Burger King Franchise Cost & Fees
Date of Incorporation: 1956
Franchising Since: 1956
Headquarters: Miami, Florida
Business Description: Burger King Corporation (BKC), the franchisor, offers franchises in the United States. Burger King franchisees operate quick-service hamburger restaurants using certain trademarks, service marks and trade names, and a recognized design, equipment system, color scheme and styles of buildings and facilities, signs, certain standards, specifications and procedures of operation, quality and consistency standards for products and services offered, and procedures for inventory control and management. BKC is a wholly-owned subsidiary of Burger King Worldwide, Inc., which is an indirect subsidiary of Restaurant Brands International.
Franchise Offer: The franchisor currently has three different forms of franchise agreement, corresponding to three different types of franchise ownership: Individual (or Owner/Operator); Entity; and Corporate. The franchise granted can be operated at one of three locations and facility types:
- Institutional Locations: "Institutional locations" include government buildings and facilities, medical facilities, airports, train and bus stations, sports facilities, factories, corporate campuses, turnpikes, limited access toll roads, theme parks, zoos and educational facilities.
- Traditional Burger King Restaurant Facility: A self-contained, full size Burger King Restaurant which is located and operated on a site as a freestanding building or within another building structure such as a shopping mall. A Traditional Burger King Restaurant does not share any common areas with any other businesses and serves the standard approved menu for Burger King Restaurants.
- Non-Traditional Burger King Facility: A Burger King Restaurant may be located at a site which includes other businesses, such as retail, food service, gas stations, convenience stores, other franchised businesses or restaurants or other similar facilities.
Financial Assistance: The franchisor offers real estate leases and remodeling programs to franchisees. The franchisor may from time to time provide financing for certain types of transactions as well. Additionally, franchisees may be eligible for expedited and streamlined SBA loan processing through the SBA's Franchise Registry Program. The franchisor does not currently receive any payments from unaffiliated lenders because of placement of financing with them.
Training and Assistance: Before the opening of the Restaurant, franchisees must successfully complete the franchisor's training program. The training program is held in Miami, Florida or other locations specified by the franchisor. In-Restaurant Training will be held in various Restaurant locations that have been authorized as Training Restaurants. The franchisor may require additional training programs for individual Owner/Operators or Managing Directors to implement current operations, standards, and procedures and to facilitate the growth and changes of the franchisee. The franchisor also makes available and sometimes requires periodic workshops and seminars for managers, which include management courses and updating of operational skills. The franchisor will provide Pre-opening and Restaurant opening assistance as it deems appropriate. The franchisor also provides continuing operations training programs, which a franchisee (as an Operating Partner, Managing Director, Director of Operations, or Managing Owner, as applicable) may be required to attend. For certain training courses, franchisees must pay a course or materials fee to the franchisor or third parties. The franchisor may make changes and revisions to the training program, locations or materials at any time.
Territory: The Franchise Agreement grants the right to operate the Burger King Restaurant at a specific location only. The Franchise Agreement does not grant or imply any type of area or territory, exclusive, protected or otherwise, or protected customer base. However, if the franchisor grants the franchisee the right to offer delivery service, it will specify a Delivery Area in which the franchisee can offer these services.
Term of Agreement and Renewal: The length of the franchise term is 20 years for a freestanding restaurant, and may be less for non-traditional locations or where property control is for a shorter period. There is no right of renewal. There is an option to obtain a Successor Franchise Agreement up to 20 years if the franchisee is in compliance with Franchise Agreement and with all other agreements with the franchisor.
Obligations and Restrictions: The requirements for personal participation in the operation of the business differ for the 3 types of ownership, as reflected in the forms of Franchise Agreements used for them. Franchisees must sell only those goods and services that the franchisor authorizes them to sell.
Estimated Number of Units: 15,000
|Name of Fee||Low||High|
|Travel and Living Expenses while Training||$0||$25,000|
|Real Property/ Occupancy Charge||$300,000||$750,000|
|Civil & Architectural Drawings / Professional Fees||$25,000||$45,000|
|Improvements / Construction||$550,000||$900,000|
|Signage & Drive-Thru||$60,000||$215,000|
|Cash and Inventory Control System||$35,000||$50,000|
|Working Capital / Additional Funds||$45,000||$90,000|
|Business Licenses, Utility Deposits, Lease Deposits, and Payments||$10,000||$20,000|
|2-Story Interior Playground||$0||$245,000|
|Type of Fee||Amount|
|Royalty||4.5% of monthly gross sales.|
|Advertising||4% of monthly gross sales.|
|Rent (where property leased from he franchisor)||Varies.|
|Building Improvement Payments (certain BKLs only)||$500 per month.|
|Late charges/ Interest/ Stamp tax||Lesser of 18% per annum or maximum rate allowed by Florida law.|
|Transfer of Interests||$2,000|
|Application Fee||$250 - $5,000|
|New Franchisee Training Fee||$2,000|
|Entity or LLC Fees||Up to $5,000 per Entity; plus up to $1,000 per restaurant transferred to Entity or LLC.|
|Franchise Extension Fee||$2,500 annually.|
|Investment Spending (marketing)||Collectively agreed upon amount.|
|Sales Transfer Study||Minimum $5,000; Maximum $8,000; Average $5,800 - Per potentially affected Restaurant.|
|Sales Impact Contribution||Varies.|
|Gift Card Services||Varies.|
|BK GURU / Daily Planner Subscription Fee||$350 annually.|
|Miscellaneous Reimbursements, Purchases, Services||Varies.|
|One Time Cure Fee||Varies depending upon whether franchisee is under the TRA or the MTRA.|
|MTRA Default Payments||Monthly amount equal to $2,000 multiplied by the number of new Restaurants the franchisee fails to timely open under the MTRA the franchisee signs in connection with the purchase from the franchisor of franchisor-owned Restaurants.|
|Remodel Default Payments||Monthly amount equal to $4,000 multiplied by the number of Restaurant remodels that the franchisee fails to timely complete in connection with the purchase from the franchisor of those franchisor-owned Restaurants.|
|Deferred Remodel Default Payments||Royalty rate increases to 6% if franchisee fails to complete the remodel to the franchisor’s specifications by the date specified in the addendum to the Franchise Agreement. Royalty increases to 5.5% from the remodel due date until the date the franchisor confirms that the remodel meeting specifications is complete.|
|Audit Expenses||Will vary under circumstances.|
|Indemnity||Will vary under circumstances.|
|Costs and Attorneys' Fees||Will vary under circumstances.|
|Background Check Fee||$3,800 - $8,000|
|BK McLamore Foundation Scholarship||$1,000 per restaurant per year.|
The above information has been taken from the FDD of Burger King. Year of FDD: 2016
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