Opening a franchise, while easier than some companies, is not necessarily the easiest thing in the world.
For one, there are thousands of companies out there to consider, so how do you choose the one with the most potential for you?
How do you make sure that the franchise you’re hoping to explore works with the financial and lifestyle constraints you have?
Not everyone wants to make pizzas until they retire, nor is a sandwich shop necessarily the path forward for you.
In this series, “opening a franchise, we’re taking a closer look at different options in the franchising space. It includes exploring reasons you may or may not want to partner with a specific company.
Some of the most famous names in the space may not be right for you.
Chick-fil-A
While the franchise fee of Chick-fil-A is a modest $10,000 (seen in comparison to alternatives), it’s about the only thing that is modest about it.
Choosing Chick-fil-A asa your franchise of choice may seem obtainable as there are no specific net worth requirements, but it’s not as easy as that. Nor is it the right choice for a lot of people.
You will soon realize that Chick-fil-A has an extremely convoluted way of operating, and that’s in addition to its mere 1% acceptance rate of new franchisees.
For instance, Chick-fil-A has ongoing fees of 15% as they’re originally covering costs, but they also take 50% of pretax profits. On top of that, the total cost to open a Chick-fil-A ranges from $585,500 to $3,337,000.
One of the main reasons why I don’t personally recommend this brand to aspiring franchisees is that you don’t build equity in what you’re working on. Instead, with the model, the company retains ownership of the location.
Can you make a decent living doing it? Absolutely. However, you’ll be smelling like fried food every single day as the company requires you taking an active role in managing it. On top of that, you’re limited to “owning” one location.
McDonald’s
Opening a McDonald’s franchise may seem like your dream with its mere 4% failure rate per year, but that’s not where the story ends.
McDonald’s has very strict requirements to opening a franchise, which includes 8–12 months of training. In addition, it costs $1.3 to 2.3 million to open a McDonald’s franchise according to their FDD. That number is if you exclude the cost of potentially buying land.
Since it’s already the largest fast-food franchisor in the world, many of the locations change hands when existing locations sell rather than new ones popping up.
If you have $500,000 in liquid assets and a minimum $1-2 million in overall net worth, it could be an option for you to look into.
If you think you can just own a McDonald’s, you’re wrong. There is a string of requirements that could eventually lead you down the path of significant wealth, but not without sacrifice. McDonald’s prefers owner-operators and typically requires you to divest other businesses.
However, opening a McDonald’s has the advantage over Chick-fil-A, for instance, that you can own several locations, particularly if your locations run well.
McDonald’s ongoing fees are considerable, with 4% royalties on sales, 4% marketing, and rent fees to McDonald’s when they own the land.
Owning a McDonald’s is a lifestyle choice as you’re required to take 8-12 months of training, with part being at the Hamburger University and working at actual stores. In some sense, they’re setting you up for success as you’re learning everything involved in running the operations.
However, managing it is no small feat, with each location typically having roughly 50 employees. To top it off, many of those are teens. Choosing the life of a McDonald’s owner surely isn’t for everyone.
Domino’s
| 🍕 Key Item | 📋 Domino’s Franchise Insight |
|---|---|
| Initial franchise fee | $10,000 for a single-store agreement (must have prior Domino’s management experience to qualify) |
| Total investment | $145,000 – $500,000 including build-out, equipment, security deposit, and initial inventory (costs vary widely depending on new build vs takeover) |
| Ongoing fees | 5.5% royalty + 4% national advertising fund; local store marketing is optional but encouraged for high-competition zones |
| Ownership requirements | Only existing team members who’ve completed Domino’s training and have internal approval can qualify—no external applicants accepted |
| Operational considerations |
• Franchisees must complete Franchise Management School and pass an approval process • Units often gross >$1M/year, but margins are razor-thin without scale or tight discipline |
| Hidden gotcha (consultant-level) | Delivery insurance requirements are steep—Domino’s mandates specific liability limits and fleet coverage that can exceed $8,000/year per vehicle. Many new owners overlook this when modeling driver reimbursement and hourly labor splits. |
| 🚀 Enquire | Talk to Thomas about opening a Domino’s ➜ |
Domino’s is the biggest pizza franchise, but there are various reasons you may or may not want to go down this line of business. With the main focus being delivery/carry out, there’s a significant portion of the typical food franchise operations that are turned easier with the model offered by Domino’s.
If you feel you excel at local marketing, Domino’s offers a business concept that is fairly straightforward.
One of the requirements to open a Domino’s franchise is a $250k net worth with $75k liquid. However, you may be able to have the company offer more leniency on that front if you can prove you’re a good operator.
A lot of managers of existing locations are encouraged to become franchise owners themselves, which is why Domino’s makes it easy to become one with their low $10k franchise fee.
If you don’t have experience at one of their stores, it makes it considerably less likely that you’ll be able to become an owner. Training includes going to Franchise Management School in Ann Arbor, so that’s an aspect you have to be ready for.
To be honest, I am very much a fan of their desire to promote internally, while it makes it harder for externals to join the business.
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