/hungry-howies-pizza-franchise-costs-profits/Pizza419,682806,8991.93.5750,000200,000
Bojangleshttps://sharpsheets.io/blog/bojangles-franchise-costs-profits/Chicken1,658,0001,801,0571.16.11,000,000500,000
McAlister’s Delihttps://sharpsheets.io/blog/mcalister-deli-franchise-costs-profits/Sandwich1,424,9631,865,8611.35.11,000,000500,000
Round Table Pizzahttps://sharpsheets.io/blog/round-table-pizza-franchise-costs-profits/Pizza783,2501,037,8161.35.0500,000200,000
Qdoba Mexican Eatshttps://sharpsheets.io/blog/qdoba-mexican-eats-franchise-costs-profits/Mexican659,250972,9621.54.5
Freddy’shttps://sharpsheets.io/blog/freddys-franchise-costs-profits/Burger1,453,0401,792,9291.25.41,000,000400,000
Taco John’shttps://sharpsheets.io/blog/taco-johns-franchise-costs-profits/Mexican1,119,0001,124,9801.06.61,000,000400,000
Scooter’s Coffeehttps://sharpsheets.io/blog/scooters-coffee-franchise-costs-profits/Coffee1,143,250797,1010.79.6500,000200,000
Einstein Bros. Bagelshttps://sharpsheets.io/blog/einstein-bros-bagels-franchise-costs-profits/Sandwich750,075885,0111.25.71,000,000536,500
Great American Cookieshttps://sharpsheets.io/blog/great-american-cookies-franchise-costs-profits/Sweets385,275452,7711.25.7250,000100,000
Wienerschnitzelhttps://sharpsheets.io/blog/wienerschnitzel-franchise-costs-profits/Hot dogs873,300880,9801.06.6600,000250,000
Blaze Pizzahttps://sharpsheets.io/blog/blaze-pizza-franchise-costs-profits/Pizza865,4501,096,4321.37.9500,000300,000
Wetzel's Pretzelshttps://sharpsheets.io/blog/wetzels-pretzels-franchise-costs-profits/Pretzels377,571748,8572.03.4300,00050,000
Pizza Ranchhttps://sharpsheets.io/blog/pizza-ranch-franchise-costs-profits/Pizza3,268,3001,174,0880.418.61,000,000297,000
Del Tacohttps://sharpsheets.io/blog/del-taco-franchise-costs-profits/Mexican1,406,8501,345,3411.07.02,000,000500,000
Schlotzsky’shttps://sharpsheets.io/blog/schlotzskys-franchises-costs-profits/Healthy, Salads1,102,9331,053,3330.322.21,000,000300,000
Captain D’shttps://sharpsheets.io/blog/captain-ds-franchise-profits-costs/Seafood982,7781,067,8160.419.01,000,000350,000
Biggby Coffeehttps://sharpsheets.io/blog/biggby-coffee-franchise-profits-costs/Coffee310,575648,3520.320.0300,000100,000
Which Wichhttps://sharpsheets.io/blog/which-wich-franchises-profits-costs/Sandwich330,375281,8860.322.2500,000150,000
Marble Slab Creameryhttps://sharpsheets.io/blog/marble-slab-franchises-costs-profits/Ice Cream407,360251,0520.416.7250,000100,000
Mountain Mike's Pizzahttps://sharpsheets.io/blog/mountain-mikes-franchise-profits-costs/Pizza410,900865,7130.320.0300,000100,000
Huddle Househttps://sharpsheets.io/blog/huddle-house-franchise-cost-profits/Diner988,743712,4280.513.3600,000300,000
L&L Hawaiian Barbecuehttps://sharpsheets.io/blog/ll-hawaiian-barbecue-franchises-costs-profits/BBQ334,350612,9210.333.3500,000150,000
Chicken Salad Chickhttps://sharpsheets.io/blog/chicken-salad-chick-franchises-costs-profits/Healthy, Salads651,0001,202,0200.320.0750,000250,000
Golden Chickhttps://sharpsheets.io/blog/golden-chick-franchises-costs-profits/Chicken362,975917,6092.52.62,000,000425,000
Perkinshttps://sharpsheets.io/blog/perkins-franchise-costs-profits/Diner1,922,7281,729,2460.97.41,500,000500,000
Waba Grillhttps://sharpsheets.io/blog/waba-grill-franchises-costs-profits/Teryaki454,000466,5361.06.51,000,000250,000
Bruster’s Ice Creamhttps://sharpsheets.io/blog/brusters-franchises-profits-costs/Ice Cream663,925466,6960.79.5375,000150,000