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Burger King Franchise Cost & Fees

Date of Incorporation: 1956

Franchising Since: 1956

Headquarters: Miami, Florida


Business Description: Burger King Corporation (BKC) operates and grants franchises to 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.


Franchise Offer: BKC 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:

  1. 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.
  2. 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.
  3. 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: BKC offers real estate leases and remodeling programs to franchisees. BKC 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 BKC's training program. The training program is held in Miami, Florida or other locations specified by BKC. In-Restaurant Training will be held in various Restaurant locations that have been authorized as Training Restaurants. BKC 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. BKC also makes available and sometimes requires periodic workshops and seminars for managers, which include management courses and updating of operational skills. BKC will provide Pre-opening and Restaurant opening assistance as it deems appropriate. BKC 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 BKC or third parties. BKC 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 BKC.


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 BKC authorizes them to sell.


Total Number of Units: 13,260

 

Investment Tables:

Initial Investment

For the Edge-60 Building Type (Several Other Building Options, Smaller and Larger, Available in FDD)

Name of Fee Low High
Franchise Fee $50,000 $50,000
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
Zoning Expenses $5,000 $25,000
Improvements / Construction $550,000 $900,000
Landscaping $25,000 $55,000
Equipment $193,600 $244,600
Decor Package $40,000 $75,000
Signage & Drive-Thru $60,000 $115,000
Pre-Opening Wages $52,000 $56,000
Opening Inventory $6,000 $8,000
Cash and Inventory Control System $35,000 $50,000
Insurance $14,000 $22,000
Working Capital / Additional Funds $45,000 $90,000
Business Licenses, Utility Deposits, Lease Deposits, and Payments $10,000 $20,000
Estimated Total
$1,410,600 $2,530,600

 

Ongoing Fees:

Name of Fee Amount
Royalty 4.5% of monthly gross sales
Advertising 4% of monthly gross sales
Rent (where property leased from BKC) 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 $6,400 - Per potentially affected Restaurant
Sales Impact Contribution Varies
Gift Card Services Varies
Miscellaneous Reimbursements, Purchases, Services Varies
Walk-Thru $500
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 BKC-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 BKC-owned Restaurants.
Scholarship Funding $1,000 per Restaurant per year if the franchisee purchases BKC-owned Restaurants from the franchisor.
Audit Expenses Will vary under circumstances
Indemnity Will vary under circumstances
Costs and Attorneys' Fees Will vary under circumstances

Date of FDD: 2013

The above information has been compiled from the FDD of the Burger King along with online sources.

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