Here's How Much It Really Costs To Open A Wendy's Franchise
Opening a franchise of an established fast-food restaurant is widely considered one of the best ways to get your feet wet in the business world.
Unlike many business ventures, it does not require any brilliant, new, innovative idea. The business plan is already set out there for you and has been replicated in thousands of locations across the country and the world. However, what opening a new Wendy's location does entail is a rather large chunk of change.
The business model for franchising a restaurant is similar across the board. Each restaurant charges a franchising fee, an amount that the person who wants to begin a franchise of that restaurant must pay. On top of that, there are monthly fees calculated based on the restaurant's gross sales. These can range from around 2 percent on the lower end to 15 percent on the higher end (via Eater).
A lower initial franchising fee will usually mean a higher monthly fee and vice versa, although this isn't always the case.
How much you'll need to franchise a Wendy's
In addition to these, the franchisee has to pay for the start-up costs associated with the restaurant and sometimes is required by the company to have a particular net worth as well as a certain amount of liquid assets in order to make sure that you can pay for any potential problems that might arise.
If you want to open a Wendy's, you (or your business group) will need a net worth of at least $5 million as well as $2 million in liquid assets (via Business Insider). The start-up costs are significantly higher than other fast-food locations, and can cost anywhere from $2 million to $3.5 million. In comparison, the franchise fee of $40,000 seems like pocket change. And to make sure Wendy's is making money into perpetuity, the restaurant will take 4 percent of your gross sales in royalties as well as 4 percent of gross sales as advertising fees.
While these numbers seem mind boggling, it may well indeed be a good business proposition given the fact that franchised Wendy's stores overall brought in $66 million in sales last year (via Statista).