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BurgerFi Franchise ProfileRestaurant Franchises > Quick-Service Restaurants |
What Are the Initial Investment Requirements for a BurgerFi Franchise?
To open a BurgerFi franchise, you will need to consider a total initial investment ranging from $609,550 to $1,042,500. This includes a franchise fee of $45,000. Additionally, prospective franchisees should have a net worth between $250,000 and $500,000 and be prepared for ongoing costs such as a 5.5% royalty fee and a 3.5% marketing fee. Having sufficient cash reserves is crucial to cover these initial and ongoing expenses.
What Are the Financial Performance Metrics for BurgerFi Units?
BurgerFi units have demonstrated strong financial performance, with an average annual revenue of $1,397,859. The median annual revenue stands at $1,167,366, while the highest revenue recorded is an impressive $3,111,410. With a breakeven time of just 12 months, franchisees can expect a solid return on investment, as the investment payback period is also estimated at 12 months.
What Are the Typical Running Expenses for a BurgerFi Franchise?
Running a BurgerFi franchise involves various expenses that can range significantly. Annual costs include rent (approximately $11,250 to $33,000), insurance ($6,000 to $10,000), and professional fees ($2,500 to $6,500). Other costs such as computer system maintenance and marketing can add up, leading to total annual expenses estimated between $45,950 and $93,900. Understanding these expenses is vital for effective financial planning and management.
How Many BurgerFi Units Are Currently Operating?
As of 2022, BurgerFi operates a total of 113 units, comprised of 88 franchised locations and 25 corporate-owned units. The number of franchised units has seen slight fluctuations over the years, with 94 in 2021 and 91 in 2020. This growth trajectory indicates a stable franchise model, making it an attractive opportunity for potential investors looking to enter the fast-casual dining sector.
BurgerFi Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
BurgerFi Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2020 | 2021 | 2022 |
|---|---|---|---|
| Total Units | 112 | 115 | 113 |
| Net Change YoY | 3 | -2 | |
| Franchised Units | 91 | 94 | 88 |
| Net Change YoY | 3 | -6 | |
| Corporate Units | 21 | 24 | 25 |
| Net Change YoY | 3 | 1 |
Investment Overview
The initial investment to open a BurgerFi franchise ranges from $609,550 to $1,042,500. This includes the franchise fee of $45,000. Prospective franchisees should also consider the cash required, which falls within the same range as the total investment. Understanding these financial commitments is crucial for anyone looking to enter the BurgerFi franchise system.
Revenue Potential
BurgerFi franchises have demonstrated strong revenue potential, with an average annual revenue of approximately $1,397,859 per unit. The median annual revenue is reported at $1,167,366, while the lowest annual revenue recorded is $5,048, and the highest reaches $3,111,410. These figures highlight the significant earning potential for franchisees, contingent on location and management practices.
Ongoing Fees
Franchisees are subject to a royalty fee of 5.5% of gross sales, along with a marketing fee of 3.5%. These ongoing fees are essential for maintaining brand presence and support from the franchisor. Understanding these costs is vital for franchisees to accurately forecast their profitability and manage their financial obligations.
Financial Performance
The average EBITDA for a BurgerFi franchise unit stands at $549,441, which is about 39.2% of revenue. With a gross profit margin of 67.9%, franchisees can see a healthy return on investment. However, it’s essential to manage operating expenses, which average around $400,000 annually, to maintain profitability.
Franchise Growth
BurgerFi has shown a steady growth trajectory with 91 franchised units in 2020, increasing to 94 in 2021, before slightly declining to 88 in 2022. The brand also operates 25 corporate units as of 2022. This growth trend reflects the brand's resilience and its ability to adapt to market demands, making it an attractive option for potential franchisees.
Break-even Analysis
Franchisees can expect to break even within approximately 12 months of operation. This swift recovery period is appealing for investors as it indicates a potentially quick return on investment. Additionally, the investment payback period aligns with this timeframe, underscoring the financial viability of opening a BurgerFi franchise.
Frequently Asked Questions
The initial investment for a BurgerFi franchise ranges from $609,550 to $1,042,500. This includes the franchise fee, equipment, and other startup costs.