Many of the well renowned burger businesses in Australia operate on a franchise model, but the costs and application process will vary depending on the specific franchise. A good number of Australians visit a burger shop at least once a month, and they remain a popular choice for franchisees looking to open a business.
Demand for fast food is as high as ever, especially as clever fast food brands now integrate healthier options into their existing product offerings. Any entrepreneur who has ever watched customers pouring in and out of a big-name fast food franchise would be forgiven for imagining that the franchise owner must be making enormous profits.
Surprisingly, a lot of franchise owners admit that fast food franchises are not always as profitable as they may seem. One of the most common reasons blamed by franchisees as to why their fast food franchises are not as profitable are the significant ongoing fees payable to the franchisor in addition to regular business costs. Note that this also happens in the United States, where around half of fast food franchisees claim they do not make a fair profit from their franchise.
A lot of people who complain of a failing fast food franchise also admit that they did not do their due diligence before acquiring the franchise. With a handful of franchisees admitting that they did not meet with an accountant and relied on little more than a “gut feeling” before investing in a franchise and with many having no business management education, there is little wonder that a lot of them fail.
Even though operating a franchise business can be similar to starting your own business, one of the primary difference is that you need to pay ongoing fees to the franchisor. Depending on the franchise, this can include fixed fees and/or a percentage of your franchise’s revenue.
Also have it in mind that every business has hidden costs and expenses, and a franchise is no different. The good news is that franchises are covered under the Franchising Code of Conduct, making it a legal requirement for the franchisor to provide you with a full breakdown of all fees and other operating costs you will be expected to pay.
Nonetheless, the first decision you are still expected to make when considering establishing a burger business is whether to buy an existing, established franchise or to create a new fast food business.
12 Burger Franchise Opportunities in Australia and Their Cost
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Stores spread across VIC, WA and NSW and positioned as a premium burger offer, the brand is also looking to expand into NZ. Three hospitality ‘legends’ launched the brand off the back of their awarded restaurant in 2011.
- Franchise Investment: starts from $250k – $550k
- Initial Franchise fee: $60,000
- Ongoing Fees: 1% advertising fee & 6% royalty fee
This is a wonderful offer from the brand owned by ConceptEight, which also operates Noodle Box, Wokinabox, Alabama Wings, and Supreme Leader (Korean Krispy Chicken). While running the burger concept as the core part to the franchise, Concept Eight also integrated other brands into some of the same locations where appropriate, as co-brand, and or operating as ‘dark kitchens’ for food delivery services for multiple food offers. And this has turned out to be a unique approach to getting the most out of the investment of an owner.
- Franchise Investment: $250k – $300k approx
- Initial Franchise fee: $30,000
- Ongoing Fees: 3% advertising fee & 7% royalty fee + $150 mth licence fee
Self-described as a ‘designer burger place’, this brand strives to impress as much with its environment and atmosphere, as with its burgers and broader offer. A very much on-trend, impressively presented brand, it seems no detail is over looked for its contribution to the brand persona.
- Franchise Investment: $250k – $650k
- Initial Franchise fee: $70,000
- Ongoing Fees: 2% advertising fee & 6.5% royalty fee
This brand has taken the premium burgers mixed cocktails, craft beers, music and original designs and put them together into one location. This franchise was started by three guys (Aaron, Nathan and JD), who were previously franchise owners of another successful food brand, and felt it could be done differently. No staff uniforms, preferring individuality to shine through. The burger joint got its start from the Gold Coast, and has spread wide to locations in Brisbane and Noosa thus far.
- Franchise Investment: $350k – $500k
- Initial Franchise fee: included in investment
- Ongoing Fees: 2.5% advertising fee & 7.5% royalty fee
As one of Australia’s most recognised brand identities and a well-established franchise support network, Red Rooster offers exciting business opportunities for the right candidate. If you are a committed go-getter with bags of energy and a flair for customer service, you could join the numerous Red Rooster Franchisees who have already built their own business through their network.
- Franchise Investment:$250,000-$550,000
After hitting the Australian market in the early 70’s, McDonald’s has been a staple in the market since. For decades, its burgers mainly competed with Hungry Jacks and the corner milk bar burger. With the explosion in local specialty burger chains, the burger franchise has had some competition, but it is still holding a comfortable place in Australia’s fast food industry.
- Franchise Investment: $2mil (approx)
- Initial Franchise fee: $60,000
- Ongoing Fees: 4% advertising fee & 5% royalty fee & monthly rental fixed base+
- Training: 12 months (min) (full time, unpaid)
Hungry Jacks (aka Burger King in the USA), has been a permanent presence in the Australian market since the arrival of McDonald’s. Note that this brand has a high proportion of company owned and run outlets, with a lower percentage of stores owned and operated by franchise partners.
Franchise Investment: $2.6mil (approx)
This burger brand is owned by multi-brand operator, Craveable Brands, that also operates the Red Rooster and Chicken Treat brands. With the majority of stores located in NSW, the brand is focusing on growth in the QLD, VIC and WA markets. The brand has also had expansion into Singapore and Sri Lanka recently as well.
- Franchise Investment: $450k – $900k
- Initial Franchise fee: $50,000
- Ongoing Fees: 4-6% advertising fee & 6% royalties
- Training: 10-12 weeks
Grill’d Healthy Burgers
Established in 2004, the brand has always positioned itself heavily as ‘the healthy burger’ option in comparison to the burger competition. Indeed, this is another brand with a high ratio of corporate run stores, and this number appears to be growing with the percentage of franchise owned locations shrinking. The founder, Simon Crowe remains MD in the business.
- Franchise Investment: $555,590 to $885,700
This chain has just a handful of locations outside the QLD market as it pushes interstate to NSW and VIC. With the new appointment of CEO Shawn Kerr in Sept 20, the brand is gearing up for growth both domestic and internationally.
- Franchise Investment: $250k – $500k
- Initial Franchise fee: $30k
- Ongoing Fees: 3% advertising fee & 6% royalty fee
- Training: 12 weeks
Nathan’s Famous restaurant provides customers proprietary hot dogs (made with a proprietary spice formula) as well as crinkle-cut French fries, hamburgers, assorted sandwiches, platters, and other fast-service menu items.
A Restaurant is typically located in one of the following types of settings: a free-standing building, a food court in a shopping mall, an in-line shopping centre, or an in-line urban unit.
Polish immigrant Nathan Handwerker took his wife Ida’s recipe for hot dogs and started selling them from a stand in Coney Island in 1916. Nathan’s Famous became a public company in 1970, and began franchising in 1988.
- Franchise Investment: $276,360 – $1,071,360
- Net-worth Requirement: $500,000
- Liquid Cash Requirement: $200,000
This company offer a unique product that looks nicely balanced for the Australian market, with some authentic Americana mixed in. After what seemed a tentative push initially into the Australian market, the number of locations being added seems to have quickly accelerated.
Already operating in over 30 countries, sights are set on up to 300 locations in Australia over 10-15 years. At the time of writing, the brand is often announcing new openings through VIC, even in the midst of the covid crisis.
- Franchise Investment: $1,038,374 – $2,217,366 USD
- Initial Franchise fee: $37,500 USD & Territory Reservation Fee $10,000 USD
- Ongoing Fees: 4%-7% advertising fee & 5% royalty fee
If you’re looking to start a burger shop but don’t have much experience in the industry, a franchise can give you the support you need. Buying a burger franchise can be expensive, so it pays to understand the potential costs as well as the finance options available to you.
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