Burger King franchising

Burger King franchise

Burger King Company LLC is the franchisor. The franchisor is a wholly-owned indirect subsidiary of Restaurant Brands International Limited Partnership. Burger King franchisees operate quick-service hamburger restaurants offering a limited menu of breakfast, lunch and dinner products. The franchisor operates and grants franchises to operate Burger King 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.

The franchisor currently has two different forms of franchise agreement, corresponding to three different types of franchise ownership: individual (or owner/operator) and entity. The franchise granted can be operated at the following facility types:

  1. 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.
  2. Non-Traditional Burger King Facility: A non-traditional 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.
  3. 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.
  4. Delivery: A restaurant operated at a food preparation and cooking facility located within a building or other enclosed structure, which may also include other food service concepts or restaurants. This facility will have a limited menu and is established for the preparation of meals for delivery or pickup only.
Burger King franchise
  1. Training Overview: 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 will provide pre-opening and restaurant opening assistance as it deems appropriate. 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 also will provide continuing operations training programs, which the operating partner, managing director, director of operations, or managing owner (as applicable) may be required to attend.

Territory Granted: 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.

Obligations and Restrictions: The requirements for personal participation in the operation of the business differ for the two types of ownership, as reflected in the forms of Franchise Agreements used for them. Franchisees must use the restaurant solely for the operation of a Burger King restaurant and must keep the restaurant open and in normal operation for the minimum hours and days as the franchisor specifies in the Franchise Agreement or otherwise in writing. Franchisees must offer for sale and sell at the restaurant all and only those products and services as are expressly authorized by the franchisor in the manual or otherwise in writing and only in accordance with the franchisor’s specifications and standards.

Term of Agreement and Renewal: The length of the initial 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.

Financial Assistance: If the franchisor owns or leases the land or the land and building of the restaurant, it may lease or sublease the location to the franchisee. In addition, the franchisor has entered into an agreement with Auxilior Capital Partners, Inc., a third-party equipment lender, under which Auxilior will offer financing of approximately $1 million to its franchisees to finance the cost of the purchase of equipment. Neither the franchisor nor its affiliates receive any consideration for placing financing with this lender.

Investment Tables:

Name of FeeLowHigh
Franchise Fee$2,500$50,000
Travel and Living Expenses while Training$7,500$25,000
Real Property/ Occupancy Charge$3,500$1,500,000
Civil & Architectural Drawings / Professional Fees$0$100,000
Zoning Expenses$0$25,000
Improvements / Construction$0$1,600,000
Landscaping$0$60,000
Equipment$85,000$304,600
Decor Package$0$95,000
Signage & Drive-Thru$0$186,000
Pre-Opening Wages$29,400$72,500
Opening Inventory$5,400$12,800
Cash and Inventory Control System$35,000$100,000
Insurance$14,000$25,000
Working Capital / Additional Funds$40,000$90,000
Business Licenses, Utility Deposits, Lease Deposits, and Payments$10,000$30,000
2-Story Interior PlaygroundN/A$245,000
ESTIMATED TOTAL*$232,300$4,520,900

<small>*The estimated initial investment range covers from a delivery restaurant type up to a freestanding traditional restaurant type.</small>

Type of FeeAmount
Royalty4.5% of monthly gross sales.
Advertising4% of monthly gross sales.
Rent (where property leased from he franchisor)Varies.
Building Improvement Payments (certain BKLs only)$500 per month.
Service Desk Fee $190-$240 per year per restaurant. 
Late Charges/ InterestLesser of 18% per annum or maximum rate allowed by Florida law.
Stamp Tax Currently $0.35 per $100. 
Transfer of Interests$2,000 for the first restaurant and $500 for each additional restaurant.
$175 additional transfer fee per restaurant for transfers occurring on the weekend.
Intercreditor Agreement (if the franchisor agrees to sign): $2,000.
Application Fee$250 per individual applicant. Up to $5,000 per entity applicant.
Training Fees Currently, $7,500 for the first person and $3,000 for each additional person. 
New Franchisee Training FeeCurrently, $7,500.
Entity or LLC FeesUp 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)Up to 2% of gross sales.
Sales Transfer Study$2,600 – $8,000 per restaurant.
Sales Impact ContributionVaries.
Gift Card ServicesSet up fee: $40 for each restaurant. Transaction Fee: Estimated 1.8% of any redeemed sales, may increase or decrease no more than one time per year, the minimum and maximum Transaction Fee will be 0.5% and 3.5% of redeemed sales, respectively.
BK LINK/Support & Training Material$600 annually.
Digital App License FeeCurrently $0.30 per digital transaction.
Static Menu Board Kit $200 to $300 per month. 
Miscellaneous Reimbursements, Purchases, ServicesVaries (typically up to $25,000 per person depending on course, material, and travel expenses).
Follow Up Walk-Thru$1,500
One Time Cure FeeTRA: $10,000
MTRA: Balance of the franchise fee multiplied by the number of restaurants not developed pursuant to the schedule.
Remodel Default PaymentsMonthly 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 PaymentsRoyalty rate increases to 6% or 7.5% if franchisee fails to complete the remodel to the franchisor’s specifications by the date specified in the agreement.
Audit ExpensesCost of audit.
IndemnityThe losses and expenses the franchisor incurs.
Costs and Attorneys’ FeesWill vary under circumstances.
Background Check Fee$280 – $15,000
Burger King Foundation Scholarship$1,000 per restaurant per year.

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