After five years in the business, when you go to sell your franchise based on the median multiple of .34 and net sales average from 2019 of $1,351,000 it would sell for about $459,340. This is considerably lower than the average initial investment of $2,638,100.
Moreover, on average, you will be able to make a profit by selling your franchise iif you own multiple locations, as the median multiple for stores selling more than $5 million is .86.
If you had 10 Burger King franchises this would be about $13,510,000 in net sales.
Therefore, selling your multi-unit franchise would amount to $11,618,600. Assuming that every additional location has the same initial investment of $2,638,100, selling would only earn you about 44% of your initial investment.
Most Burger King and quick service restaurants franchisees are not making their money from the franchise itself. Rather from real estate!
Franchisees that own the real estate rather than leasing it have the opportunity to sell the real estate along with the franchise which allows for much greater profit than the sell of the restaurant business alone.
Now let’s take a look at one of the largest Burger King franchisees to see how they make money.