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How much does the franchise owner make for 10 popular brands? | McDonald’s, Chick-Fil-A & More!
Written by: Parth Parth
Last Updated by
Rocio Somoza: July 12, 2022
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Mc Donald's
McDonald’s is the quintessential American fast-food chain restaurant. It was founded in 1940 as a restaurant operated by Richard and Maurice McDonald in San Bernardino, California, United States. Since then, they have been serving hamburgers, chicken nuggets, french fries, milkshakes, and ice cream. In the present day, it has over 36,000 locations in over 100 countries around the world.
McDonald’s has been a franchising company since 1955 and has relied on its franchisees to play a major role in the system’s success. Currently, about 95% of all U.S. restaurants are franchised to independent franchisees and about 5% are company-owned.
The total investment to begin the operation of a traditional McDonald’s franchise ranges from $1,366,000 to $2,450,000, which includes an initial franchise fee of $45,000– that you must pay to the franchisor.
How much does a McDonald's franchise owner make?
The median annual sales volume of franchised McDonald’s restaurants open at least 1 year was $3,366,000 in 2021. As such, we estimate that the median franchise owner makes around $436,200.
Starbucks
Starbucks Corporation or Starbucks is an American chain of coffee shops based out of Seattle, WA. As of November 2021, the company had 33,833 stores under the Starbucks brand in 80 countries. 15,444 of these were located in the United States. Out of Starbucks‘ U.S.-based stores, over 8,900 are company-operated, while the remainder is licensed operations.
A licensed Starbucks costs around $315,000 for the license fee and some of the key fixtures. You can expect to invest $1,100,000 to open a new Starbucks location and significantly less for a kiosk in a not traditional location. We estimate that the average franchise makes $1,235,000 and that the average Starbucks Store Manager’s yearly pay in the United States is approximately $62,514.
Chick-fil-A
The Chick-fil-A Franchise develops quick-service restaurants throughout the United States. The Chick-Fil-A menu specializes in a boneless breast of chicken sandwiches. Chick-Fil-A is also famous for its waffle fries and a wide variety of sauces. In the majority of the cases, franchised operators who are independent contractors run these restaurants.
The total investment necessary to begin the operation of a franchised Chick-fil-A restaurant business is from $219,055 to $2,912,697. However, the Chick Fil A franchise is only responsible for $10,000. Chick Fil A corporation will invest up to $2 million or more to build the restaurant!
It is very necessary to understand that the franchisee is like a licensed store manager for Chick-Fil-A too, much like Starbucks.
We estimate that the average Chick-Fil-A store makes $7,969,510 and that the average Chick-Fil-A Store Operator’s yearly earning in the United States is approximately $200,000.
Taco Bell
Taco Bell opened its first store in Downey, California in 1962 after its founder, Glen Bell, sold his former Taco store to his existing business partners. After having seen the success a business could make in selling tacos as the pilot dish on their menu, Bell decided to seek a larger challenge and instead developed the business model in place across all stores to this day that involves serving a variety of Mexican and Tex-Mex foods such as tacos, burritos, and nachos.
They sell a variety of “Mexican-inspired food”, from tacos, burritos, quesadillas, nachos, and other value menu items. Taco Bell Franchisor, LLC was organized as a company in Delaware in 2016. In turn, Taco Bell Corporation owns them, which was organized in California in 1962.
The estimated total investment necessary to begin the operation of a Regular Taco Bell Franchise ranges from $1,298,600 – $3,370,100. Based on the estimated sales provided by Taco Bell’s data, an average Taco Bell franchisee retains $242,682 in profit.
Wendy's
Wendy’s is one of the most recognizable restaurant brands in the world. It is famous for its hamburgers, sandwiches, fries, tenders, and milkshakes. The Baconator is one of the most popular items and even Jim Cramer mentioned it on his investment show numerous times. Wendys Breakfast has been one of the ways the company in recent years has helped to diversify its revenue streams.
Dave Thomas founded Wendy’s in Columbus Ohio in 1969. Thomas went on to serve as the Chief Executive until 1982. While he was not involved in the daily operations he continued to be heavily involved with the company. The family even after his death in 1999 continued to own many franchises. In 2008 Arby’s the third-largest restaurant chain at the time purchased Wendy’s for $2.34 Billion. The brands would later separate and would completely cut ties in 2018.
How much does a Wendy's franchise owner make?
Based on the median profits and upfront investment of opening a Wendy’s franchise it is an excellent opportunity. Wendy’s franchise owner ’s salary & compensation is about $300,000 per year. The national brand recognition Wendy’s has to offer and franchisees being able to recoup their initial investment within a couple of years make it a great opportunity.
Burger King
Burger King is one of the biggest fast-food companies in the world. They mainly offer a wide variety of burgers and fries. Did you know it is a franchise? Yes, Burger King is a franchise with over 18,000 locations worldwide, of which about 7,000 are in the U.S. alone. Burger King Corporation was founded in 1954 in Florida and is based in Miami. It is an indirect subsidiary of Burger King Worldwide, located in Delaware.
The estimated total investment needed for beginning operation is between $1,877,600 and $3,398,600. The highest-earning franchise made around $4.8 million in revenue whereas the lowest-earning franchise made less than $200,000. These numbers indicate that potential earnings can vary significantly and it depends on how well they run the business, the location, and other factors.
We can estimate that based on net revenue of $1,351,000 and a profit margin of 13%, the average Burger King franchise compensation is $175,630 per year.
Dunkin' Donuts
Dunkin’ Donuts, also known as Dunkin’ and DD, is an American multinational coffee and doughnut chain. Bill Rosenberg founded Dunkin’ Donuts in Quincy, MA in 1950. It began rebranding as a “beverage-led company”, and was renamed Dunkin’, in 2019 with stores in the U.S. beginning to use the new name. The rebranding is to eventually be rolled out to all international locations. With approximately 12,900 locations in 42 countries, Dunkin’ is one of the largest coffee shop chains in the world. At the close of 2021, there were 8,000+ Dunkin’ franchised locations in the US. It is led in the US by David Hoffmann as CEO & President and former CEO Nigel Travis in the role of Executive Chairman.
How much does a Dunkin' Donuts franchise owner make?
The estimated total investment necessary to begin the operation of a Dunkin’ Donuts Franchise ranges from $121,400 to $1,787,700. Based on the median sales provided by Dunkin’s franchise locations, a franchisee can make between $162,620 and $188,456 yearly depending on the type of location.
Subway
In 1965, a college freshman named Fred Deluca received an initial investment of $1,000 from Dr. Peter Buck, a nuclear physicist, to open a submarine sandwich shop to help pay his tuition. And what started as a small sandwich restaurant called Pete’s Subway in Bridgeport, Connecticut is currently the world’s largest submarine sandwich chain. Today, there are more than 40,000 locations of the Subway Franchise around the world serving fresh, affordable, made-to-order sandwiches.
Subway franchises make sales of $397,600 on average. This then translates to $59,640 in the store’s profits per year.
Domino's
Domino’s is an American multinational pizza and fast-food chain founded in 1960. It is currently led by President David Brandon and CEO Richard Allison. It is headquartered in Ann Arbor, MI. Domino’s has stores in 92 countries which number more than 18,300. It has over 1,200 stores in the United Kingdom, 1,500+ in India, and almost 6,600 in the US.
In 1960, Tom Monaghan and his brother, James, took over the operation of DomiNick’s, an existing location of a small pizza restaurant chain. James quit the business after some time to focus on his postman job and sold his half to his brother. By 1965, Tom had purchased two additional pizzerias for a total of three locations in the same county. Monaghan wanted the stores to share the same branding, but the original owner forbade him from using the DomiNick’s name. Monaghan officially renamed the business Domino’s Pizza, Inc. in 1965 when em employee suggested that would be a nice name for the chain.
How much does a Domino's franchise owner make?
The estimated total investment necessary to begin the operation of a Domino’s Franchise ranges from $156,450 to $682,500. Based on the net AUV for Domino’s franchise locations, a Domino’s franchisee makes $195,000 yearly.
Chipotle Mexican Grill
Chipotle Mexican Grill, Inc. popularly known as Chipotle, is an American chain of fast-casual restaurants in the US, UK, Canada, Germany, and France. They specialize in bowls, tacos, and Mission burritos that they make to order in front of the customer.
Steve Ells, who attended the Culinary Institute of America in Hyde Park, NY, founded Chipotle. In 1993, Ells founded the first Chipotle location in Denver, CO near the University of Denver, using an $85,000 loan from his father. Ells and his father calculated that the store would need to sell 107 burritos per day to be profitable. After a month, the restaurant was selling over 1,000 burritos a day.
Unfortunately, Chipotle does not offer franchises. All of its 2,750+ locations are company-owned. Chipotle managers can expect to make $60,000 to $90,000+!
We estimate that a Chipotle store costs $1,400,000 to open and based on our calculations, a Chipotle store makes $478,799 in yearly profits.
