1851

Ask any person to name a single franchise business, and the first response will probably be a single name: <a href="https://www.mcdonalds.com/us/en-us/about-us/franchising/acquiring-franchising.html?utm_source=1851franchise.com&utm_medium=article&utm_campaign=is-a-fast-food-franchise-a-good-investment-2716257" target="_blank" rel="nofollow">McDonald’s</a>. Thanks to <a href="https://www.mcdonalds.com/us/en-us/about-us/our-history.html?utm_source=1851franchise.com&utm_medium=article&utm_campaign=is-a-fast-food-franchise-a-good-investment-2716257" target="_blank" rel="nofollow">Ray Kroc’s ingenuity and business savvy</a>, the terms “fast food” and “franchising” are practically synonymous. There’s a reason <a href="https://www.franchisedirect.com/top100globalfranchises/rankings?utm_source=1851franchise.com&utm_medium=article&utm_campaign=is-a-fast-food-franchise-a-good-investment-2716257" target="_blank" rel="nofollow">that 13 of the top 20 franchises</a> in the world are fast-food restaurants. The upside is huge.&nbsp;&nbsp;But it’s a crowded industry with <a href="https://1851franchise.com/whats-the-best-food-franchise-to-join-2715678">no shortage of investment opportunities</a>. There are <a href="https://www.ibisworld.com/industry-statistics/number-of-businesses/fast-food-restaurants-united-states/#:~:text=There%20are%20196%2C839%20Fast%20Food,over%20the%20past%205%20years%3F">about 196,000 quick-service restaurants in the U.S. alone</a>. The number of fast-food businesses in the U.S. fast-food has grown 1.1% per year on average over the five years between 2016 and 2021, and that includes a year of quarantines and restaurant lockdowns.&nbsp;<h4>The Lower the Risk, The Higher the Investment</h4>On average, franchise owners in the restaurant industry take home about $82,000 a year. However, the start-up cost can be anywhere between $100,000 and a million dollars.Additionally, there is risk in fast food franchise investment, and that risk is usually inverse to the investment cost. The lower the risk, the higher your buy-in. The startup costs for a McDonald’s, for example, are anywhere between $1.3 and $2.3 million. However, for that startup investment, you don’t just get another brand, but perhaps the most iconic brand ever, meaning there’s virtually no person on the planet who doesn’t know your brand. The money-making potential is huge.A <a href="https://www.chick-fil-a.com/franchise?utm_source=1851franchise.com&utm_medium=article&utm_campaign=is-a-fast-food-franchise-a-good-investment-2716257" target="_blank" rel="nofollow">Chick-Fil-A</a> franchise —&nbsp;another safe bet for the industry — generates $4.1 million on average annually with <a href="https://1851franchise.com/how-much-does-a-chick-fil-a-franchise-cost-2715278">an initial investment of $10,000</a>. The catch: Chick-fil-A charges a 15% royalty and takes 50% of all profits from franchisees, by far the steepest structure of any quick-service brand. <a href="https://www.wendys.com/franchise?utm_source=1851franchise.com&utm_medium=article&utm_campaign=is-a-fast-food-franchise-a-good-investment-2716257" target="_blank" rel="nofollow">Wendy’s</a>, on the other hand, requires franchisees to have a minimum net worth of $5 million with $2 million in liquid assets but charges them just a 4% royalty.&nbsp;<h4>Read the Franchise Disclosure Document</h4>Even if you have the money and expertise to open a franchise with one of the big players, it’s hard to predict whether you’re investing in the next big thing. There are ways you can mitigate the risk, though. Read the Franchise Disclosure Document carefully. Pay close <a href="https://1851franchise.com/how-to-make-sense-of-item-19-in-an-fdd-2714788">attention to Item 19</a>, which is the closest thing to a bottom-line return on investment you will find.However, it’s not a guarantee. Other factors like labor costs, availability of good territories and real estate costs will impact the return on investment for a fast-food franchise.&nbsp;&nbsp;See 1851 Franchise’s list of <a href="https://1851franchise.com/the-best-fast-food-franchises-to-buy-in-2021-2715143#stories">the best fast food franchises to buy in 2021</a>.

Is a Fast Food Franchise a Good Investment?

1851 Franchise

The pandemic was a tough year for restaurants, but fast-food restaurants are still a go-to for hungry entrepreneurs.

is-a-fast-food-franchise-a-good-investment

Strategic Franchising

The Biggest Benefits of Owning a Home-Based Franchise

the-benefits-of-owning-a-home-based-franchise

Minuteman Press International

Minuteman Press Franchise Owner Tim Lorman (right) accepts Top Overall Performance Award.

Minuteman Press Franchise Review: Tim Lorman Talks Career Change From Real Estate to Printing in Denver, CO

minuteman-press-franchise-review-from-real-estate-to-printing-in-denver-co

Shuckin' Shack

Photo of Shuckin' Shack team member and guests in restaurant

Shuckin’ Shack Oyster Bar Enters Q3 With 3 Openings on the Horizon, Growing Buzz Around Upcoming Fresh & Raw Tour

shuckin-shack-2025-growth

Pet Wants

The Power of Personalization: How Custom Nutrition Plans Drive Business Success at Pet Wants

the-power-of-personalization-how-custom-nutrition-plans-drive-business-success-at-pet-wants

Griswold

Griswold Franchisee Beth Copeland Featured in Entrepreneur Magazine

griswold-franchisee-beth-copeland-featured-in-entrepreneur-magazine

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Development Website Builder

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

Potbelly to be Acquired by RaceTrac in $566 Million Deal 

racetrac-acquires-potbelly-in-566-million-deal

Health Care Hiring Slowdown Highlights In-Home Care Franchise Opportunities - 1851 Franchise Agg

Health Care Hiring Slowdown Highlights In-Home Care Franchise Opportunities 

health-care-hiring-slowdown-in-home-care-franchise-opportunities

Caribou Coffee Names Scott Kennedy CEO, Eyes Continued Growth

caribou-coffee-names-scott-kennedy-ceo-eyes-continued-growth

McDonald’s Launches New Extra Value Meals as Consumer Demand for Value Continues to Climb

mcdonalds-launches-extra-value-meals

Power Eats: Smoothie King Rolls Out Food Nationwide To Fuel Franchise Growth

smoothie-king-food-menu-power-eats

Hardee’s Lawsuit Highlights the Risk of Going Off-Model in Franchising

hardees-franchise-lawsuit-paradigm-investment-group

Wendy's CEO Kirk Tanner Steps Down - Breaking News - 1851 Franchise

Wendy’s CEO Kirk Tanner Steps Down Amid Challenges, Leaving Franchisees Facing Uncertainty

wendys-ceo-transition-kirk-tanner-franchisee-uncertainty

"Come in, We're OPEN" sign against abstract background

Small Business Optimism Dips, Raising Concerns for Franchise Owners

small-business-optimism-dips-raising-concerns-for-franchise-owners

Mega Franchisee Sizzling Platter Acquired by Bain Capital

mega-franchisee-sizzling-platter-acquired-by-bain-capital

Hely and Hiral Patel Bring Their Longtime Dream to Life With The Brass Tap

brass-tap-franchise-pasadena-maryland-hely-hiral-patel

Franchisee spotlight graphic with photo of Ricki Oberoi and Layne's Chicken Fingers logo

Multi-Unit Wendy’s Operator Signs 12-Unit Deal With Layne’s Chicken Fingers

ricki-oberoi-laynes-chicken-fingers-growth

Cleaning Franchises Offer Stability and Scalability in a Changing Economic Landscape

cleaning-franchises-offer-stability-and-scalability-in-a-changing-economic-landscape

Is a Fast Food Franchise a Good Investment?

MORE STORIES LIKE THIS