How much does it cost to open a Burger franchise?
The Burgers category has a wide variety of franchise investment options.
You can find a Burger franchise to fit any budget. As an example, the smallest investment opportunity is $96,414. The largest investment opportunity is $4,652,000.
There are 32 franchise systems, representing 98,543 locations. The largest franchise has 13,145 outlets and the smallest has 0.
How do I find the best Burger franchise?
You need to understand the risk factors of any franchise investment. Here at FranchiseGrade.com we study over 2,500+ franchise opportunities and compare and grade each for their investment risk.
When looking at a Burger franchise, consider the following:
1. What are the franchise fees?
Within the Burgers category, franchise fees can range from $0 to $70,000.
We go into more details about franchise fees, annualized costs, working capital requirements, leasehold improvement costs and cash required in our Investment Structure Grade.
2. What are the royalty fees?
Within the Burgers category, royalty rates can range from 3% to 6%.
We dig deeper into royalties, advertising and coop rates, technology and extra fees in our Ongoing Fee Grade.
3. Are there any lawsuits?
Within the Burgers category, there are a number of franchises that do have some form of litigation. These systems can range from a high of 43 to a low of 0.
We look deeper into the types of lawsuits, franchisee representation and legal rights of franchisees in our Franchise Relations Grade.
4. What is the initial term of the agreement?
Within the Burgers category, each franchise can offer a different term length. As an example the shortest initial term is 10 months, and the longest initial term is 20 months.
We dig deeper into the initial term, annualized cost, renewal terms, territory rights, training and financing options within our Franchisee Rights Grade.
5. What is the franchisee turnover rate?
Franchisee turnover is a key variable to the success of a franchise investment. Franchisee turnover ranges significantly in Burgers. The highest turnover of a franchise system in this sector is 40% and the lowest is 0%.
We dig deeper into turnover and look at the number of transfers, terminations, non-renewals, reacquired and ceased operations of each franchise system within our System Turnover Grade.
6. How much growth and success has a franchise system had?
A growing system is a sign of a healthy investment opportunity. Growth rates can be very high if a smaller system grows from 5 to 20 outlets compared to another system that has grown from 250 to 300. Also a number of franchise systems in Burgers have negative growth, or have shrunk in size. The largest growth rate is 1050% and the worst growth rate is -33%.
We dig deeper into growth and look at net growth, if it’s consistent, how many has the franchise system sold but no opened and their projections for next year in our System Growth Grade.
7. Do they provide any financial information about their franchisees?
Franchise systems are not required to disclose financial performance information of their franchisees to you. In the Burgers category, only 63% disclose any type of financial information. Some franchise systems only provide a small amount of revenue data (not expenses) and only a few healthy franchise systems will provide expense data. Within the Burgers category, only 38% disclose expense data for you to study the costs of running the business.
We dig deeper into financial transparency, compare the value of the information and highlight the benefits and qualities of each value in our Item 19 Disclosure Grade.
What are the top Burgers franchises?
The top Burger investment opportunities will have a good investment structure, reasonable ongoing fees, healthy franchise relations, beneficial franchisee rights, low outlet turnover, quality outlet growth, and valuable financial transparency.
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