This Is The Most Profitable Restaurant Franchise You Could Own
There are many reasons entrepreneurs become franchise owners instead of starting their own restaurant from scratch. Buying into a franchise guarantees business assistance, an established name with a lower-than-average failure rate, and — in theory at least — higher profits (via The Balance Small Business). With almost 200,000 restaurant franchises in the United States according to Statista, it can be hard to decide which company is right for you (and to know which one will likely be the most profitable).
According to The Street, two of the most profitable franchises to own are Taco Bell and Chick-fil-A, with Taco Bell reporting $1.5 million per store annually, and Chick-fil-A stores said to bring in $4 million per store, per year. That sounds like a no-brainer, right? However, it's not as easy as it sounds to open that $4 million a year Chick-fil-A location of your dreams. Let's look a little closer at how much you stand to actually make as a Chick-fil-A operator — and we use the title "operator" because one of the first differences between Chick-fil-A and other brands is that you are considered an operator, not the owner-franchisee of your location.
Why Chick-fil-A is considered one of the most profitable franchises
Chick-fil-A is the third highest-grossing chain restaurant, behind McDonald's and Starbucks, according to Restaurant Business. Thousands of people apply each year to be a Chick-fil-A operator, and the selection process is extremely selective, according to The Chicken Wire. However, for those who are selected, Chick-fil-A is still considered one of the most profitable restaurant franchises because of its low cost of entry.
According to The Hustle, unlike other franchises which might ask you to have up to $1 million in assets, Chick-fil-A requires no minimum net worth and has the lowest franchise fee (and total investment cost) at $10,000. However, the trade-out is that Chick-fil-A also charges the highest royalty fee at 15 percent (the industry standard is right around 5 percent), and operators are required to shell out 50 percent of net profits. This may seem like a lot to give up, but with an average of $4.2 million per year in sales, you'll theoretically come out ahead of other franchises. If this still feels like a raw deal and you have extra money for startup costs or don't have the time to wait to be selected by Chick-fil-A, you could always try Taco Bell, although The Street asserts that opening one of these Mexican-inspired fast food locations could run you upward of $500,000, with the franchise fee alone costing $25,000 or more. That's a lot of crunchwraps!