Yahoo Finance The 10 Most Lucrative Fast Food Franchises Of 2024, According To Experts
Looking to run your own fast food restaurant? From wings to smoothies and subs, there are all kinds of fast-food franchise opportunities. Across all industries and types of franchises, the quick-service restaurant industry is seeing the strongest growth right now, according to the International Franchise Association, so it's a good time to jump in.
There’s no airtight, apples-to-apples (or burgers-to-burgers?) way to know which franchise will be the most successful. A number of factors come into play—things like location, market conditions, staffing, local taxes, and so on.
But if you’re looking to break into the biz and bring home some serious bacon, the best franchises are known for a few things: going all out to support their franchisees; healthy growth patterns; hopping on the mobile-ordering trend; and being smart with their marketing, industry insiders say.
On the flip side, be wary of any franchise that isn’t forthcoming with their financials, boasts overly optimistic profit projections, or has high turnover rates among franchisees, cautions Jamil Bouchareb, CEO and Founder of Restaurantware, a restaurant supply company.
“A reluctance to integrate new technologies or innovate within the industry can also be a significant red flag as it suggests the franchise may struggle to stay competitive,” he says.
Past lawsuits between the franchisee and franchisor and any brand that’s showing long-term distress with a depleting restaurant count for several years in a row should also be warning signs for any potential franchisees, says Ben Coley, editor of QSR, a magazine that covers the industry.
So, what’s the secret sauce for knowing whether a franchise will be successful? Here are 10 franchises that industry experts have pegged as having great potential to be lucrative in 2024.
Jersey Mike’s
Initial Franchise Fee: $18,500
This sub shop got its start in 1956 and today has more than 2,800 locations in the U.S., with 300 more opening soon. Jersey Mike’s made it onto QSR’s list of best franchise deals in 2023, because, in addition to strong brand recognition, high-quality sandwiches, and strong sales, Coley points out that Jersey Mike’s is known for its strong relationship with franchisees. In fact, founder Peter Cancro paid $200 million to remodel every owner’s sandwich shop and also pumped millions into marketing Jersey Mike’s.
Taco Bell
Initial Franchise Fee: $25,000 to $45,000
Taco Bell does a fantastic job pushing innovation and connecting with customers in creative ways, Coley says. Whether it’s provocative menu items like the Big Cheez-It Crunchwrap or staying in the headlines by doing things like successfully challenging the Taco Tuesday trademark, the chain knows how to grab the attention of its Gen Z and Millennial customers. Some Taco Bell fans are so devout that they get married at the cantina in Las Vegas; others have bucket-list restaurants to visit, like the one in Pacifica, California that’s on a beach with a walk-up window.
Growth metrics are strong, too. Last year, Taco Bell opened 417 new restaurants in 25 countries and digital sales increased 22% year-over-year across parent company Yum!, which also includes KFC and Pizza Hut.
Smoothie King
Initial Franchise Fee: $30,000
One trend Coley has been spotting: “People are clamoring for cold beverages.” As an added edge, smoothie shops are particularly savvy when it comes to marketing their health benefits, something that appeals to Gen Z and Millennials, especially coming out of the pandemic, Coley says. Case-in-point: Smoothie King’s menu features “nutritional enhancers” with protein powders and others for gut health, joint health, and fiber. Smoothie King has also kept its menu fresh, with the addition of smoothie bowls, Coley says.
Tropical Smoothie Cafe
Initial Franchise Fee: $35,000
Tropical Smoothie Cafe is another well-positioned beverage franchise, Coley says. Last year, the smoothie business opened 176 new cafes. What’s more: 70% of the openings were existing franchisees. The cafes have a proven track record because 2023 was the 12th consecutive year of “positive same store sales” and digital sales increased, making up 37% of the brand’s overall sales. In addition to its smoothie lineup, the cafes also sell supplement boosts, like a Vitamin C immunity complex, and have bowls with acai, Greek yogurt, and chia oatmeal.
Chick-Fil-A
Initial Franchise Fee: $10,000
The bar is high to break into Chick-fil-A: Thousands apply each year for relatively few positions, the chicken chain says, and there’s buzz that becoming an operator is more competitive than getting into an Ivy League school. Still, Chick-Fil-A restaurants raked in more than $21 billion in 2023, according to QSR, and a third of the restaurants made more than $10 million each, which is not far behind McDonald’s, which has more restaurants and is open seven days a week.
“A relatively simple menu allows them to remain lean for logistics, and the company culture and experience is so well known it inspires its own memes,” says Kirk Grogan co-founder and COO of TipHaus, a tip calculation service for the hospitality industry. “If you asked someone to guess a restaurant based on two clues: ‘My Pleasure’ or ‘Closed on Sunday,’ most of the country would immediately understand.”
Wingstop
Initial Franchise Fee: $10,000 to $20,000
The numbers are looking good for Wingstop: In the first quarter of 2024, sales increased by 36.8% to $1.1 billion, the company reported. Of the 1,974 Wingstop restaurants in the U.S., almost all of them (1,924) are franchised. Coley says Wingstop has done a great job investing in its app and raising brand awareness during sports playoffs with its commercials. “They really put in a lot of effort to target the younger consumer base,” Coley says. Another smart move? A while back, Wingstop started offering its chicken sandwich in all of its wing flavors. Wingstop also teamed up with rapper Latto for a new flavor.
Jack-in-the-Box
Initial Franchise Fee: $50,000
Jack-in-the-Box is a good example of a comeback story. In 2018, the National Jack in the Box Franchisee Association filed a lawsuit against the fast-food franchisor, citing concerns over marketing funds and remodeling initiatives, according to QSR. Fast forward to 2020: CEO Darin Harris took over, and one of his first orders of business was repairing relationships with franchisees. The restaurant has gained momentum, opening 20 new restaurants in fiscal year 2023 and coming up with new menu items like the chicken hashbrown melt (too far?) that go beyond burgers and also include croissant breakfast sandwiches and crispy wing combos. The 24/7 model also sets it apart from drive-thru competition.
McDonald’s
Initial Franchise Fee: $45,000
McDonald’s best attribute is its strong brand recognition, Bouchareb says. But did you know that some of their most popular menu items—the Big Mac, the Egg McMuffin, and the Filet-O-Fish—have all been developed by owner/operators? As fast-food restaurants ramp up their efforts to gain loyalty members and drive digital sales, there are some changes for franchisees coming: U.S. franchisees will be required to chip into a digital marketing fund next year as McDonald’s grows its digital business, CNBC reported. Here’s some secrets you probably didn’t know about McDonald’s.
Subway
Initial Franchise Fee: $15,000
Subway’s flexible franchise model and emphasis on fresh ingredients have contributed to its widespread appeal, Bouchareb says. Some perks for first-time franchisees include simple operations—no cooking, grilling, or frying is required. Subway also has plans for more grab-and-go items. Subway was named QSR’s Transformational Brand of 2023, with the magazine highlighting turnaround efforts like expansions, increased digital sales, and building a catering business in addition to restaurant remodels and menu innovation.
Dunkin’
Initial Franchise Fee: Starts at $10,000 for non-traditional restaurants in colleges, airports, and stadiums and $40,000 for traditional restaurants.
Dunkin’ is another franchise that has capitalized on strong brand loyalty, Bouchareb says, with a whopping 98% brand-recognition rate. The company is staying in front of consumers, too, tapping Ben Affleck for its first-ever Super Bowl ad in 2023. Dunkin' also offers veterans discounts on initial and ongoing franchise fees.
Dunkin' has more than 13,100 restaurants across 40 countries. Sites can vary from 1,200 to 2,600 square feet, or franchisees can combine a Dunkin’ and Baskin-Robbins store under one roof. The brand is also known for its extensive franchisee training programs that cover things like branding and business management.
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