Fatburger currently has more than 180 franchise units; 50% of them are international. This burger chain has had significant growth recently because the quality of its food is exceptional, and the profitability of these restaurants can be extraordinary.
Most Fatburger restaurants are operated and owned by franchisees; They are currently looking for new franchisees in the United States, Canada, and abroad.
This franchise is relatively low-cost when we compare it to other leading hamburger chains in this industry. The franchise package that the franchisor provides to franchisees covers every business segment, and it is adjusted to investors that never before had an opportunity to run their own business.
Fatburger franchise works on the principle of one big family; franchisor is devoted to its franchisees, and because of this fact but also because of the excellent profit that these restaurants achieve, more investors are choosing to open a restaurant of this brand.
How Much Does The Fatburger Franchise Cost
The total cost of starting the Fatburger franchise ranges between $ 450,000 and $ 900,000. This financial prediction includes an initial franchise fee of $ 50,000, and by paying it, each new franchise unit receives the right to use Trademarks from this brand.
The cash requirement that investors must meet is $ 500,000 in liquid assets(non-borrowed funds)
Fatburger, as a company, connects potential franchisees with third-party financial funders. This loan assistance will be very beneficial to all entrepreneurs who are not having financial construction already closed.
The costs related to the ongoing fees are 10% of the gross revenue; the Royalty fee is 6%, and the Marketing fee is 4%. These fees all recipients of a Fatburger franchise are required to pay on a weekly or monthly basis; otherwise, a franchisor can nullify the franchise agreement.
The precise Fatburger franchise cost will also depend on the state or country where the restaurant will conduct operations.
International franchise units are much more affordable than those based in the US and Canada, and this is due to the cheaper cost of store renting and architect workers.
The highest cost is correlated with arranging the restaurant under the trademarks of this brand. The franchisor has its construction workers who can quickly arrange the sales facility, which is convenient and much cheaper than outsourcing this job to third-party companies.
The Fatburger franchise agreement has 15 years duration, and it is easy to renew it once it expires.
Fatburger Franchise Cost and fees:
- Estimated total investment: $ 450,000 – $ 900,000
- Initial fee: $ 50,000
- Royalty fee: 6%
- Marketing fee: 4%
- Franchise agreement duration: 15 years
Fatburger Franchise Profit
There is no available exact data about how much Fatburger franchise profit is. But, as we know that margins in the burger industry are not soo high, we can project that the franchisee’s profit should be between 10% and 14% of the annual gross revenue per one franchise unit.
Some of the Fatburger franchises have liquor licenses, and alcoholic drinks have the highest profit margins. So, when we take everything into account, this franchise has the potential to bring its owner a profit of up to 15% of gross revenue.
In addition to alcohol, the menu also includes various hot and cold beverages, shakes, and juices; these products are also very profitable because their profit margin is high.
So if the franchisee wants to run a profitable Fatburger franchise, then the restaurant must make a yearly gross revenue of a minimum of $ 800,000.
After paying the cost of workers, space rent, and franchisor fees, it is expected that the owner of the Fatburger restaurant will earn about $ 100,000 in profit or a little more than 12% of the $ 800,000.
All future recipients of this franchise must find a good location for the restaurant because the number of customers will have to be high to make a profit. Apart from the restaurant location, the manager’s ability to hire good workers, maintain a high quality of service and secure raw materials for work on time is also crucial.
When we connect a quality manager and a good location, we have the two most important factors that will bring significant profitability to the Fatburger franchise owner. However, if only one of these two factors is not right, it is expected to be a lot of financial struggles for the franchisee.
Fatburger Franchise in Canada
The first Canadian Fatburger franchise was opened in 2005, and since then, they have had consistent growth; currently, they have more than 60 units across the whole of Canada.
The cost of starting a Fatburger franchise in Canada ranges between $ 425,000 and $ 525,000. In this financial projection is included an initial fee which is $50,000.
Also, a franchisee must pay ongoing fees to the franchisor every month, and the cost is 9% of the gross revenue(Royalty fee 6% – Marketing fee 3%).
The financial requirements that investors must satisfy are liquid assets of $ 250,000+ (non-borrowed funds). There are no requirements regarding previous work experience; this franchise can also be started by Canadian entrepreneurs who are encountering this type of business for the first time.
Investors who decide to start Fatburger in Canada can expect that from the beginning of negotiations until the day of opening will pass between 12-18 months.
Every Canadian franchisee must pass the extensive training; the goal of this training is to prepare the unit manager for everyday business operations. Also, the franchisor supports the franchisee in all business segments throughout the whole duration of the franchise agreement.
Fatburger Canada presents budget projections to all its investors, which means that every investor will have insight into exactly how much this investment will cost him. In this way, it is all transparent, and there are no hidden costs that often occur in some other business systems.
Fatburger franchise cost and fees in Canada:
- Estimated total investment: $ 425,000 – $ 525,000
- Initial fee: $ 50,000
- Royalty Fee: 6%
- Marketing Fee: 3%
- Franchise agreement duration: 15 years
Fatburger History
Lovie Yancey opened the first Fatburger in 1947 in Los Angeles, and in 1990 they started to offer the possibility of starting a franchise. In 2003, this business concept was purchased by the entrepreneur Andrew Wiederhorn, and since then, they have started to grow in the United States and abroad.
When Andrew Wiederhorn acquired Fatburger, they only had 40 franchise units; today, they have more than 180 franchises which is a respectable number considering how competitive the burger industry is.
One interesting fact is that CEO Andrew Wiederhorn served 14 months in federal prison because of the wrong business decisions he had made in his former company. After prison release, he started to develop the Fatburger franchise into one of the more prominent and more popular players in the burger market.
Indeed this is not just a story about a successful business; this is also a story about a man who managed to turn his life around completely.
Fatburger menu has not changed much throughout history; their main product is a huge tasty burger that they offer to their customers. Their burgers are enormous; visitors can be sure that they won’t come out hungry from Fatburger restaurant.
This is one of the oldest burger brands in the US market. Due to the relatively low start-up costs, the Fatburger franchise is becoming increasingly popular among investors.
This franchise concept has a lot of potentials and will undoubtedly grow even more in the future, and today is the right time for all burgers lovers to get involved in this positive business story that has been going on since 1947.
Summary
Fatburger is one of the fastest-growing burger franchises. The main advantage of this brand over the competition is the taste of their food and the relatively low start-up cost. All investors considering entering the burger industry should research this business concept more closely.
Every franchisee can be sure that this company will provide good training and support in all business segments. And we all know when a franchisor has a good franchise package, then it all depends on the franchisee and his skill and will to succeed.