The best fast-food franchises of 2023
The quick-service restaurant (QSR) industry, more commonly known as fast food, has long been a staple of franchising. That remains true today, as shown by the numerous fast-food restaurants – McDonald’s, Subway, Pizza Hut, KFC, and Taco Bell, just to name a few.
If you’re considering adding a fast-food franchise to your portfolio, this article is for you. We’ll cover:
- What makes a great fast-food franchise
- Why this is an exciting space for a franchise investor
- Some of the best fast-food franchises of 2023
Let’s get started!
What makes a great fast-food franchise?
It’s a logical question; as a potential franchise investor, of course you wonder what makes one franchise preferable to another. Here are some reasons why a fast-food franchise is a great investment.
The best investments are those that have a proven ability to grow.
Franchises with efficient front-end operations, which manifest in features like clean restaurants and strong customer service, indicate a high level of corporate efficiency.
Likewise, QSR franchises with efficient back-end operations – such as clean finances, a stable corporate headcount, and good employee NPS – indicate that the company is healthy and, ideally, growing.
When contemplating potential franchises, you’ll want to consider both front-end and back-end operations.
The common term “location matters” is more than a cliché – it’s a fact. And for a strong QSR franchise, location matters more than you may think.
Evaluate such factors as, in what geographical region is this franchise located? Has it managed to expand beyond its local sphere of influence? Is it international? Or is the franchise well-known in a small region and looking to branch out?
Regardless of the expansion strategy, it’s essential for you to understand the market of each location and what the competition looks like.
You know this already: As an investor, you need to care about revenue numbers. Strong revenue means more profit, and that means more money for you at the end of the day (or month, or year).
But strong revenue can also be an indicator that other strategic bets are working as they should: the franchise’s expansion and location strategy is solid, its operations are dialed in and efficient, and the leadership team is experienced and highly capable.
Experienced leadership can make or break a business – and that applies to franchises, too.
With the franchise you’re considering, be sure to investigate leadership’s background: how experienced are they – have they grown other franchises in the past? If so, that’s a great sign and should make you feel more confident.
Yet even if this is their first venture, don’t automatically pass them by. Plenty of successful businesses are built by first-timers – but it might be worth a little more due diligence. After all, you want to be confident with your investment dollars.
Does this franchise support new franchisees and set them up for success? Or are they left to fend for themselves?
One way to determine this is by looking at how many new franchises have opened or closed. If there’s a low close rate among new franchise locations, it’s safe to say that the franchise does a good job supporting franchisees.
Why fast food/QSR?
With such a vast quantity of markets out there, why add a fast-food franchise to your investment portfolio? There are many reasons, and one of the biggest is that QSR businesses have proved both resilient and innovative.
Benefits of fast-food/QSR businesses
1. Consistent demand: Because it is so wildly popular, fast food will undoubtedly remain a consistent demand in any modern economy – and as society has continued to modernize, the demand for fast food has steadily grown. Aided with new technology that makes it easier than ever to get food delivered, or get food on the go (the automobile, the drive-thru, and now delivery apps like DoorDash), the demand for fast food is greater than ever.
2. Post-COVID growth: Fast-food restaurants have shown a strong ability to grow after the COVID-19 pandemic. In fact, QSR Magazine reports that 2021 Q2 revenue for fast-food restaurants was up 20 percent compared to the same period in 2019.
So the QSR industry is growing – and quickly.
3. Technology: New technology has made it easier than ever for the fast-food industry to serve its customers. Online ordering through apps like Uber Eats, Grubhub, and DoorDash, as well as niche services like Instacart, have improved the experience of ordering the food you want – and making it easier to spend more.
Likewise, the rise of kiosks speeds up ordering by allowing stores to add more ordering locations on-site, which enables fast-food restaurants to serve a higher volume of customers.
Best fast-food franchises of 2023
Here are some of the most well-rounded QSR franchise brands to consider in 2023:
Founded in Jacksonville, Florida by the Sorensen brothers (both firefighters, hence the name), Firehouse Subs has grown over the past 30 years into a fast-food juggernaut with more than 1,000 locations across the United States.
- Locations: 1,187
- Founded: 1994
- Franchised: 1995
- Average gross revenue (EBITDA): $901,046
- Start-up cost: $200,132 – $993,297
- Franchise fee: $20,000
Domino’s and its iconic square pizza needs no introduction. This pizza chain grew from humble origins in Ypsilanti, Michigan to become one of the most recognizable names in the United States and worldwide. This longevity and staying power make Domino’s an attractive investment.
- Locations: 6,724
- Founded: 1960
- Franchised: 1962
- Average gross revenue (EBITDA): $1,352,208
- Startup cost: $156,450 – $682,500
- Franchise fee: $0 – $10,000
Famous for its hot and cold sub sandwiches, Jersey Mike’s has more than 2,300 locations across the United States. It was founded in Point Pleasant, New Jersey in 1956 – long before the first pizza, burger, or taco restaurants arrived on the scene – and has remained one of the best franchises to invest in during 2023.
- Locations: 2,387
- Founded: 1956
- Franchised: 1987
- Average gross revenue (EBITDA): $1,220,974
- Startup cost: $214,449 – $1,352,580
- Franchise fee: $18,500
Garland, Texas-founded Wingstop sells chicken wings out of shops themed with a classic 1930s and 1940s aviation aesthetic. Wingstop has been innovating with its June 2021 release of a digital-only restaurant Thighstop, which leverages much of the technology created in recent years to reduce overhead.
- Locations: 1,713
- Founded: 1994
- Franchised: 1998
- Average gross revenue (EBITDA): $1,605,564
- Startup cost: $325,616 – $974,733
- Franchise fee: $10,000 – $20,000
Recently named by CNN as one of the top five places to eat a hot dog in the U.S., Pasadena-founded Dog Haus is a fast-growing hot dog franchise with locations throughout the continental United States. The franchise exclusively uses hormone- and antibiotic-free proteins and fresh ingredients in each made-to-order item with its signature sweet and savory flavors.
- Locations: 93
- Founded: 2010
- Franchised: 2013
- Average gross revenue (EBITDA): $1,268,710
- Startup cost: $337,437 – $580,800
- Franchise fee: $40,000
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To learn more about FranShares and this unique opportunity, sign up for our platform on our website.
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