The hamburger is a classic American food, and we eat a lot of burgers. In fact, Americans eat about 50 billion hamburgers every single year, which means the average American eats 3 burgers a week every week. With so much business to be had, opening a hamburger restaurant seems like a great opportunity for anyone looking to own their own business. But it can be difficult to differentiate your hamburger restaurant from all the rest since most Americans are looking for a ‘standard’ burger rather than something unique and different. As a result, many people choose to open a franchise restaurant instead of starting one from scratch.
There are many advantages to opening a franchise restaurant – you get a brand that is already recognized by customers, economies of scale when buying supplies, and a well-established business model that has already proven successful. Most people think of franchising as being in business ‘for’ yourself but not ‘by’ yourself. However, there are many hamburger franchises to choose from, and you definitely want to make sure you consider all your options before buying into any of them. With that in mind, we have found some of the best hamburger restaurant franchises in several categories: highest revenue, fastest growth, lowest start-up costs, and franchisee satisfaction. Hopefully, this article will help you make a decision about which franchise is best for you.
[Note: all data below is for franchise locations in the US only – international locations are not included.]
Burger Franchise with the Highest Revenue: McDonald’s
The first company on our list will probably not surprise you – McDonald’s is the highest revenue-generating burger restaurant and easily one of the best franchises to own. Each McDonald’s makes on average $2.8M a year in revenue. This is despite having over 13,000 locations across the country. According to the company, they sell 7.5 burgers every single second!
McDonald’s is often considered the original burger franchise, and they are certainly a market pioneer in franchising. The company was also one of the first (and probably the best) to establish a specific business model for their franchisees, which includes everything from how long to cook the fries to what prices to charge on the menu. With McDonald’s, you aren’t exactly going to get a lot of creative freedom to run your restaurant. But what you will get is a business model that makes billions of dollars each year, and which pretty much every American can recognize just by its logo. This franchise is best for people looking for predictability for their business.
|2018 # of Locations||13,914||Av. Sales/Location||$2.8M|
|2018 # New Locations||-122||Total Set-Up Costs||$1M – $2.2M|
|Required Liquid Assets||$500,000||Franchise Fee||$45,000|
|Required Net Worth||N/A||Ongoing Fees||Average 10.7% of Sales|
Burger Franchise with the Fastest Growth: The Habit Burger Grill
When looking for franchise companies to join, one important factor is how much growth the company is experiencing. After all, most people would rather join a rising company than a falling one. One challenge with some of the more well-known hamburger franchises is that they have already opened thousands of locations, and so have fewer opportunities for new ones. So, if you are looking for fast growth in a hamburger franchise, you should take a look at a smaller chain called Habit Burger. Habit Burger is a California-based chain that strongly associates itself with the casual California lifestyle and tastes.
Habit Burger is much lesser known than competitors like McDonalds, and only has 272 locations in the U.S – 197 of which are in California alone. So, the company is really still more of a local chain for California than a nationally recognized brand. But while they may be small now, they are growing very fast. In 2018 they added 37 locations – a growth of almost 18% – and in 2019 they added another 29 locations for growth of almost 12%. And it’s not just growing by a number of locations – in 2018 the company grew its sales by 23%. With all this growth, Habit Burger is a great opportunity for anyone looking to join an up-and-coming chain.
[Note: In early 2020, Habit Burger was acquired by Yum Brands, Inc. So, anyone looking into this franchise should check that the franchising rules have not changed.]
|2018 # of Locations||243||Av. Sales/Location||$1.7M|
|2018 # New Locations||37||Total Set-Up Costs||$1.2M – $1.4M|
|Required Liquid Assets||$90,000 – $120,000||Franchise Fee||$35,000|
|Required Net Worth||N/A||Ongoing Fees||7% of Sales|
Burger Franchise with the Highest Franchisee Satisfaction: Wendy’s
As far as burger restaurants go, there’s not many more classic than a Wendy’s. Founded in 1969, it’s not only one of the oldest hamburger chains, but it also works hard to maintain the ‘old-time’ culture that it started with – they always stress that they ‘don’t cut any corners’ in making quality food. They take this quite literally with their famous square hamburgers, and the company also never freezes in meat to make sure the taste is as fresh as possible. But this chain isn’t stuck in the past by any means – they also have a mad twitter game.
This classic burger chain is not only popular with customers, but it’s also the highest-ranked burger franchise on the Franchisee Satisfaction Survey by Franchise Business Review. While their high ranking is due to several factors, but a large part is support they provide their franchisees. For example, franchisees working with Wendy’s join a supply chain co-op that helps them get lower prices on supplies and equipment. There is also a Franchisee Advisory Council that represents the interests of the franchisee to Wendy’s leadership. The company also has a commitment to the community by supporting the Dave Thomas Foundation for Adoption® and to the environment by committing to cut its energy usage by 20% by 2025.
Wendy’s is a great option for people looking to open a hamburger franchise and who want to make sure they enjoy working there.
|2018 # of Locations||6,711||Av. Sales/Location||$1.6M|
|2018 # New Locations||77||Total Set-Up Costs||$2M – $2.5M|
|Required Liquid Assets||$2M||Franchise Fee||$40,000|
|Required Net Worth||$5M||Ongoing Fees||8% of Sales|
Burger Franchise with the Lowest Start-up Costs: Five Guys
The final burger chain on our list is also committed to fresh not frozen beef – Five Guys Burgers and Fries. Five Guys serves hand-formed hamburgers cooked in only peanut oil. Founded in 1986 by brothers in Arlington, VA, the company starting franchising in 2003 and the has grown a lot since then. There are now over 1,300 Five Guys locations across the country, and it is fast becoming a well-recognized burger chain for Americans. The company also says it is working on opening 1,500 more locations, though the timeline for that number is not given. The company even sells ‘gear’ – T-shirts, bags, and even Christmas ornaments – for people who want to tell the world they like the chain.
But Five Guys is not just large and growing – it is also one of the lowest cost hamburger franchises to start. The estimated total start-up costs range from $306,00 to $716,000, so on average can be expected to be about $511,000. While that’s not cheap, it is much less than the cost of most another hamburger chain, such as McDonald’s which costs from $1M to $2.2M. Franchisees also must have $250,000 in liquid assets and at least a $500,000 net worth to apply to own a Five Guys location. With these start-up costs, Five Guys is likely a good choice for people who have already had a fair amount of financial success in their life and who are now looking to invest in a larger business opportunity.
|2018 # of Locations||1,358||Av. Sales/Location||$1.3M|
|2018 # New Locations||37||Total Set-Up Costs||$306,000 – $716,000|
|Required Liquid Assets||$250,000||Franchise Fee||$25,000|
|Required Net Worth||$500,000||Ongoing Fees||~6% – 8% of Sales|
- “The Average American Consumes About 30 Pounds Of Hamburgers A Year.” South Florida Reporter, South Florida Reporter, 27 May 2019, https://southfloridareporter.com/the-average-american-consumes-about-30-pounds-of-hamburgers-a-year/.
- “Ranking the Top 50 Fast-Food Chains in America.” QSR Magazine, QSR Magazine, 5 August 2019, www.qsrmagazine.com/content/qsr50-2019-top-50-chart.
- “Franchising FAQs.” McDonald’s, McDonalds.com, 2019, www.mcdonalds.com/us/en-us/about-us/franchising/franchising-faq.html.
- Peterson, Hayley. “Here’s what it costs to open a McDonald’s restaurant.” Business Insider, Business Insider, 6 May 2019, www.businessinsider.com/what-it-costs-to-open-a-mcdonalds-2014-11.
- “See All Locations.” Habit Burger, HabitBurger.com, 2020, https://www.habitburger.com/locations/all/.
- Stern, Gary. “Rapid Growth: Habit Burger Grill Expected To Open 35 New Restaurants In 2019.” Forbes, Forbes Magazine, 2 Apr. 2019, https://www.forbes.com/sites/garystern/2019/04/02/rapid-growth-habit-burger-grill-expected-to-open-35-new-restaurants-in-2019/#6727597f511a.
- Taylor, Kate. “The Parent Company of KFC and Taco Bell Is Acquiring Habit Burger Grill, a Burger Chain with a Cult Following.” Business Insider, Business Insider, 6 Jan. 2020, https://www.businessinsider.com/yum-brands-to-acquire-habit-burger-parent-company-2020-1.
- “Franchise FAQs.” Wendy’s, Wendys.com, 2019, https://www.wendys.com/franchise-faqs.
- “Wendy’s North American Franchising General Information.” Wendy’s, Wendys.com, 2019, https://www.wendys.com/north-american-franchising-general-information#support.
- “Environmental Sustainability.” Wendy’s, Wendys.com, 2019, https://www.wendys.com/environmental-sustainability.
- “Adoption.” Wendy’s, Wendys.com, 2019, https://www.wendys.com/adoption.
- “The Five Guys Story.” Five Guys Burgers and Fries, FiveGuys.com, 2019, https://www.fiveguys.com/fans/the-five-guys-story.
- “Five Guys Burgers and Fries Franchise.” Five Guys Burgers and Fries, FiveGuys.com, 2019, https://www.franchisehelp.com/franchises/five-guys-burgers-fries/.
- “About Us.” Five Guys Burgers and Fries, FiveGuys.com, 2019, https://five-guys-gear.myshopify.com/pages/about-us.