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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.

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Dog Training Elite

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Dog Training Elite Northeast Houston Celebrates Transformative Role of Service Dogs in the Lives of People With PTSD

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Children's Lighthouse

Hospitality to Quality Child Care: Why Alexis Legg is Expanding Her Children's Lighthouse Footprint

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Smart Business, Low Overhead: How Pet Wants Helps Franchisees Build Efficient and Profitable Operations

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Pigtails & Crewcuts

Why These Franchisees Chose To Grow With Pigtails & Crewcuts — and How the Brand Helped Them Do It

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Fresh Coat

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Fresh Coat Cares Partners With the Red Cross to Refresh Community Conference Space

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Is a Fast Food Franchise a Good Investment?

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