How To Buy a Fast-Food Franchise

With an estimated market size of a whopping $387.5 billion, fast food is an attractive investment option to many aspiring franchise owners. If that’s you, here are five steps you can take to buy your very own fast food business. 

Narrow Down Your Options

Fast food is a pretty expansive category, so it can be tough to decide on what brands to focus on. A good place to start would be to narrow down a specific category you would like to go into. From there, you should determine how much you are able to spend on your business. Here are a few financial insights into some of the top-performing fast-food franchises to get your started: 

Taco Bell

• Investment range: $227,500-$3,370,100
• Net worth requirement: around $1,500,000

Popeyes

• Investment range: $384,000-$3,700,000
• Net worth requirement: $1,000,000

Arby’s 

• Investment range: $644,950-$2,451,000
• Net worth requirement: $1,000,000

KFC

• Investment range: $1,900,00-$3,800,000
• Net worth requirement: $1,500,000
  
   

McDonald’s

• Investment range: $1,500,000-$2,500,000
• Net worth requirement: $500,000 available in liquid assets

However, these are just a handful of brands. If you’re not after a bigger player, there are emerging brands to choose from.

Choose Your Market

Although fast food can thrive in a wide range of locations, it's still important to evaluate your market. Some brands are more popular with certain demographics than others. For example, Taco Bell’s target customers include young adults and teenagers, budget-conscious consumers, late-night fast-food enthusiasts, and college students. On the other hand, McDonald’s is targeted toward just about everyone. 

You should also consider factors such as foot traffic and nearby competition from any similar brands. Consulting with the franchisor will also help you choose the right location based on their experience and market analysis.

Consider Support and Training

No matter what category franchise you choose, success is dependent on the support and training provided by the franchisor. Ask questions about the training programs offered, ongoing support and marketing assistance. Be sure the brand provides its franchisees with comprehensive training on operations, marketing strategies and product quality. It is also a good idea to talk to current and previous franchise owners to hear a firsthand account of what support is like. 

Review the Franchise Agreement

With the help of legal professionals, particularly those specializing in franchise law, carefully examine the franchise agreement. Be sure to thoroughly understand the terms, conditions and any restrictions that might be in place. 

Secure Financing 

If necessary, explore financing options such as bank loans and Small Business Administration loans. Beforehand, create a solid financial plan that you can show potential lenders. It will not only help you to gain a clear idea of what the finances of your business will look like, but also demonstrates your preparedness to secure financing.

Of course, the franchise process is a meticulous one that can differ from brand to brand, but understanding these five steps will help you seamlessly buy your own fast food franchise.