Owning a fast food franchise can be an incredibly lucrative business, but it requires a lot cash.
You must have at least $750,000 in liquid assets to open a McDonald's or Taco Bell restaurant, for example. To open a KFC, your net worth must be at least $1.5 million.
On top of initial investments that can exceed $1 million, most chains charge monthly fees that can cost up to 12% of gross sales.
We compiled a list of some basic financial requirements for becoming a franchise owner, based on information provided by six major fast food chains.
Following the name of each restaurant chain is the total startup costs to obtain franchisee rights and open one new restaurant in the US.
Taco Bell: $1.2 million to $2.5 million
Minimum net worth: $1.5 million
Minimum liquid assets: $750,000
Franchise fee: $45,000
Royalty fee: 5.5% of gross sales
Average sales per unit in 2013: $1.4 million
Wendy's: $2 million to $3.5 million
Minimum net worth: $5 million for new multi-unit franchisees or franchisee groups
Minimum liquid assets: $2 million
Franchise fee: $40,000 per restaurant
Royalty fee: 4% of gross sales
Advertising fee: 4% of gross sales
Average sales per unit in 2013: $1.5 million
KFC: $1.3 million to $2.5 million*
Minimum net worth: $1.5 million
Minimum liquid assets: $750,000
Franchise fee: $45,000
Service fee: 4% of gross sales
Advertising fee: 5% of gross sales
Average sales per unit in 2013: $942,000
McDonald's: $955,708 to $2.3 million
Minimum liquid assets: $750,000
Franchise fee: $45,000
Service fee: 5% of gross sales
Average sales per unit in 2013: $2.5 million
Pizza Hut: $295,000 to 422,000
Minimum net worth: $700,000
Minimum liquid assets: $350,000
Franchise fee: $25,000
Service fee: 6% of gross sales
Advertising fee: 2.5% to 3% of gross sales
Average sales per unit in 2013: $861,000
Subway: $116,000 to 262,850
Minimum net worth: 80,000 to 310,000
Minimum liquid assets: $30,000 to 90,000
Franchise fee: $15,000
Royalty fee: 8% of gross sales
Advertising fee: 4.5% of gross sales
Average sales per unit in 2013: $490,000
*According to FranchiseDirect.com
SEE ALSO: Why Chipotle Doesn't Franchise
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