The fast-food industry is a lucrative one, with many billionaires owning well-known brands such as Jimmy John’s, Jersey Mike’s, In ‘N Out, Panda Express, and Chick-fil-A. Thousands of people nationwide franchise these brands with hopes of making good money, adding up to over 190,000 franchised restaurants in the US bringing in $289 billion annually, employing over three million people. Despite the popularity of these household name brands, the financial information of these franchises remains opaque, with details such as fees and potential costs only available through franchise disclosure documents. As Forbes delved into the numbers of several fast-food franchises, the focus shifted to the financial viability of individual franchisees in this competitive market.
A closer look at four of the fastest-growing fast-food franchises revealed the complexities of franchise finances. Wingstop, known for its buffalo-style chicken wings, has seen ownership changes but continues to grow rapidly with low labor costs and an estimated net margin of 17%. Scooter’s Coffee, famous for its Carmelicious drink, boasts a 28% annual growth rate over the past five years, making it the fastest-growing quick-service franchise in America. Jersey Mike’s, founded by Peter Cancro based on the Jersey Shore, has over $3.3 billion in systemwide revenue from 2,800 locations and a 20% annual growth rate. Tropical Smoothie Cafe, known for its smoothies and sandwiches, reported 12 consecutive years of same-store sales growth and was acquired by Blackstone in June 2024.
Wingstop, founded in 1994, was acquired by Roark Capital and taken public on Nasdaq in 2015, with estimated net margins of 17% and potential for franchisees to break even in roughly two years. Scooter’s Coffee, founded in 1989, has a lower fee of 8% compared to competitors and a 28% growth rate over the past five years. Jersey Mike’s, founded by Peter Cancro, has grown 20% annually for the past five years despite only 1% of applicants being accepted to open a location, with an initial investment of $500,000. Tropical Smoothie Cafe, founded in 1997, has seen significant growth with 1,400 locations in 44 states and 12 consecutive years of same-store sales growth through 2023.
Overall, the fast-food franchise industry is a competitive and complex world, with potential for significant financial gains for both founders and franchisees. While the financial details of these franchises remain opaque to the public, a closer look at some of the fastest-growing brands shows varying levels of success and potential for franchisees. As Americans continue to grab food from these household name brands, the industry is poised to continue its growth and expansion in the coming years. With the right investment and strategy, franchisees have the opportunity to make a mark in the fast-food industry and potentially build a successful business for themselves.
