With a legacy of over 70 years, FatBurger is a well-established food restaurant franchise industry. The company has a reputation for serving high-quality burgers and other food items and has expanded its markets in several states of the US along with a number of international markets. The growth the company has achieved in the past years can be attributed to franchising opportunities that the company provides to entrepreneurs to open and operate their own FatBurger outlets. The article, herein, discusses the cost and profit potential of Fatburger franchises and opportunities available for aspiring franchisees by evaluating the reviews from the current franchisees.
How much does a FatBurger franchise cost
The franchise fee for Fatburger is $50,000, while the whole investment is expected to be between $462,000 and $770,000. Franchisees are required to have a minimum net worth of $1.5 million, with at least $500,000 of that amount in liquid assets. 6% of net sales are used to pay a royalty fee, and an extra 4% is used to fund regional and local advertising.
| Brand Franchise Price and Costs | |
| FatBurger Franchise Fee | $50,000 |
| FatBurger Franchise Cost | $462,000-$770,000 |
| Royalty Fee | 6% |
| Advertising Fee | 4% |
| Term of Agreement | 5 Years |
| Is the FatBurger franchise term renewable? | Yes |
How much do FatBurger franchise owners make?
The profitability of the franchise is influenced by various factors including its location, quality of service, and management. The franchisor doesn’t reveal the average revenue earned by a franchise. Nevertheless, franchise owners can expect to earn approximately 10-15% of the gross revenue generated by the franchise annually. Therefore, higher sales would result in greater income for the owner.
According to industry standards, getting a return on the franchise investment will take a very long time.
FatBurger Franchise Requirements
In order to become a franchisor, the applicants must adhere to the following requirements:
- Financial Requirements: The overall investment is expected to be between $462,000 and $770,000, the franchise fee for Fatburger is $50,000. Franchisees must have a minimum net worth of $1.5 million, at least $500,000 of which must be in the form of liquid assets.
- Business Plan: Applicants are required to present a thorough business plan including their intended location, target market, marketing plan, projected financials, and other pertinent data.
- Location: Franchisees are required to have a restaurant with a minimum of 1,200 to 1,500 square feet and access to a high-traffic area.
- Training: At the company headquarters, franchisees are required to take a training course of 4-6 weeks that covers every facet of operating a successful restaurant franchise.
What is FatBurger franchise reviews
Positive reviews
- “A very nice, productive and fun workplace. It’s busy most of the time but the management team is nice and the co-workers are helpful and co-operative.”
- “They offer good discounts”
- “Working at Fatburger was one of the best place,best area management,best staff and customers I have ever being around.working at Fatburger I have learnt alot,improve so much,met so many wonderful people, people who know your worth,people know what you are capable of doing,people who doesn’t looked down on you.people who encouraged you to achieve your goals in life.”
- “The environment the food, the music and most of the staff members and guests are great”
Negative reviews
- “Not a bad place to work, but i personally had a bad experience in the time i was working. management was very rude. i had to work the entire floor by myself on a friday one time and they refused to call in help.”
- “They have a bad management”
- “Not all employees are treated fairly. Favoritism practice in the store.
- “Not paid good for job performance. Better look other job. Manager favors employees from same country”
FatBurger Franchise Rankings
As per statistics, FatBurger was ranked 283 in 2014, 284 in 2015, 287 in 2016 and 479 in 2022’s Franchise 500 Ranking. Further, it was ranked 150 in 2022 under the Fast-Growing Franchises (US and Canada) and 10 in 2022 in hamburgers under Top Food Franchises.
What is the FatBurger Franchise?
Founded in 1952 by Lovie Yancey in Los Angeles, California, Fatburger is an American fast-casual restaurant chain that specialises in burgers. With the ability to customise the size of the patties, toppings, and sauces, Fatburger is well recognised for its made-to-order burgers. In addition to the US, Canada, and a few other nations, the franchise has more than 200 sites across the world. It is a well-known location for burger aficionados and has been highlighted in several films and TV shows.
Is FatBurger a Franchise Opportunity?
Yes, Fatburger offers franchise opportunities to company owners looking to launch their own fast-casual restaurant venture. As per the company’s website, FatBurgers offers both single-unit and multi-unit franchise oppurtunity. The brand provides continuous assistance and training, a well-known brand name, and a tried-and-true business strategy to franchisees. The company’s effective marketing and advertising campaigns, as well as its wide supply chain and purchasing power, are advantageous to Fatburger franchisees.
Facts That Nobody Told You About FatBurger
- Mr.FatBurger was founded by an African-American woman in 1947; the name was later changed to FatBurger when she split up with her boyfriend.
- The brand has been known to attract attention of everyone, whether it is a late-night shift worker or a celebrity.
- The business reached heights until it was sold by the owner in 1990.
- Before her death, Yancey has been known to have donated $1.7 billion to help people fight sickle-cell anemia.
- Many renowned celebrities have been into business with FatBurger.
| FatBurger Franchise Review and Information | |
| Industry Type | Food Franchise Opportunities |
| Sub Category | Hamburger Franchises |
| Year Established | 1952 |
| Company Name | FatBurger |
| Founder/Management Head | Lovie Yancey |
| Franchising Started | 1990 |
| Employees at Company H.O | 51-200 employees |
| Franchise Expansion Plan | US and all around the world, with the special focus on European countries |
| Number of Units | 193 (as of 2022) |
| Number of Franchise Units | 104 (as of 2022) |
| Social Media Handles | |
| Company Office location | 9720 Wilshire Blvd., Suite 500, Beverly Hills, CA 90212, US |
FatBurger Training to Franchises
Before a Franchisee may establish their first Fatburger restaurant, the proposed principal operators of the business must undergo 4-6 weeks in the Fatburger Training programme. Also taking part in a 2-week executive training programme is mandatory for a principal owner. All training expenses, including the travel and hotel of the management team, are covered by the franchisee.
FatBurger Operations to Franchises
FatBurger provides franchisees with a comprehensive operations system designed to help ensure consistency and quality across all locations. This includes assistance with site selection, store design and construction, menu development, supply chain management, and marketing and advertising.
Franchisees receive extensive training and ongoing support from the company to help ensure their success. Additionally, FatBurger regularly updates its operations system to incorporate new industry trends and best practices, and works closely with franchisees to continuously improve the overall customer experience.
How is FatBurger Territory Granted to Franchises
FatBurger grants territories to franchises based on a number of factors including population density, traffic flow, competition, and potential for growth. The franchisee is entitled to territorial protection surrounding their store, which is subject to the terms outlined in their existing franchise agreement. Moreover, depending on the specific provisions of the development agreement, the franchisee may have the opportunity to negotiate for exclusive operating rights across entire cities, states, or countries.
What is the FatBurger Franchise Term of Agreement and Renewal?
The term of the FatBurger’s franchisee is typically 5 years, however, it can vary according to the specific terms of the agreement. Franchisees may have the option to renew their agreement for additional terms, subject to the company’s approval and the terms outlined in the agreement.
Does FatBurger provide Financial Assistance to Franchises?
FatBurger itself does not provide financial assistance to the franchises, however, it has established partnerships with third-party lenders who provide financial assistance to individuals seeking to open their own restaurant franchises.
Pros & Cons of owning a FatBurger Franchise
Pros of owning a FatBurger Franchise
Owning a FatBurger’s franchisee can offer several potential benefits, including:
- In-demand product : Millions of people love hamburgers, making it one of the most popular types of cuisine
- Training and Support : Fatburger assists franchisees with all elements of business and provides thorough training packages
- Thriving industry : Fast food is a sector that is constantly expanding, and people still appear to enjoy it. Hence, it’s a never ending business.
- Good brand reputation : The company has been in business for 70 years and has a loyal following of customers.
- Excellent promotion tools : Innovative marketing techniques are used by the company, which enables it to grow its impact and clientele every day.
- Customer-oriented restaurant : In order to maintain the required level of service, Fatburger works to offer top-notch goods and the greatest customer experience
- Several types of stores are available : Franchisees can start a full-service restaurant, a drive-through, or a kiosk.
Cons of Owning a FatBurger Franchise
While owning a FatBurger’s franchisee can be a rewarding experience, there are potential drawbacks to consider. These may include:
- High initial investment costs: Starting a FatBurger’s franchisee requires a significant amount of capital, including franchise fees, equipment, inventory, and other expenses.
- Ongoing royalties and fees: Franchisees are required to pay ongoing royalties and fees to the company, which can impact their profitability.
- Limited control over business operations: As a franchisee, you are required to follow the company’s operating standards and guidelines, which can limit your ability to make independent business decisions.
- Dependence on the franchisor: Franchisees rely on the franchisor for ongoing support, training, and marketing, which can impact their success.
- Competition: The fast-food industry is highly competitive, and franchisees may face competition from other fast-food chains and local restaurants.
Franchise Deck Analysis and Overview
Fatburgers is a privately owned and managed hamburger chain. In addition to fresh and tasty beef burgers that are grilled to order, the business also serves veggie burgers, chicken sandwiches, chili dogs, onion rings, turkey burgers, Impossible Burgers, fries, and milkshakes.
Lovie Yancey had already established a reputation for making excellent hamburgers prior to launching this business, which was initially known as Mr. Fatburger.
An intensive training program and committed support from the Fatburger’s franchisee are advantageous to franchisees. The likelihood of franchisee success is greatly influenced by this support. Assistance could be provided for the brand’s product supply chain, building construction, and staff hiring. Overall, it can prove to be a good investment.
Potential Risks to consider before investing in a FatBurger franchise
You must consider the following risk factors before investing in a FatBurger’s franchisee:
- Credit and depository risks
The business keeps its cash accounts at banks and other financial organizations. The balances occasionally may go over the thresholds covered by federal insurance. The Company feels its cash balances are not significantly at risk of loss because it has not incurred any losses in these accounts.
- Out-of-state dispute resolutions
The franchise agreement states that you may only litigate, arbitrate, or mediate problems with the franchisor in California. You can be forced to accept a less advantageous resolution for disputes if the same takes place outside of your state. Also, it can be more expensive in California than in your home state to mediate, arbitrate, or file a lawsuit with the franchisor.
- Spousal liability
Despite having no ownership stake in the franchise, your spouse must sign a paper making them responsible for all financial responsibilities under the franchise agreement. If your franchise fails, this guarantee will put your and your spouse’s marital and individual assets, possibly including your home, at danger.
Is the FatBurger Franchise Profit Worth the Franchise Cost?
The precise amount of franchising profit for Fatburgers is not known. Yet, given that we are aware of the low profit margins in the burger market, we may predict that the franchisee’s profit will likely range from 10% to 14% of the unit’s yearly gross sales. This might or might not prove to be worth the franchise cost.
Competition Analysis of FatBurger Franchise
| FatBurger Franchise | Cost to Franchise | Franchisee Fees | Royalty + Ad fees | Expected Profit | Recoup of Capital | FD Rating |
| FatBurger Franchise | $462,000-$770,000 | $50,000 | 6%+4% | 10-15% of gross revenue | – | 4/5 |
| Sonic Franchise | $1,242,200 to $3,537,700 | $45,000 | 5%3.25% | 13% | 14.5 years | 3.5/5 |
| Burger King Franchise | $1,790,800 – $4,194,700 | $50,000 | 4.5% 4% |
16% | 8 to 12 years | 3.8/5 |
| Five Guys Franchise | $306,200 to $641,250. | $25,000 | 6% | $136,344 to $272,688 | 4 to 6 years | 4.1/5 |
| Wendy’s franchise | $2-$3.5 million | $40,000 | 4% | $ 330490 to $ 440653 | 8 to 12 Years | 3.9/5 |
| Whataburger franchise | $0.5 to $1.5 million | $59,500 | 8% | $94,000 to $122,600 | 6 to 9 years | 3.9/5 |
The Franchise Deck rating for the FatBurger franchise is 4/5.
Conclusion : Is the FatBurger franchise a good choice?
FatBurger Franchise can indeed be a good choice to invest in. Profitability will depend on the level of operating standards, location, management, level of competition, and owner engagement, similar to other franchises for sale. Around 50 billion hamburgers are consumed in America each year, indicating a steady demand for the food.
This restaurant chain’s reputation depends a lot on word-of-mouth advertising. In order to develop a huge fan following, the business aims to leave its clients satisfied. As a Fatburger franchisee, you might also get the chance to co-brand with Buffalo’s Café, the sister restaurant of the business that sells chicken wings.
The fact that a Fatburger franchise offers a variety of venue designs is another important benefit. You can buy a food court kiosk, a co-branded joint, a drive-thru eatery with 50 seats, or a sit-down restaurant that can accommodate up to 150 people. Franchisees are allowed to decide whether to provide delivery or bar service.
Entrepreneurs who want to open a franchise in the category franchise opportunities categories can look at
- Burger King Franchise
- Five Guys Franchise
- Wendy’s Franchise
- Burger Village Franchise
- WhataBurger Franchise
- Fat Burger Franchise
- BurgerFi Franchise
- Smashburger Franchise
- Wayback burger franchise
Frequently Asked Questions (FAQs)
- Is the FatBurger franchise profitable?
The profitability of the franchise is influenced by various factors including its location, quality of service, and management. The franchisor doesn’t reveal the average revenue earned by a franchise.
- Can you make money owning a FatBurger franchise?
Franchise owners can expect to earn approximately 10-15% of the gross revenue generated by the franchise annually. Therefore, higher sales would result in greater income for the owner.
- Is FatBurger a franchise?
Yes, Fatburgers offers franchising opportunities to company owners looking to launch their own fast-casual restaurant venture.
- How much is a FatBurger franchise?
The overall investment is expected to be between $462,000 and $770,000, the franchise fee for Fatburger is $50,000.
- How do FatBurger franchises make money?
FatBurger’s franchises generate revenue by selling food and beverages to customers at their locations, with the franchisee retaining a portion of the sales and paying royalties and fees to the company.
