Best Restaurant Franchises – 4 of Our Top Rated Choices

Opening a restaurant is one of the most popular ways people launch their own business. Owning a restaurant can be incredibly rewarding, yet it presents enormous challenges – managing suppliers, attracting customers through marketing, hiring staff, food preparation, and countless other responsibilities. Multiple studies reveal that most independently owned restaurants close within just a few years, with some research showing up to 90% of independent restaurants failing within their first year. These statistics paint a daunting picture for aspiring restaurant owners.

This reality drives many entrepreneurs toward franchise restaurants. Franchise ownership offers compelling advantages – immediate access to an established brand name, major economies of scale with suppliers, and a proven business model with demonstrated success. Chain restaurants capture over 60% of industry traffic, and most franchise companies only approve operators they believe will succeed, significantly boosting your odds. While creative freedom is limited, this trade-off comes with substantially higher success rates. 

For those considering franchise restaurant ownership, which options stand out? Not all restaurants are equal, and different chains excel in various areas. You might prioritize rapid growth, exceptional franchisee satisfaction, or optimal return on startup investment. With numerous options spanning burger franchises, coffee franchises, and beyond, choosing requires careful consideration.

Regardless of your priorities, below are some of the top-performing restaurant chains in key categories.

Fastest Growth: MOD Pizza

MOD Pizza is a pizza franchise founded in 2008 in Seattle, WA, positioning itself as the original super-fast pizza concept. Each pizza is made-to-order with over 30 topping choices and ready in under 30 minutes. They also offer custom salads for non-pizza customers. The company emphasizes community impact through its people-first mission, paying above minimum wage, hiring individuals with special needs, and selling impact pizzas to support various causes.

MOD Pizza stands as arguably the fastest-growing restaurant chain in America over recent years. By location count, MOD expanded more than 145% across three years (57% in 2017, 33% in 2018, and 16% in 2019) from 192 to 471 locations, announcing plans for 1,000 locations within five years. For those seeking a rapidly expanding restaurant chain, MOD delivers. The company actively seeks franchisees interested in multiple locations, maintaining a smaller franchisee base to preserve company culture. This represents an exceptional opportunity for entrepreneurs wanting to join an emerging restaurant powerhouse. 

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Highest Franchisee Satisfaction: Pizza Ranch

Pizza Ranch earned top honors in the 2020 Franchisee Satisfaction survey by Franchise Business Review. This popularity extends beyond franchisees – customers consistently rank it among their favorite pizza chains. QSR magazine and Market Force named Pizza Ranch the #1 favorite pizza chain in America. 

Pizza Ranch operates as a buffet-style restaurant serving pizza, salad, and chicken. Founded in 1981, the company now operates over 200 locations across 14 states. The company emphasizes community commitment through its unique Community Room program – each location provides free meeting space for local nonprofits and charities, donating a portion of sales on usage nights to the hosting organization. Franchisees receive encouragement to engage deeply with their communities. The company delivers robust franchisee support including site selection assistance, construction guidance, five weeks of training, monthly business consultant visits, and a Franchisee Advisory Council where peers nominate representatives to communicate with leadership. 

This combination of positive culture and comprehensive franchisee support clearly explains Pizza Ranch’s exceptional popularity among its operators.

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Highest Topline ROI: Domino’s Pizza

Domino’s Pizza ranks among the largest pizza chains in the United States and globally, with over 10,000 international locations. The company shows no signs of slowing, actively pursuing 2,000 additional U.S. stores through their ‘fortressing’ strategy. This ambitious plan aims to position most Americans within 17 minutes of a Domino’s location – faster than preparing frozen pizza at home.

Beyond its massive footprint, Domino’s delivers one of the highest topline returns on investment (ROI) among restaurant chains. Topline ROI represents revenue divided by initial location investment. While profit data would be ideal, most franchises don’t publicly disclose profit figures, making topline ROI our best available metric. 

Average Domino’s locations generate $1.1M in revenue with opening costs ranging from $103,000 to $570,000. This creates topline ROI ranging from 197% to 1,090%. Using average startup costs of approximately $330,000 (midpoint of the range), franchisees need roughly 6% overall profit margin to recover their investment within five years. Most franchisees can reasonably expect positive returns within several years, making this an excellent franchise opportunity for ROI-focused investors.

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*Note: All data is for Domino’s locations in the USA only

Lowest Start-up Costs: Chick-fil-A

Chick-fil-A stands as America’s third-largest restaurant chain, maintaining robust growth with over 16% sales increases in 2018. The company cultivates an exceptionally strong culture (employees receive politeness training) and fiercely protects these values by accepting only 0.4% of applicants to operate locations. While joining their ranks proves extraordinarily challenging, the rewards justify the effort: each Chick-fil-A generates approximately $4.2 million annually. For comparison, McDonald’s locations average about $2.8 million yearly. 

The startup cost for Chick-fil-A will likely surprise you – just $10,000. This franchise fee represents your only expense, as Chick-fil-A covers everything else: land acquisition, building construction, and equipment purchases. This rarity makes Chick-fil-A one of the few franchises available under $10,000.

Why does Chick-fil-A cover these costs? It’s strategic, not generous. Chick-fil-A retains ownership of all restaurants, meaning you cannot own a Chick-fil-A location. They employ an ‘Operator’ model where individuals apply to operate restaurants without ownership rights. Additional restrictions limit operators to one location and prohibit involvement in other businesses simultaneously. This definitely isn’t an investment franchise. 

Despite these limitations, Chick-fil-A remains among the premier restaurant chains and presents an outstanding opportunity for many entrepreneurs.

[Some readers might notice that Chick-fil-A’s $10,000 startup costs create by far the highest top-line ROI. While true, we’ve excluded it from that category because you cannot actually own a Chick-fil-A location.]

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FAQ: Restaurant Franchises

What are the benefits of owning a restaurant franchise?

Restaurant franchise ownership offers numerous advantages over starting from scratch. Key benefits include:

1. Brand Recognition: Franchise ownership provides immediate access to established, recognized brands, making customer attraction significantly easier than launching new concepts.
2. Training and Support: Most franchisors deliver comprehensive training programs ensuring operational proficiency. Ongoing support and guidance prove especially valuable for first-time restaurant owners.
3. Proven Business Model: Franchises provide tested business models and operating systems, substantially reducing risk compared to new restaurant concepts.
4. Marketing and Advertising Support: Franchisors typically manage national or regional advertising while providing local marketing guidelines. This drives customer traffic while ensuring brand consistency.
5. Purchasing Power: Franchisees benefit from collective network buying power, often resulting in lower costs for inventory, food, and supplies.
6. Easier Access to Financing: Banks often prefer lending to franchises due to reduced risk associated with established brands and proven business models.
7. Site Selection Assistance: Many franchisors help with location selection and lease negotiations, leveraging their knowledge of successful site characteristics.

However, franchise ownership includes potential drawbacks. Creative freedom is typically limited as you must adhere to established systems and brand standards. Franchisors require ongoing royalties and additional fees, which can be substantial. The franchisor’s reputation and practices directly impact your business. Initial franchise investments can be quite high. Therefore, conduct thorough research and consider seeking legal and financial counsel before purchasing any franchise.

How much can you make with a restaurant franchise?

Restaurant franchise income varies dramatically based on multiple factors including restaurant type, location, brand recognition, and management effectiveness.

Franchise margins typically range between 10-30% of revenue, though overhead costs like rent, labor, and food significantly impact these figures. Fast-food restaurants generally achieve higher profit margins due to lower labor and food costs, while full-service establishments often see reduced margins from higher operational expenses.

For concrete figures, consult the franchise’s Franchise Disclosure Document (FDD). Many franchises include “earnings claims” sections providing franchisee earnings ranges. While these offer potential income insights, remember they represent averages and individual results vary significantly.

Restaurant franchise ownership isn’t guaranteed wealth generation. It requires substantial upfront investment, and restaurant management is time-intensive and challenging. As a franchise owner, ongoing royalty fees will reduce your profits.

When considering franchise purchase, speak with current and former franchisees about their experiences and earnings. Consider working with attorneys or business advisors who can help interpret financial disclosures and assess franchise profitability potential.

What are the steps to owning a restaurant franchise?

Restaurant franchise ownership involves several essential steps:

1. Self-Assessment: Evaluate whether franchising suits you. Running franchises requires significant investments of time, energy, and capital. Consider your comfort level operating within franchise system constraints.
2. Research: Investigate various restaurant franchises, examining initial investment requirements, ongoing fees, franchisor support, brand reputation, and alignment with your interests and skills.
3. Initial Contact: Contact potential franchises for additional information. They’ll typically provide initial opportunity details.
4. Application: Complete franchise applications for serious considerations. Franchisors review these to determine initial qualification compliance.
5. Franchise Disclosure Document (FDD): Interested franchisors provide FDDs – legal documents detailing franchise information including costs, mutual obligations, and litigation or bankruptcy history. Review carefully, preferably with legal counsel.
6. Validation: Interview existing franchisees about their experiences, gaining insights into franchisor support, earning potential, and business challenges.
7. Discovery Day: Many franchisors host Discovery Days where potential franchisees visit corporate offices, meet teams, and learn more about operations. These provide valuable company culture insights and question-answering opportunities.
8. Franchise Agreement: When both parties wish to proceed, sign the franchise agreement – a legally binding document outlining franchise terms. Review with legal counsel before signing.
9. Secure Financing: Unless self-funding, secure financing through bank loans, Small Business Administration loans, or other sources.
10. Training: After agreement signing and financing, complete franchisor training programs learning business operations.
11. Location Selection and Build-Out: Franchisors typically assist with restaurant location selection and space construction or outfitting.
12. Grand Opening: Launch operations with grand opening events. Franchisors typically provide startup support ensuring successful beginnings.

Each franchisor maintains specific processes, so these steps may vary. Always conduct thorough due diligence and consider seeking legal and financial guidance before franchise commitments.