For entrepreneurs interested in the fast food industry, picking a profitable franchise is key to success. Certain major fast food brands stand out for high unit volumes, margins, and return on investment. Here is an overview of some of the most financially rewarding fast food franchises based on gross sales, profitability, and investment opportunity.
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Highest Grossing Fast Food Franchises
Measured by average unit volumes, the top grossing fast food franchises include:
Chick-fil-A
- Average unit volume: $4.5 million
- Unit Count: ~2,600
- Initial Investment: $343k – $2.3m
Chick-fil-A leads QSR brands in per unit sales thanks to its raving fans. Operators must commit to a hands-on owner-operator model. Store profit margins are exceptionally high.
McDonald’s
- Average unit volume: $2.9 million
- Unit Count: ~13,500 domestically
- Initial Investment: $1m – $2.3m
The king of fast food remains a highly profitable franchise option with great brand recognition. Substantial capital and commitments are required of franchisees, who lease locations from McDonald’s.
Starbucks
- Average unit volume: $1.6 million
- Unit Count: 15,000+ domestic
- Initial Investment: $315k – $1.6m
Proven operations and devoted customer base drive strong revenues at Starbucks franchises. But limited franchise opportunities exist since most locations are company-owned.
Taco Bell
- Average unit volume: $1.5 million
- Unit Count: ~7,000
- Initial Investment: $1.2m – $2.6m
Taco Bell remains popular for Mexican fast food. The significant startup costs deliver high volumes. Franchisees must commit to an owner-operator model.
For profits, it’s hard to beat these category leaders with their strong brand recognition, economies of scale, and operational efficiencies.
Top Fast Food Franchises by Profit Margin
Ranked by estimated profit margin percentage:
Chick-fil-A: 30%+
Thanks to premium pricing and extreme unit volumes, Chick-fil-A franchise profit margins lead the industry. Operators are hands-on managers though.
McDonald’s: 20-25%
McDonald’s name recognition and retail real estate acumen deliver strong cash-on-cash returns despite high startup costs and rents.
Subway: 10-15%
Lower startup costs help Subway franchisees achieve double-digit profit returns. But sales volumes lag quick service competitors.
Pizza Hut: 10-15%
Pizza remains popular, driving returns. But the growing trendiness of fast casual pizza may squeeze full-service Pizza Hut margins over time.
Wendy’s: 10-12%
Classic, unfussy fare allows Wendy’s to maintain modest margins though the brand lags category leaders in unit volumes.
These leading legacy brands continue generating healthy franchise profits leveraging operational efficiencies and scale.
Fast Food Franchises with the Best ROI
The franchises delivering the fastest financial payback on investment include:
Jimmy John’s
- Initial investment: $544k – $1.1m
- Average unit volume: $1.35m
- Breakeven time: 1-2 years
Jimmy John’s quick service model offers a low-cost buildout and fast breakeven compared to other sandwich concepts.
Tropical Smoothie Cafe
- Initial investment: $239k – $585k
- Average unit volume: $850k+
- Breakeven time: 2-3 years
Minimal kitchen equipment needs result in a lower cost, faster payback franchise model with healthy food trending.
Jersey Mike’s Subs
- Initial investment: $186k – $775k
- Average unit volume: $1m
- Breakeven time: 2-4 years
Popular sandwich model gains market share with modest startup costs relative to competitors.
Five Guys Burgers and Fries
- Initial investment: $306k – $670k
- Average unit volume: $1.35m
- Breakeven time: 2-4 years
This leading better burger concept generates outsized revenues that provide rapid ROI potential.
Fast casual and QSR models excel at quicker payback periods thanks to lower build out and operating costs.
Top Fast Food Franchise Sectors
Within the fast food industry, certain categories consistently perform well including:
Burgers – Better burger chains like Five Guys and Shake Shack offer strong volumes and margins. McDonald’s scale leads to profitability.
Mexican – Taco Bell and Chipotle boast the top Mexican chains. Tacos and quesadillas remain in demand.
Chicken – KFC, Chick-fil-A and Raising Cane’s satisfy America’s craving for fried and grilled chicken.
Sandwiches – Subway, Jimmy John’s and Jersey Mike’s drive profits selling subs and sandwiches.
Pizza – Domino’s, Pizza Hut, Papa John’s and Little Caesars capitalize on continual pizza demand.
Leading brands in these core fast food categories make smart franchise investment targets based on perpetual customer demand.
FAQ About Profitable Fast Food Franchises
Here are some common questions:
What is the #1 fast food franchise?
McDonald’s remains the top fast food franchise in term of units, systemwide sales, and brand recognition. But other brands exceed them in per unit volumes and profit margins.
Are food trucks profitable?
Yes, lower startup costs can allow specialty food trucks to become profitable more quickly than retail locations. But trucks have limited sales capacity.
What is the easiest fast food franchise to run?
QSR models like burger, taco, and sandwich brands tend to be simpler to operate with repetitive workflow. Full-service chains generally require more oversight.
Do franchises give you annual profit projections?
Franchisors share average or estimated unit revenues and profitability in their Franchise Disclosure Document (FDD) but not personalized estimates.
Which is more profitable – franchise vs independent?
On average, franchises perform better long-term than independent startups in the same industry thanks to the proven system and brand power.
Can absentee owners run fast food franchises profitably?
Hands-on owners fare better managing daily operations. But at scale with skilled managers, some brands like Subway allow absentee ownership.
Pick the Right Profitable Concept
The most profitable fast food franchises leverage operational efficiencies, economies of scale, and recognizable branding to generate strong revenues and return on investment. Weigh your skills, interests, and risk appetite in choosing a brand that fits your goals.
