Burger King

Burger King's franchise fee is $50,000 for a standard 20-year traditional restaurant — firm across most formats. Non-traditional and shorter-term agreements go lower ($25,000 for 10-year, $15,000 minimum). The application fee adds $250 for individuals or $5,000 for entity applicants, and the standard training fee is $7,500 per trainee before you even open.

For a freestanding traditional restaurant, total investment runs $2.05M to $4.71M — among the widest ranges in QSR, driven by the enormous variability in real estate and construction. The $300K–$1.5M real property line and $1M–$1.8M construction estimate reflect the reality of ground-up freestanding builds versus conversions in expensive versus affordable markets. Equipment runs $251K–$305K; the mandatory Double Drive-Thru adds $80K–$120K to remodel costs.

For non-traditional formats, the numbers are more approachable: inline/end-cap at $945K–$1.94M, mall food court at $656K–$1.13M, big-box at $565K–$979K.

The ongoing fee structure combines 4.5% royalty and 4.5% advertising fund (as of January 1, 2025) — but with important wrinkles. The Digital Services Fee adds $110/month plus 1% of eligible digital sales (capped at $4,500/year). The Service Desk Fee adds $750–$1,200/year. Local and DMA marketing investment adds up to 2% of gross sales. The Burger King Foundation requires $1,000/year per restaurant. If you fall behind on remodels, the royalty can escalate to 6.0% or 7.5% under the Deferred Remodel Default mechanism — a meaningful penalty built into the agreement.

For BKL locations (where BKC owns the real estate and leases it to you), rent runs at base rates plus percentage rent of 8.5% of monthly gross sales up to $133,333/month, escalating to 10% above that threshold.

Burger King discloses system-wide AUV data for 5,837 traditional restaurants (franchisee and company-owned combined) open for the full year 2024. Average: $1.67M. Median: $1.58M.

The distribution is heavily concentrated in the middle: 41% of locations fell between $1.1M and $1.9M. Only 0.7% fell below $700K; 29% exceeded $1.9M. Company-owned locations averaged $1.73M, slightly above the system average, suggesting the franchisor's higher-volume sites are in corporate hands.

Burger King does not disclose operating expenses, COGS, or net income in its FDD. At $1.67M in average AUV with QSR food costs of approximately 28–32% and labor at 28–33%, a typical BK generates $400K–$600K in gross profit before occupancy, royalties, and G&A. After 4.5% royalty ($75K), 4.5% ad fund ($75K), and estimated rent ($150K–$250K for freestanding), four-wall EBITDA in the $75K–$200K range is a reasonable but unconfirmed estimate for an average location.

The Burger King U.S. system contraction is the defining story here. From 7,042 units in 2022 to 6,778 in 2023 to 6,701 in 2024 — a loss of 341 total units over three years. The 2023 year was particularly severe: 413 franchised closures. The 2024 numbers show some stabilization (179 closures versus 413 in 2023), but the trend is clearly retrenchment.

The most notable 2024 data point: BKC reacquired 1,061 franchised restaurants in a single year, jumping corporate ownership from 138 to 1,177 locations. This was the Carrols Restaurant Group refranchising — a major structural transaction, not widespread franchisee failure. The underlying franchise base of 5,524 remaining franchised locations is still enormous.

Projected openings for 2025 show 63–78 new units — a modest pace relative to the system size.

The Deferred Remodel Default escalator is a significant contractual risk. If you fail to complete required remodels by the deadline, royalties can jump from 4.5% to 6.0% or even 7.5%. On a $1.67M-revenue location, that escalation costs $25,000–$50,000 per year until resolved. Plan your remodel budget before signing.

BKL rent (franchisor-owned real estate) compounds the cost structure. On top of 4.5% royalty and 4.5% ad fund, percentage rent of 8.5–10% of gross sales pushes total fee-plus-rent to 17–19% of gross before labor, food, and G&A. This is the McDonald's rent trap in a different form — the franchisor controlling your real estate means they control your biggest cost after food and labor.

The Franchise Agreement has a personal guarantee requirement for all principals. Training cancellation fees apply if you miss training start dates. The background check fee of $395–$15,000 for investors signals a thorough approval process with real upfront costs for international buyers.