Top 15 Most Profitable Fast Food Franchises To Own That Make The Most Money In 2023

most profitable fast food franchises to own

In today’s world, owning a fast-food franchise is a lucrative business idea and a great way to break into entrepreneurship. As the world keeps spinning and the economy fluctuates, it can be challenging to know which franchises to invest in that will generate income and continue to grow. 

With that being said, we have compiled a list of the top 15 most profitable fast-food franchises to own that make the most money in 2023. 

Whether you’re an entrepreneur looking to start your journey or an existing business owner looking to expand, these franchises have shown immense potential and growth, making them excellent choices for investment opportunities. So sit back, and let’s dive into the world of the most profitable fast-food franchises to own.

Key Takeaways


  • Profitable fast-food franchises invest heavily in marketing and advertising to maintain brand visibility and attract customers. Effective marketing campaigns, both online and offline, help drive sales and promote new offerings, attracting a larger customer base.
  • Franchises that prioritize providing comprehensive support and training to their franchisees tend to perform better. This support includes assistance with site selection, staff training, marketing campaigns, and ongoing operational guidance, ensuring consistent quality across all franchise locations.
  • Profitable fast-food franchises have embraced these trends with the rise of food delivery and digital platforms. They have partnered with popular delivery services or developed their infrastructure to reach a broader customer base. 

Understanding the Fast Food Franchise Business

Fast food franchises have become an integral part of our society. From McDonald’s to Subway, these restaurants are lining our streets, serving quick and convenient meals to hungry customers. But what exactly is the fast food franchise business, and how does it operate?

At its core, the fast food franchise business model is simple. A parent company, like McDonald’s, allows individuals to purchase the rights to open and operate a restaurant under their brand. In exchange for a franchise fee, the franchisee gains access to the parent company’s resources, including branding, marketing, and supply chain. 

However, being a franchisee isn’t all sunshine and burgers. Many rules and regulations must be followed to maintain the brand’s integrity. 

For example, franchisees must follow a specific menu, adhere to strict operating procedures, and meet certain sales quotas. Failure to comply with these regulations can result in the revocation of the franchise agreement.

Despite these challenges, the fast-food franchise business has seen incredible success over the years. Brands like McDonald’s and Subway have become household names, with loyal customers visiting their restaurants daily. 

Franchisees have also seen financial success, with the potential to earn high profits if they run a successful restaurant.

Related – Full Guide Entrepreneurs Who Want to Open a Franchise in 2023

How Profitable are Fast Food Franchises?

As consumers, we have all had the experience of walking into a fast food chain, inhaling the enticing aroma of fried foods, and satisfying our hunger with a delicious burger or crispy chicken sandwich. But have you ever wondered just how profitable these fast-food franchises are?

In short, the answer is incredibly profitable. The fast food industry is estimated to be worth over $570 billion globally, with popular franchises such as McDonald’s and Subway dominating the market. The top 50 fast-food franchises alone earned a combined $153 billion in revenue in 2020.

So what makes fast food franchises so lucrative? It comes down to a combination of factors, including convenience, consistent quality of the food, and the ability to offer meals at a lower price than traditional restaurants. 

Additionally, fast-food franchises often have strong brand recognition and can capitalize on their reputation to drive sales and profits.

Although they have come under scrutiny due to health and environmental concerns, fast-food franchises remain popular and profitable.

How do the Profit Margins of Different Fast Food Franchises Compare?

As we go through life, we will always crave some fast food occasionally. After all, what can compare to biting into a juicy burger or crunching on a savory fry? But have you ever wondered how much these fast-food franchises profit from our cravings?

There are some interesting differences to note when comparing profit margins between fast food franchises. For example, McDonald’s has an impressive profit margin of around 25%, which means that for every $1 they earn, they keep 25 cents. That’s quite a profit considering that the fast-food giant serves around 69 million customers worldwide daily.

Another well-known fast-food franchise is Subway, which boasts an impressive 49% profit margin. Subway’s menu consists of sub sandwiches and salads, and they have mastered the art of upselling with various topping choices that can add up quickly. 

Despite a slight decrease in popularity in recent years, Subway’s unique menu and clever marketing campaigns still allow it to rake in huge profits.

However, it’s not all rosy for every fast-food franchise out there. One chain struggling with low-profit margins is Burger King, whose margins have recently dropped to around 10%. 

One of the reasons for this might be their failed product launches that did not resonate with customers. Whatever the reason, this chain has to devise creative ways to regain lost ground.

Lastly, it is important to note that fast-food franchises that offer delivery services or mobile apps tend to fare better than those that do not. By utilizing digital channels, these franchises can reduce overhead costs and capture an audience that wants their fast-food fix without leaving home.

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What are the Top 15 Most Profitable Fast Food Franchises to Own?

While the profitability of fast food franchises can vary over time, here is a list of 15 highly profitable fast food franchises to consider owning.

#1. McDonald’s

most profitable fast food franchises to own

McDonald’s is one of the world’s largest and most successful fast-food franchises. Known for its iconic golden arches, McDonald’s offers a diverse menu that includes burgers, chicken sandwiches, fries, breakfast items, salads, and more. 

The franchise’s success lies in its efficient operations, strong brand recognition, and global reach. 

McDonald’s serves millions of consumers every day in over 100 countries. It has a well-established business model, including company-owned and franchised locations, making it a highly profitable franchise opportunity.

#2. KFC

most profitable fast food franchises to own

KFC, or Kentucky Fried Chicken, is a renowned fast-food franchise specializing in fried chicken. With a secret blend of 11 herbs and spices, KFC has become synonymous with its signature fried chicken. 

The franchise offers a variety of chicken-based products, including sandwiches, buckets, wings, and sides. 

KFC’s success can be attributed to its unique recipes, effective marketing campaigns, and global expansion. The franchise operates in numerous countries worldwide and has a strong brand presence in the fast food industry.

#3. Subway

most profitable fast food franchises to own

Subway is a fast-food franchise focusing on made-to-order submarine sandwiches and salads. It differentiates itself by offering a variety of fresh and customizable ingredients. Subway’s menu appeals to health-conscious consumers looking for quick and healthier options. 

The franchise operates on a low-cost model and has many locations globally. Subway’s profitability stems from its affordable prices, quick service, and emphasis on customization.

#4. Dunkin’

most profitable fast food franchises to own

Dunkin’, formerly known as Dunkin’ Donuts, is a popular fast-food franchise specializing in coffee, donuts, bagels, and breakfast sandwiches. The franchise has expanded its menu to include other beverages, baked goods, and sandwiches. 

Dunkin’ is known for its focus on convenience, offering drive-thru and on-the-go options. It has a strong brand presence in the United States and a growing international presence. Dunkin’s profitability is driven by its loyal customer base, breakfast-focused menu, and continuous innovation.

#5. Taco Bell

most profitable fast food franchises to own

Taco Bell is a fast food franchise known for its Tex-Mex cuisine, particularly its tacos, burritos, and nachos. The franchise offers a variety of menu items with bold flavors and customizable options. Taco Bell’s success lies in its ability to adapt to changing consumer tastes and preferences. 

It has a strong late-night presence, catering to customers seeking affordable and convenient options. Taco Bell has a widespread presence in the United States and is expanding internationally, contributing to its profitability.

#6. Chick-fil-A

most profitable fast food franchises to own

Chick-fil-A is a highly successful fast-food franchise recognized for its chicken sandwiches, nuggets, and waffle fries. The franchise is known for its commitment to quality, customer service, and closed-on Sundays policy. 

Chick-fil-A has a loyal customer base and a strong focus on community involvement. Despite operating fewer hours than its competitors, Chick-fil-A has achieved remarkable profitability through high sales per restaurant and effective marketing strategies.

#7. Pizza Hut

most profitable fast food franchises to own

Pizza Hut is a well-established fast-food franchise specializing in pizza and Italian-American cuisine. Pizza Hut has a global presence in numerous countries, known for its variety of pizza offerings, including stuffed crust and pan pizzas. 

In addition to pizza, the franchise also offers pasta, wings, and desserts. Pizza Hut’s profitability stems from its delivery and carryout services, diverse menu options, and brand recognition.

#8. Burger King

most profitable fast food franchises to own

Burger King is a well-known fast-food franchise that specializes in flame-grilled burgers. With its extensive menu offering a variety of burgers, chicken sandwiches, fries, and other fast food items, Burger King has established itself as a global brand. 

The company has a strong presence in the fast food industry, with numerous locations worldwide. Burger King’s success can be attributed to its distinctive marketing campaigns, innovative menu items, and strategic partnerships.

#9. Dairy Queen

most profitable fast food franchises to own

Dairy Queen is a fast food franchise famous for its soft-serve ice cream and blended treats. Along with its ice cream offerings, Dairy Queen also serves a range of fast food items such as burgers, hot dogs, and chicken baskets. 

The franchise has built a loyal customer base by providing a unique combination of ice cream treats and savory options. Dairy Queen’s success is also supported by its strong brand recognition and ability to adapt to changing consumer preferences.

#10. Popeyes

most profitable fast food franchises to own

Popeyes is a fast-food franchise that specializes in Southern-style fried chicken. Known for its flavorful and spicy chicken, Popeyes has gained popularity among fast-food enthusiasts. 

The franchise offers a menu that includes chicken, seafood, sandwiches, and various side dishes. 

Popeyes’ success can be attributed to its focus on high-quality ingredients, unique flavor profiles, and its ability to capture the essence of Louisiana-style cooking.

#11. Wendy’s

most profitable fast food franchises to own

Wendy’s is a fast food franchise widely recognized for its square-shaped hamburgers and signature Frosty desserts. Wendy’s menu also includes chicken sandwiches, salads, and a variety of sides. 

The franchise differentiates itself by emphasizing fresh, never-frozen beef and high-quality ingredients. 

Wendy’s has also gained attention for its witty and engaging social media presence, contributing to its brand recognition and customer loyalty.

#12. Jimmy John’s

most profitable fast food franchises to own

Jimmy John’s is a fast food franchise specializing in gourmet sandwiches made with fresh ingredients and delivered quickly. The franchise has gained popularity for its “freaky fast” delivery service, offering customers a convenient and efficient way to enjoy their sandwiches. 

Jimmy John’s menu includes a variety of subs, clubs, and wraps made with premium meats and freshly baked bread. 

The franchise’s success can be attributed to its emphasis on speed, quality ingredients, and commitment to providing a consistent customer experience.

#13. Arby’s

most profitable fast food franchises to own

Arby’s is a fast food franchise well-known for its roast beef sandwiches and slogan, “We have the meats.” Arby’s menu includes a range of sandwiches featuring roast beef, turkey, ham, and other deli meats, as well as salads, sides, and desserts. 

The franchise has positioned itself as a high-quality, meat-centric fast food option provider, appealing to customers seeking a more substantial meal. 

Arby’s success is driven by its unique menu offerings, focus on quality ingredients, and ability to differentiate itself within the fast food industry.

#14. Domino’s

most profitable fast food franchises to own

Domino’s is a fast-food franchise that specializes in pizza delivery and takeout. Known for its commitment to speed and convenience, Domino’s has built a strong customer base. 

The franchise offers a variety of pizza options, as well as pasta, chicken wings, and other side items. Domino’s success can be attributed to its efficient delivery service, innovative ordering systems, and consistent product quality. 

The company has also embraced technology, allowing customers to place orders through various platforms, including mobile apps and voice-activated devices.

#15. Five Guys

most profitable fast food franchises to own

Five Guys is a highly profitable fast-food franchise known for its delicious burgers and fries. With its simple yet high-quality menu offerings, Five Guys have gained a strong following and have expanded rapidly since its founding in 1986. 

The franchise’s success can be attributed to its commitment to using fresh ingredients, offering customizable options, and providing excellent customer service. 

Five Guys have capitalized on the growing demand for quality fast food, making it a popular choice for burger lovers worldwide. 

Factors that Contribute to the Profitability of Fast Food Franchises?

Several factors contribute to the profitability of fast-food franchises. Consider the following important factors: 

#1. Location

One of the most significant contributors to the profitability of a fast-food franchise is undoubtedly its location. The ideal spot for a fast-food chain is typically in high-traffic areas such as shopping malls, train stations, and airports. 

When a franchise secures an excellent location, it can take advantage of foot traffic, visibility, and access to transportation.

#2. Quality of food and service

Customers come to fast-food establishments with certain expectations – quick and tasty food. Therefore, fast-food franchises must prioritize quality, consistency, and cleanliness regarding food and service. 

The menu should be simple, and the ingredients must be fresh. In addition, excellent customer service helps to build trust and loyalty among patrons, encouraging them to return.

#3. Brand reputation and marketing

Marketing is critical in the fast-food industry. Successful franchises create a strong brand identity that is recognizable, trustworthy, and likable. They use catchy slogans, unique packaging, and memorable advertising to stay top of mind and differentiate themselves from their competition.

#4. Economies of scale and efficient operations

Fast food franchises operate on a tight profit margin. However, purchasing in bulk, maintaining standardized processes, and utilizing economies of scale can help improve profitability. By streamlining operations, franchises can reduce costs while providing a better customer experience.

#5. Franchisee and corporate relationships

Finally, strong relationships between franchisees and the franchisor are vital for success. When franchises work with corporate management, they can improve brand quality, share best practices, and solve problems efficiently.

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What is the Average Income for Fast Food Franchise Owners?

The average income for fast food franchise owners can vary significantly depending on various factors such as the specific franchise brand, location, operating costs, and individual business performance. 

Providing an exact average income figure is challenging because fast food franchises range from small single-unit operations to large multi-unit franchises.

In general, fast-food franchise owners can expect to earn a profit based on their revenue minus expenses, including rent, labor, food, marketing, and royalty fees paid to the franchisor. 

According to a report by Franchise Business Review, the average pre-tax income of franchisees in the fast food sector was around $82,000 in 2019. However, it’s important to note that this figure is an average, and individual results can vary widely.

Successful fast-food franchise owners who manage multiple locations and operate well-known brands may earn significantly higher incomes. On the other hand, owners of smaller or less profitable franchises may earn lower incomes. 

It’s essential to conduct thorough research, consult with existing franchise owners, and carefully evaluate the specific franchise opportunity to get a more accurate estimate of potential income.

How Much Does It Cost To Start A Fast Food Franchise?

The costs of starting a fast food franchise can vary significantly depending on several factors, including the brand, location, size of the restaurant, and specific requirements of the franchisor. 

Here are some common costs associated with starting a fast-food franchise:

Franchise Fee

This is an upfront, one-time payment to the franchisor for the right to operate a franchise under their brand. Franchise fees can range from a few thousand dollars to several hundred thousand dollars, depending on the popularity and reputation of the brand.

Equipment and Furnishings

You must purchase kitchen equipment, furniture, signage, and other necessary items to set up your fast-food restaurant. Costs for equipment can vary depending on the size and complexity of the restaurant, but they typically range from tens of thousands to hundreds of thousands of dollars.

Leasehold Improvements

If you rent a commercial space, you may need certain modifications and renovations to meet the franchisor’s requirements and local building codes. The costs for leasehold improvements can vary widely based on the condition of the space and the extent of the renovations required.

Real Estate

If you plan to purchase a property for your fast food franchise, the costs will include the purchase price or down payment, as well as any associated legal fees and closing costs.

Initial Inventory and Supplies

You must purchase an initial stock of food, beverages, packaging materials, cleaning supplies, and other operational items. The cost will depend on the restaurant’s size and the franchisor’s specific requirements.

Training and Support

Some franchisors provide training programs for new franchisees, but additional costs may be associated with attending these programs, such as travel and accommodation expenses.

Marketing and Advertising

As a franchisee, you may be required to contribute to the franchisor’s marketing and advertising fund. The amount can vary but is typically a percentage of your sales.

Working Capital

It’s essential to have enough working capital to cover the ongoing expenses of the business, such as rent, utilities, payroll, and other operating costs until the business becomes profitable. The amount required will depend on various factors, including the size of the franchise and local market conditions.

It’s important to note that the costs mentioned above are just general categories, and the actual expenses can vary significantly based on the specific franchise opportunity you pursue. 

It’s recommended to thoroughly review the franchise disclosure document (FDD) provided by the franchisor, as it will provide detailed information about the costs involved in starting and operating the franchise. 

Additionally, consulting with a franchise attorney or a financial advisor can help you assess the financial aspects and make informed decisions.

Also, read – How To Start A Candle Business As A Retailer Or Merchant | 2023 Guide

Are Fast Food Franchises Profitable In Nigeria?

Fast food franchises are increasingly gaining traction in Nigeria, but the question remains – are they truly profitable? As the largest economy in Africa, Nigeria presents itself as a viable market for the global fast-food industry, which has seen steady growth in recent years.

While the rise of fast food in Nigeria has been fuelled by factors such as rapid urbanization, changing lifestyles, and increasing disposable income, there are a few factors to consider before deciding if fast food franchises are profitable.

Overall, fast food franchises can be profitable in Nigeria, but this depends on several factors, such as market demand, competition, infrastructure, marketing, and quality of products and services. Investing in fast food franchises is not for the faint-hearted, but for those willing to put in the work and investment, the rewards can be great.

How to Start a Profitable Fast Food Franchise

Fast food franchises are one of the most profitable and lucrative businesses. People are always on the go, and fast food provides a quick and easy meal to enjoy on the run. 

But how can you start a profitable fast-food franchise? Here are some guidelines to help you get started.

Research the Market

The first step to starting a fast-food franchise is to research the market. This involves discovering which fast food chains are popular in your area, the competition, and what consumers want.

Choose a Franchise

Once you have researched, you need to choose a fast-food franchise to invest in. Choose a brand that is well-established, has a good reputation, and offers a product that is in high demand.

Find a Suitable Location

Location is crucial when it comes to running a fast-food franchise. Find a location that is easily accessible, has high foot traffic, and is in a popular shopping district.

Secure Financing

Starting a fast food franchise requires a considerable investment. You need to secure financing through a bank or a financial institution to cover the startup costs, including the franchise fee, equipment, inventory, and leasing costs.

Set Up the Store

Once you have secured the financing and chosen the location, it’s time to set up the store. This includes renovating the space, purchasing the necessary equipment, hiring employees, and creating a menu.

Marketing and Promotion

Finally, you must market and promote your fast-food franchise to attract customers. This can be done through various means, such as social media, flyers, and promotions. A grand opening event is also a great way to attract attention and generate excitement.

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Challenges in Owning a Fast Food Franchise 

Aspiring entrepreneurs often find themselves considering the fast food industry for business ownership. It’s a popular business model well known for its revenue generation potential, especially compared to other business models. 

While the business is rewarding and can bring a steady cash flow, it also comes with several challenges. 

Here are the challenges of owning a fast food franchise and how you can prepare yourself for them.

Financial Risk

One of the significant challenges of owning a fast-food franchise is the financial risk that comes with it. Most fast-food franchise models come with an expensive price tag. Entrepreneurs must be prepared to handle significant financial investments from the get-go. 

Aside from initial investments, fast food franchises can also come with other financial burdens, including rent, insurance, employee salaries, and equipment upgrades.

Intense Competition

The fast food industry is saturated with many competitors offering a similar service and menu. The industry is highly competitive, which makes it challenging to maintain a competitive edge. 

Business owners must learn how to keep up with changing industry trends, and this can be done by innovating and expanding their menu or business strategy.

Employee Retention

Fast food businesses rely on a team of employees to ensure daily operations run smoothly. High employee turnover rates can negatively impact the franchise. 

Finding quality employees and retaining them can be challenging. A lack of adequate staff can result in decreased efficiency and ultimately hurt the business’s bottom line.

Legal Obligations

Owning a fast food franchise requires compliance with state and federal laws that govern the food industry. Some of the legal obligations can include minimum wage laws, safety regulations, food preparation laws, and more. Failure to meet legal requirements can result in hefty fines or lawsuits.

Managing Customer Expectations

In today’s world, customers demand exceptional service and products. In the fast food industry, where service is swift, ensuring quality, accuracy, and timely service can be a challenge. Customers expect a seamless experience, and flaws in this process can have negative consequences.

Frequently Asked Questions

Which fast food franchise is the most profitable to own?

There is no definitive answer to this question, as a franchise’s profitability depends on several factors, such as location, market demand, and franchise fees. However, some of the most successful and profitable fast food franchises include McDonald’s, Subway, Dunkin’ Donuts, Taco Bell, and Pizza Hut.

What makes these franchises so profitable?

One of the key factors contributing to these franchises’ profitability is their well-established brand recognition. Customers are often drawn to these chains because they are familiar with the food quality and service they provide. 

What are the risks associated with owning a fast-food franchise?

As with any investment, there are risks associated with owning a fast-food franchise. These may include changes in consumer demand, increased competition, and economic fluctuations. 

Conclusion

In conclusion, the fast food industry is a lucrative and dynamic sector, offering numerous opportunities for aspiring entrepreneurs and investors. While several successful and profitable fast-food franchises are available, a few stand out as particularly attractive options.

Ultimately, the most profitable fast-food franchise to own depends on various factors, including personal preferences, investment capabilities, and market conditions. 

Thorough research, careful analysis, and consultation with industry experts are crucial steps in making an informed decision and maximizing the potential for success in this ever-growing and competitive market.

Reference

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