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Hardly the “Other” Hamburger Joint

The history of Burger King goes back to 1954, when two Miami men opened their first location and sold broiled (not fried!) burgers for 18 cents apiece.  Milkshakes were the same price.  Apparently buying into the American mantra that “bigger is better,” in 1957 they introduced the country to the Whopper, which sold for a “whopping” 37 cents.  My, how times have changed!  Consistently ranked second among hamburger-centric restaurants in terms of both volume of sales and popularity – bet you can’t guess who is number one – the company sold its first franchise in 1961.  Other milestones include its first international restaurant in 1963 and first drive-through service in 1975.  Only two years later, the corporation could boast 2,000 locations on three continents.

Burger King Franchise Review

Today there are more than 11,400 Burger King restaurants in 60 countries around the world, and all but about a thousand of them are owned by franchisees.  It is estimated that a remarkable 15.7 million customers visit these establishments every day!  Having expanded from the basic burgers-and-fries scenario, Burger King restaurants also serve a wide selection of chicken-based items plus salads and an extensive quick-breakfast menu.  The company spends around $10 million a year on marketing, which includes testing and adding new food items as well as designing memorable ad campaigns.  Hamburger lovers the globe over recognize Burger King as “Home of the Whopper,” and who could forget their slogan from the 1980s, “Where’s the Beef?

Burger King Franchise Information & Costs

If you are interested in acquiring a Burger King franchise, you will first need to come up with $50,000 as a franchise fee.  This money goes toward supporting home office operations in Miami as well as providing new franchisees with expert advice on finding the right location for their store, plus extensive training and assistance in hiring employees.  Unlike some fast-food chains that grant franchises in perpetuity, Burger King’s agreement has a 20-year cap, at which point a new $50K franchise fee is due.  The company’s annual royalty, however, is one of the lowest in the business.  Franchisees are charged only 4.5 percent of their annual gross revenue, which includes national advertising.  Prospective franchisees are expected to have a net worth of $1.5 million, of which at least half a million dollars is in cash.  It is estimated that a full financial commitment takes anywhere from $300,000 to $2.8 million.  Some of the elements that help push this number toward the high side include signage (up to $120,000) and the optional children’s playground, which can cost a franchisee as much as 85 grand.  Naturally, the more amenities one adds to the mix – an expanded kitchen area, more cooking equipment, a larger dining room, and two drive-up lanes as opposed to one – the greater the real estate cost.

A Well-Run Organization

New Burger King franchisees enjoy a full 70 days of training at the time they officially become part of the corporate family, which includes hands-on experience at an actual working restaurant.  They have plenty of opportunities to learn the tricks of the trade from fellow franchise operators who have “seen it all and done it all.”  The parent company also offers ongoing training to keep managers sharp and apprised of new developments in the industry.  The general public usually associates the franchising concept with small business, where people own one or two outlets – and usually not more than half a dozen, almost always in the same city or region.  But owning a business as a franchise can be incredibly lucrative, as one Burger King group has learned.  In 2006, the parent company’s largest franchise operator, Carrols Holdings Corp., itself became a public entity by floating an IPO (initial public offering) in the form of 15 million common shares of stock.  This franchisee operates 328 Burger King restaurants – a far cry from the mom-and-pop profile most franchise owners evoke – and raised a Whopper of a total from the stock sale: $210 million!

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