Franchise Deep Dive: Burger King Franchise Costs, Fees, Profit and Data

The ‘Home of the Whopper’ offers a chance to join its 19,000-plus-unit network and run one of the world’s most beloved burger chains.

By Katie Porter1851 Franchise Contributor

Updated 10:10AM • 01/05/23

LAST UPDATED: December 16, 2022

FRANCHISE WEBSITE: https://franchising.bk.com/

NUMBER OF LOCATIONS: 19,200+

REPORTED COST TO GET IN: $220,000 – $3,398,600

ESTIMATED REVENUE: $175,630 per year (VettedBiz)

One of the largest quick-service brands in the world, Burger King has been a top choice in franchising for more than 60 years. Known for fresh burgers, fries and beverages served fast and at an affordable price, the chain has seen longstanding success in franchising in more than 100 countries. The concept’s main competitors in the space are McDonald’s, Wendy’s and A&W.

How Many Burger King Locations Are There?

Burger King has more than 19,200 franchise locations in over 100 counties. Vetted Biz data shows that there were 7,081 locations in the United States in 2020, with over 99% of the units owned by franchisees and only a couple dozen that are run by corporate.

What started out as Insta-Burger King in 1952 was soon rebranded to Burger King, and franchise opportunities were launched in 1959. Within a decade, the system had already grown to 350 locations and branched out to international opportunities. In recent years, the brand has seen an 8.2% increase in development efforts.

In 2019, the company announced plans to close approximately 250 units that were low-volume stores over the next few years. With the pandemic hitting the following year, 2020 closed with 265 fewer outlets open than at the start of January, VettedBiz reports. However, the brand categorized this as a restructuring strategy and doubled down on its goal to open another 20,000 restaurants in the next decade.

Over its six-decade-plus history, the franchise has switched ownership a number of times, purchased first by the Pillsbury Company, then changing hands to Diageo, Texas Pacific Group and eventually current parent company 3G Capital. In 2014, Burger King merged with Tim Hortons, a popular Canadian franchise, in a deal valued at $18 billion.

What is the Burger King Business Model?

The product served at Burger King is considered classic American fast food, including the famous Whopper quarter-pound burger, which is served with different variations depending on where the location is in the world. The company uses speed boilers and computer-based product monitoring systems to track the quality of products while getting orders out quickly.

Burger King locations can be found in various settings and types, from freestanding drive-thru locations to restaurants located within other retailers or buildings. The franchise breaks its many model options into two categories: traditional and non-traditional.

Traditional facilities are full-size self-contained restaurant locations. Non-traditional facilities include Burger King franchises that are located in a big-box retailer, gas station, or food court, locations that co-brand and share a building with another business, end-cap units, in-line units and institutional locations like schools, stadiums or airports.

How Much Can Burger King Franchise Owners Make?

The financial performance representations in Burger King’s 2020 Franchise Disclosure Document list the sales made by franchisees within their system from the period dating January 1, 2019, to December 31, 2019. In the document, volume is broken down by owners of traditional facilities and owners of non-traditional locations.

Average Annual Sales Distribution for Traditional Restaurants

High Annual Sales: $4,556,739
Low Annual Sales: $156,034
Mean Average Sales: $1,449,906
Median Sales: $1,389,935

Average Annual Sales Distribution for Non-Traditional Restaurants

High Annual Sales: $5,909,271
Low Annual Sales: $138,443
Mean Average Sales: $1,167,698
Median Sales: $1,057,843

With VettedBiz estimating that Burger King owners realize a 13% profit margin, this totals approximately $175,630 per year in revenue for the average franchisee. When calculated in comparison to the average capital spent to start, this leads to a 15-year timeline for return on investment.

How Much Does it Cost to Open a Burger King?

The total investment required to open a Burger King franchise location depends on the type of store the owner signs up for. The brand breaks down the various costs of traditional restaurants and the different kinds of non-traditional units in its 2020 FDD.

Traditional: $1,877,600 – $3,398,600
Non-Traditional:
- In-line/End-cap: $705,600 – $1,450,600
- Mall Food Court: $588,600 – $1,122,600
- Big-Box: $547,500 – $955,000
- Delivery: $220,000 – $475,000

The following costs are fees that are factored into the total initial investment to open a Burger King. These ranges include numbers from all store formats, traditional and non-traditional.

Construction/Improvements Fee: $0 – $1,200,000
Property/Occupancy Charge: $3,500 – $850,000
Architectural Fees: $0 – $60,000
Zoning Expenses: $0 – $25,000
Landscaping: $0 – $60,000
Equipment: $85,000 – $294,600
Decor/Signage: $0 – $261,000
Pre-opening wages and inventory: $30,000 – $73,000
Operating system: $35,000 – $110,000
Insurance: $14,000 – $25,000
Licensing: $10,000 – $30,000

Ongoing Costs and Fees include:

Royalty fee: 4.5% of monthly gross sales
Advertising: 4% of monthly gross sales

What is the Franchise Fee for Burger King?

Franchise fees for a Burger King unit also vary depending on the type of location the new owner plans to open. For all deals, this fee must be upfront to the franchisor.

Traditional: $50,000
Non-Traditional:
- In-line/End-cap: $25,000
- Mall Food Court: $15,000 – $25,000
- Big-Box: $25,000
- Delivery: $2,500

Who is the Leadership of Burger King?

What Helpful Articles Can I Read to Learn More About Burger King?

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