10 Top Restaurant Franchises in America And How Much They Cost

What Makes Food Franchises a Good Investment?

For those considering investing in a franchise business, but are undecided about what kind of franchise to opt for, food franchises are a good bet. Let's look at some of the factors that make food franchises a particularly good investment. First and foremost, the entry barriers for getting into the restaurant business are relatively low for franchisors. This makes food franchises an attractive option for those looking to get into the foodservice industry, but have limited experience. Food franchises offer customers consistency and predictability, which goes on to build brand loyalty and a solid customer base over time.

Another key advantage of investing in food franchises is that there is always a demand for new restaurants. While other businesses may come and go, with changes in the economy or consumer preferences, people will always want to eat good food. This provides a level of stability and security for your investment that you might not find in other industries.

Of course, no investment is without risk and food franchises are no exception. In order to succeed with food franchises, you'll have to do your homework on potential locations, carefully select experienced and reputable operators, and have a clear understanding of the costs involved. But if you're looking for a proven business model with strong potential returns, a food franchise could be the right choice for you.

What You Need to Open a Restaurant Franchise

Opening a restaurant franchise can be a great way to get started in the foodservice industry. But there are a few things you'll need to do before you can begin.

• Starting a food franchise establishment demands some initial investment, as you will have to obtain the rights for the franchisor's name and logo. You will also need to pay an ongoing royalty fee to the franchisor, as well as a marketing fee that helps promote the brand.
• In addition, you will need to have sufficient capital at hand to cover the cost of leasing or purchasing commercial space, outfitting it with appliances and decor along with hiring a workforce to run the establishment.
• Some franchises also require you to be of a certain age and have prior experience in the restaurant industry or Franchise Management before they approve you for a franchise agreement.
• But firstly, you'll have to find a franchisor who is interested in signing a deal and one that suits your purpose. There are many different franchisors out there, so it's important to do your research and make sure you choose one that's a good fit for you.
• Once you've found a franchisor, you'll need to fill out an application and submit it to them. If your application is approved, you'll be able to sign a franchise agreement and begin the process of opening your restaurant franchise.

10 Top Restaurant Franchises- No. 1 Papa John's

Papa John's is an American pizza restaurant chain that is now the fourth largest pizza delivery business in the United States and the third largest in the world. Papa John's is spread across 49 countries, with 5,500 pizza delivery outlets, since its inception in 1984. It is primarily a pizza delivery and takeout service, although few outlets do offer limited dine-in services as well.

The award-winning pizza delivery chain has now started offering generous investments to increase its franchises, including financial benefits and discounts, and credit on the fees. Papa John's offers new ovens to all new franchise owners, along with a discounted royalty fee for the initial six years of the deal. For the first six years, franchise owners can avail $3,000 food credit and a $5,000 marketing budget. The pizza chain also waives the franchise fee for the first few years to boost the sales and operations of new outlets, which has made Papa John's a popular choice among restaurant franchise owners.

Initial investment- $300,000

Royalty fee- 5% of net sales

Top Restaurant Franchises- No. 2 Denny's

Denny's is a table service restaurant that has established over 1,700 franchise units across the United States, Canada, the United Kingdom, and other countries, since it began franchising in 1963. Denny's started its operations as a coffee shop but has now evolved into a favorite diner that serves all meals in a restaurant style. The Denny's franchise outlets do not shut operations on holidays and are known to remain open 24 hours, throughout the year. Most of these outlets are found near freeway exits or bars and service areas.

The business has nearly 1,600 franchise outlets that are operational in the United States, while it has 60 in Canada and few others in the UK, New Zealand, El Salvador, and other countries.

Initial investment- $228,000 to $2,500,000

Royalty fee- 4.5%

Top Restaurant Franchises- No. 3 Taco Bell

Taco Bell is a US-based chain of fast food restaurants that specializes in dishes inspired by Mexican cuisine, such as tacos, nachos, burritos, and quesadillas. Taco Bell has over 7,000 restaurants spread across the world with 93% of these being franchise outlets. In 1978, PepsiCo purchased Taco Bell from its founder Glen Bell and turned it into a subsidiary business of Yum! Brands.

Taco Bell doesn't make information about its franchise opportunities public. But if you are interested in pursuing an outlet of the Mexican cuisine chain, you can request the company for more details.

Initial investment- $525,00 to $2.8 million

Royalty fee- 5.5%

Top Restaurant Franchises- No. 4 KFC

Over the years, KFC has established itself as an iconic brand with the face of its founder, Colonel Sanders, attaining cult status not just in the United States but the world over. It is one of the most popular fried chicken brands in the world, second only to McDonald's as the world's largest restaurant chain (in terms of sales). An estimated 185 million Americans are said to watch KFC commercials once a week, making it a formidable brand that almost guarantees success for its franchise outlets. As of 2019, KFC had established its fast food outlets across 150 countries.

KFC evaluates its franchise applicants on their financial qualifications, personal and financial reputation, experience in Restaurant Management or in operating multiple units, commitment and awareness of the brand's culture, and growth mindset. Among the financial requirements that KFC demands, a franchise applicant has to have a net worth of $1.5 million, with $750,000 in liquid assets.

Initial investment- $1.4 million to $2.7 million

Royalty fee- 5%

Top Restaurant Franchises- No. 5 McDonald's

McDonald's is the leader. Topping the chart of the world's most popular and biggest restaurant chains, it beats KFC and the like with sheer numbers. It has established over 36,000 franchise units since it began franchising in 1955. In the U.S. market, 90% of McDonald's outlets are franchises. The company says most of these owners are either women, or from minority communities.

In 1940, Richard and Maurice McDonald first started a restaurant business in San Bernardino, California, which they later turned into a hamburger stand. This was later reinvented as a franchise business that now serves 69 million customers every day, across 100 countries. If you wish to become a part of this mammoth restaurant chain, you need to have a net worth of more than $464,500 and at least $500,000 in liquid assets. You also need to be able to bear the real estate costs, costs of licenses and permits, and so on. Franchise owners must also show prior business experience that would help manage an establishment the scale of McDonald's.

Initial investment- $1,314,000 to $2,313,000

Royalty fee- 4%

Top Restaurant Franchises- No. 6 Pizza Hut

Among all the pizza chains in the world, Pizza Hut has established itself as the largest with over 18,000 operational units spread across countries. Pizza Hut was founded by two brothers in 1958, who opened a small pizza shop in Kansas. Within six months they managed to open a second outlet, and in a year, they had six. Over the years, Pizza Hut has established different styles of outlets. While some are family-style dine-in restaurants, others have takeout and storefront delivery formats.

Pizza Hut requires its potential franchisees to possess a net worth of $700,000 and another $350,000 in liquid assets. You must also have a strong credit report and furnish a detailed financial plan of how you intend to grow your business.

Initial investment- $357,000 to $2.2 million

Royalty fee- 6.5%

Top Restaurant Franchises- No. 7 Popeyes Louisiana Kitchen

Popeyes Louisiana Kitchen, also known as Popeyes, is a U.S.-based fried chicken and fast food restaurant chain that was founded in New Orleans, Louisiana. Popeyes has established over 5,000 outlets in the U.S. and a few other countries like Mexico, Canada, Qatar, and Saudi Arabia. With a revenue of over $3.3 billion (2021), Popeyes is one of the most successful franchise restaurants in the United States.

Popeyes' fast food franchises are known to have one of the most successful growth models in the business. This has made the brand a comfortable choice among franchise owners. In order to start a Popeyes outlet, you must have a net worth of more than $383,000, along with the capacity to bear the additional expenses of real estate, equipment, licenses, permits, and other overhead costs.

Initial investment- $383,000 to $3,545,000

Royalty fee- 5%

Top Restaurant Franchises- No. 8 Dairy Queen

Dairy Queen is an American chain of ice-cream and fast food restaurants with over 6,800 franchise restaurants established across the United States and 28 other countries. It has over 4,400 food franchises in the U.S. alone.

Before he had a store of his own, Dairy Queen founder John Fremont McCullough or 'Grandpa' convinced a friend to keep his soft-serve ice-cream at his store. On the first day itself, 1,600 servings were sold in two hours. The two went on the open the first Dairy Queen outlet in 1940 and served soft-serve ice-creams, among other frozen offerings.

As of 2017, Dairy Queen posted a revenue of $3.64 billion and established itself across 27 countries, outside of the U.S. and Canada. If you are looking for a franchise outlet to sell ice-cream and other frozen products, Dairy Queen may be just the right choice. To be able to buy a franchise, you need to have $400,000 in liquid assets and show prior experience in restaurant management.

Initial investment- $1 million - $1.8 million

Royalty fee- 4%

Top Restaurant Franchises- No. 9 Cinnabon

Cinnabon is an American restaurant chain that serves baked goods, desserts and its signature item, the cinnamon roll. Its kiosks and stores are spread across the U.S. and 48 other countries. While Cinnabon has spread far and wide, there are yet a few states in the U.S. that this brand has yet to reach and if you wish to take it to Maine or Rhode Island for example, here's your chance.

To own a Cinnabon franchise outlet, you would need at least $120,000 in liquid capital, along with another $300,000 in total net worth. There are a few other eligibility criteria such as prior experience in handling a bakery business, a positive financial reputation and a good credit report.

Initial investment- $181,000 to $340,000

Royalty fee- 6%

Top Restaurant Franchises- No. 10 Auntie Anne's

Auntie Anne's is an American chain of pretzel shops that offers freshly baked pretzels and beverages across its 1,200 locations in and outside the United States. Anne F. Beiler and her husband Jonas established their first shop as a stall at a farmers' market in 1988. Since then, their pretzels have spread to shopping malls, train stations and street corners in over 25 countries. Auntie Anne's now has over 600 international locations. The company earned a total revenue of more than $500 million in 2020.

If you're eyeing an Auntie Anne's franchise, you will have to meet a few prerequisites, such as having a net worth of $300,000 and another $100,000 in liquid assets. Additionally, you would also need prior experience in the restaurant industry or fast food business, and customer service skills. You also need to align with the company's philanthropic culture.

Initial investment- $199,000 to $385,000
Royalty fee- 7%