The second largest burger chain in the world, Burger King serves more than 11 million customers daily, and as such, it is a business opportunity that most entrepreneurs eye.
But is Burger King really profitable? How much does a Burger King franchise owner make? Should you invest in this business opportunity?
Find answers to these and many more such burning questions in this comprehensive guide!
About Burger King
Burger King is a very popular American hamburger chain that was founded in 1954 in Jacksonville, Florida, by Keith J. Kramer and Matthew Burns, Keith’s wife’s uncle.
The idea to start a restaurant came after being inspired by McDonald’s. So the duo bought the rights to a special machine called Insta-Broiler and named their burger restaurant as “Insta-Burger King” back then.
The first Burger King franchise opened in Miami in 1954, and today, there are more than 1900+ units in 100 countries with 700 outlets in the U.S. alone.
Burger King offers franchise opportunities and prefers individuals who have experience in the QSR industry. The individual must also have a net worth of $1,000,000 USD and minimum liquid assets of $500,000 USD.
If you meet these basic requirements to own a Burger King franchise, then keep reading on to learn about the sales and revenue figures, etc., of this burger giant.
Burger King Key Financial Figures
| Franchise fee | $50,000 |
| Royalty fee | 4.5% |
| Marketing fee | 4.0% |
| Investment (mid-point) | $1,243,000 |
| Average sales | $1,216,000 |
| Payback period | 3.5 years |
| Minimum net worth | $1,500,000 |
| Minimum liquid capital | $500,000 |
How Much Does it Cost to Open a Burger King Franchise?
On average, the required investment to open a Burger King franchise is $1,243,000. However, the investment amount may vary depending on the franchise model you choose:
| Type of Restaurant | Lowest | Highest | Average |
| Freestanding | $1,790,800 | $4,194,700 | $2,992,750 |
| Big-Box | $558,700 | $1,004,100 | $781,400 |
| Mall Food Court | $599,800 | $1,151,700 | $875,750 |
| Co-Brand | $752,900 | $1,602,800 | $1,177,850 |
| Delivery Restaurant | $230,000 | $544,000 | $387,000 |
| Total | $1,242,950 |
How Much Does A Burger King Franchise Owner Make?
The sales of a Burger King franchise may vary based on their service, location, operating and advertisement expenses, number of staff, type of franchise model, etc.
However, traditional franchise-owned Burger King outlets make an average annual sale of $1,215,970, with the highest average annual sales being $4,791,985.
And non-traditional franchise-owned Burger King outlets make an average annual sales of $947,585, with the highest average annual sales being $3,901,264.
How Much Does Burger King Employee Earn?
The salary of a Burger King employee may vary depending on their skills, experience level, location, Department, etc.
However, according to ZipRecruiter, a Burger King employee makes a minimum of $10.40 an hour and a maximum of $30.35 an hour on average.
So, someone at an entry-level position at Burger King would make $21,628 a year, and someone at a high-level position would make $63,125 a year on average.
Pros & Cons Of Burger King Franchise
Pros Of Burger King Franchise
- Offers solid support to franchises.
- Offers a range of franchise formats.
- Full ownership is provided to franchisees.
- Offers comprehensive training.
- Offers financing.
- Highly profitable.
- Ubiquitous brand.
Cons Of Burger King Franchise
- Does not offer exclusive territory protection.
- External competition.
- High-cost investment.
- Charges $280 background check fee and $5,000 application fees.
Read: How Much Does A Nothing Bundt Cakes Franchise Owner Make?
Burger King Franchise Average Revenue & Profit
The Burger King is one the most successful burger joints in the world, so it provides an opportunity for franchise owners to make a handsome profit.
Burger King franchise makes average annual sales of $1,215,970 a year, and with a profit margin of 30%, we estimate that it makes an annual profit of $358,711 a year, with the minimum average profit being $175,630 per year.
And if we talk about the company itself, then, according to Statista, in the financial year 2022, Burger King made a revenue of 1.9 billion U.S. dollars.
Burger King Franchise Failure Rate
To find out the failure rate of Burger King franchise let us look at the data shared below:
System-wide Outlet Summary
| Outlet type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2018 | 7,176 | 7,280 | +104 |
| 2019 | 7,280 | 7,294 | +14 | |
| 2020 | 7,294 | 7,029 | -265 | |
| Company-Owned | 2018 | 50 | 50 | 0 |
| 2019 | 50 | 52 | +2 | |
| 2020 | 52 | 52 | 0 | |
| Total Outlets | 2018 | 7,226 | 7,330 | +104 |
| 2019 | 7,330 | 7,346 | +16 | |
| 2020 | 7,346 | 7,081 | -265 |
From the data shared in the table above, we can see that Burger King saw an increase of 104 units in 2018 and an increase of 14 units in 2019. However, in 2020 the year of the Pandemic, 265 outlets closed down.
So after analyzing the data, we can say that Burger King is growing but at a slow rate which can be an indicator of unsatisfactory profit earnings or simply the fact that stores are not performing that well in certain locations.
So before you invest in this franchise, you must consider this fact.
Burger King Franchise Payback Period
To find out the payback period of Burger King franchise, let us do some calculations:
| AVERAGE INVESTMENT | $1,243,000 |
| AVERAGE REVENUE PER OWNER | $1,215,970 |
| AVERGAGE PROFIT PERCENTAGE | 30% |
| AVERGAGE PROFIT PER YEAR | $358,711 |
| AVERAGE PAYBACK PERIOD | 3.5 years |
PAYBACK PERIOD = TOTAL INVESTMENT / PROFIT PER YEAR
= 1243000/358711 = 3.46 = 3.5 Years based on median
The average investment for a Burger King Franchise is $1,243,000.
With an average profit percentage of 30%, the average profit per year is $358,711.
This means that the average payback period for a Burger King Franchise is 3.5 years, and the total investment of would be recouped within this period.
Burger King Facts
- Because of copyright issues, Burger King in Australia is known as Hungry Jacks.
- Burger King has an 800-calorie burger called “Suicide Burger” on their secret menu. This burger comes with four patties, four cheese slices, a special sauce, and bacon.
- Sarah Michelle Gellar appeared in a commercial promoting Burger King when she was a kid.
- Burger King delivers in 13 selected states.
- Burger King runs a crazy royalty program where you get $30 once you download the BK app and a free item on your every fourth order.
- The original Burger King Whopper was introduced in 1957, and it cost just 29 cents at that time.
- The company had issued 12 Crown Cards to lucky customers who are entitled to free food at Burger King.
- Burger King was originally named as “Insta-Burger King.”
- You can customize almost anything at Burger King.
- The devastating Hurricane Andrew that swept through Florida in 1992 damaged Burger King headquarters in Miami.
What is Burger King Best Known For?
Burger King is the second-largest burger chain in the world, and every day, Burger King receives more than 11 million customers.
This Burger giant is known for offering high-quality, great-tasting food that too at an affordable price.
Burger King is committed to using premium ingredients, serving signature recipes, and offering family-friendly dining experiences.
All these factors have made Burger King a successful brand for 50 years.
Here are a list of some of the best menu items that you must try at Burger King:
- Whopper
- Triple Whopper
- Bacon King
- Chicken Fries
- Original Chicken Sandwich
- Double Whopper
- Hamburger
- Double Stacker King
- Double Quarter Pounder King
- Impossible Whopper
- Caramel Sundae
- Chicken Nuggets
Is Burger King Franchise Profitable?
The profitability of any franchise depends on the sales amount, investment amount, etc. And if we talk about the Burger King franchise, then yes, it is a very profitable company to invest in.
Burger King franchise owner makes $358,711 a year in profit on average, and even the worst-performing outlets make an annual profit of $175,630 on average.
Since the demand for Burger King is so high, you can expect to enjoy profits in this range, and once you have recovered the initial investment amount, then you can get to enjoy a good amount of profit.
Burger King Franchise Earning Potential
The earning potential of any company is contingent on many factors, such as adopting new marketing and advertising strategies, coming up with new recipes, adapting to the change and preferences of individuals, etc.
The best-performing Burger King franchises have made average sales of up to $4,791,985.
So clearly, the earning potential of Burger King is high, and Burger King franchise owners can make such sales and profit.
Wrap Up
After looking at the key financial figures of Burger King, this is what we think:
You can earn a good amount of profit from Burger King. However, it requires you to put in a hefty investment of $1,242,950 on average. Also, you won’t be to enjoy profit until you repay your initial investment amount, which is quite high here.
Quite a few Burger King outlets closed down in the past few years, which is again something to consider.
Overall, you would have to wait a lot before you start enjoying the profits earned from your Burger King franchise, and this could be one of the reasons for the closing rate of Burger King.
Frequently Asked Questions
How much advertisment and royalty fees does Burger King charge?
Burger King charges an advertisement and royalty fee of 4% and 4.5% of sales, respectively, which is high.
What is the intial franchise fees and other related costs of opening a Burger King franchise?
Burger King charges an initial investment fee of $50,000 for an agreement of 20 years. Apart from this, it also charges an application fee of $5,000 along with a $280 background check fee.
Do I need experience to be eligible to buy a Burger King franchise?
Burger King prefers candidates who have a QSR background and have the financial and administrative capabilities to run a QSR restaurant.
Amit Gupta is the founder of DrFranchises – a digital marketing agency that helps brands rank better on Google Maps through local SEO strategies. Amit has over 11 years of experience in digital marketing, SEO, email marketing, and social media marketing. He’s also the owner of multiple franchises and has helped countless brands achieve success online. When he’s not working, Amit can be found playing with his dog.