Opening a fast-food franchise can be a very lucrative business opportunity right now. It’s always nice to be your own boss. So, if you’re on a hunt to find a profitable fast food franchise, what about Wendy’s? The brand has come a long way from a standalone restaurant to a multi-billion dollar business today. Wendy’s currently operates 6,000 units in the United States and abroad.
Despite facing tough competition in the industry, Wendy’s continues to be the leader in the fast-food category, second only to McDonald’s in systemwide revenue, according to QSR.
However, it still faces formidable competition from Burger King and others in the QSR industry, like Chick-fil-A and Taco Bell. So if you’re planning to open a Wendy’s franchise in USA, here’s what you need to know.
|Year Business Began||1969|
|Estimated Number of Units||6,000|
With intentions of opening a large fast food business, founder Dave Thomas opened the first outlet of Wendy’s in 1969 in Columbus, Ohio, naming the brand after his daughter’s nickname. In 1972, Wendy’s started franchising under the company – Quality Is Our Recipe, LLC. However, the brand’s parent company remained Wendy’s International, Inc.
The franchisor allows franchisees to operate a quick-service restaurant with a limited menu of prepared-to-order food, including chicken sandwiches, hamburgers, and complementary items.Today, Wendy’s is the world’s third-largest fast food restaurant chain, with nearly 7,000 global units. However, in terms of sales, the company stands at number two only after McDonald’s.
The main center of attraction of Wendy’s remains its “old fashioned” hamburgers, which are square-shaped and made of fresh ground beef (unlike the frozen patties of other QSRs). The restaurant’s USP is its old ad campaign, “Where’s the Beef?” which started in the 1980s and has resurfaced recently to emphasize the meat’s quality and size.
In addition to burgers, Wendy’s menu has chicken sandwiches, French fries, salads, and desserts like the ice cream-based Frosty.
Available Franchise Options At Wendy’s
Wendy’s offers two types of franchise options: Traditional and Non-traditional Locations. Let’s discuss each of these options in detail:
Traditional Locations: The traditional option refers to the units with spacious space and a full-fledged menu. These restaurants are often found at standalone shops, malls, or multi-story buildings.
Non-Traditional Locations: Non-traditional outlets are one of the components of the company’s overall growth strategy. The franchisor team helps streamline a design to fit any number of high-traffic locations, including
- Colleges and University campuses
- Highway and travel plazas
- Office buildings
- Entertainment venues
- Service station co-brands
- Delivery only units
- Military bases
These high-traffic and high-visibility locations offer convenient access to the customers and may be a lucrative investment opportunity for franchise owners.
Wendy’s non-traditional development team offers support and training to franchisees, including prototype restaurant elevations and layouts, assistance with project proposals, and kitchen equipment designs.
Wendy’s Franchise In USA: Eligibility & Qualifications
The franchisor looks for people with a passion for serving fresh & quality food to customers and providing exceptional customer service. Here’s a list of the qualifications of a potential franchise owner:
- Restaurant owners with proven leadership abilities who have worked in single-unit or multi-unit restaurants (preferably quick service).
- Dedicated business owners with a focus on restaurant experience, local market expertise, and a strong desire to study and implement Wendy’s business model.
- Outstanding managerial and business skills.
- A growth-oriented perspective with the ambition to expand into several locations.
- Having access to sufficient funds to reinvest in Wendy’s reputation activation program and new restaurant development.
Wendy’s Franchise In USA: Financial Requirements & Initial Investment
Wendy’s is the best and the most profitable franchise opportunity in the USA right now. The brand’s reputation makes it an even more lucrative business decision. However, the initial cost required to open a new franchise is slightly higher than other brands.
- Minimum net worth of at least $1,000,000
- Minimum liquidity of at least $500,000
Fees and Estimated Costs
Estimated Initial Investments
|Initial Technical Assistance Fee||$50,000||$50,000|
Permits, Real Estate, Construction of Standard Prototype Restaurants, and Site Improvements:
|Financing (3 months)||$271,000||$551,000|
|Leasing (3 months)||$24,000||$63,500|
|Opening Inventory and Supplies||$13,000||$18,000|
Equipment and Signage:
|Financing (3 months)||$16,000||$26,000|
|Leasing (3 months)||N/A||N/A|
|Grand Opening Advertising||$7,500||$10,000|
|Additional Funds- 3 Months||$150,000||$192,000|
|Security Deposit, Utilities, Licenses and Other Prepaid Expenses||$20,000||$165,000|
|If franchise owner pays for Land, Equipment Building, Improvements and Signage||$1,887,500||$3,693,000|
|If franchisee finances the Land, Improvements, Building, Equipment and Signage||$556,500||$1,135,000|
|If franchisee leases the Land, Improvements, Building, Equipment and Signage||$329,500||$647,500|
|Type Of Fees||Amount|
|Royalty||4% of gross sales.|
|Local and Regional Advertising||0.5% of gross sales.|
|National Advertising||3.5% of gross sales.|
|Consent to Collateral Assignment||$10,000|
|Transfer Fees||$5,000 minimum|
|Audit||Entire expense of Audit|
|Renewal Fees||25% of the then-current technical assistance fee|
|Late Fee/Interest||$100 plus interest on the overdue amount|
|Costs and Attorney’s Fees||Varies|
|Development Agreement – Development Obligations Fee||$5,000 monthly payment|
|Continuous Operation Fees||Varies|
|Review of Proposed Offering Materials of Franchisee||$10,000|
|In-App Delivery Account Settlement Services||A per-transaction fee of 3.5%|
|Cyber Insurance Policy Premium Payment||A per restaurant fee of $875|
|Customer Care||A per restaurant fee of $85 per month.|
|FSA Re-Assessment Visit Fee||$242|
Wendy’s Franchise In USA: Financing Assistance
Wendy’s doesn’t provide any direct or indirect financing support to new franchise owners. However, franchisees can apply for loans from third-party lenders. However, the services offered by these lenders depend on several factors. In that case, franchisees can discuss the financing terms with lenders directly.
In some circumstances, the franchisor may offer its own leasing programs to new franchisees who fully comply with the company’s obligations. Additionally, the franchisor may lease or sublease a Wendy’s franchise as a part of the disposition of certain company restaurants.
However, in limited circumstances, the franchisor may provide loans, waivers, deferrals, setoffs, and other financial assistance in specific instances to existing franchisees.
Does Wendy’s Provide Any Support to New Franchisees ?
Wendy’s offers excellent support to the new franchise owners in various ways, from restaurant development to training support.
Operation Support :The franchisor provides ongoing direct support to franchisees at the field level. The company intends to offer A-level operations at every unit. It provides the resources, tools, and training while maintaining quality and profit margins.
Training :The franchisor focuses on providing A-level training to the upcoming franchisees. An initial training program may range between 20-24 weeks and will include online, instructor-led classroom, and on-the-job training. Training will be given at various certified training locations throughout the United States.
Restaurant Development :The restaurant development team provides a variety of support services, including coaching and “hands-on” support from a knowledgeable real estate team. This assistance may be useful for initial and ongoing construction services as well as site selection and layout.
Franchise Development :The Franchise Development team manages and oversees all operations related to the current franchise companies and their restaurants. This covers restaurant upkeep, franchise-to-franchise transfers, partial transfers, or changes in ownership structures, as well as franchise compliance (reimaging, obligations, etc.). They also manage the creation and administration of important development initiatives like Joint Capital Planning.
Government Relations :Wendy’s government relations team identifies issues that are significant to the brand and works to make sure that members of Congress and other government officials are aware of our position in order to make sure that our issues are understood. The political action committee (PAC) of Wendy’s is one of the biggest and busiest in the food sector.
Marketing :The brand is engaged in multiple national media platforms throughout the year, combined with local field marketing programs to provide a balanced marketing strategy that supports the franchise market’s needs.
Supply Chain Co-op :As a franchisee, you will join Wendy’s independent Quality Supply Chain Cooperative, which collaborates with top suppliers to offer Wendy’s restaurants goods and services that are high-quality, reliable, and economical.
Quality Assurance :Through a stringent ongoing process of product and restaurant inspections, the quality assurance department makes sure that Wendy’s maintains a high level of quality standards and food safety.
Information Technology :Through the use of cutting-edge technology, including mobile ordering/payment options, digital services, and support for the franchisee with ordering and reporting programs through a restaurant back-office system, Wendy’s aims to deliver an innovative customer experience.
Franchise Advisory Groups :The franchisor concentrates on particular issues such as marketing, operations, growth through development, and technology through franchise advisory groups and other engagements. All Wendy’s franchisees are important to the senior leadership team at Wendy’s, and they appreciate the regular opportunities to check in with them about initiatives and general feedback.
To apply for a new Wendy’s franchise in USA, just fill out the application form, and the franchisor team will get in touch with you soon. Here’s a step-by-step process for applying to Wendy’s franchise:
Introductory Call & Application :The first step is to send a proposal application to the franchisor. The application form is available on the official website. Alternatively, you can call the franchisor team.
Brand Overview and Geographical Discussion :The next step is to discuss about the site and the geographical location of the restaurant with the franchisor team.
Business Plan & Leadership Meeting :Attend a leadership meeting with industry experts and develop a business plan with the team. This is the most crucial step to consider.
Approval :As your application meets the eligibility criteria, you will receive approval. Now, undergo the training program with your staff.
Looking at the average profits and start-up cost of opening a Wendy’s franchise in USA, it can be an excellent opportunity. Wendy’s Return On Investment (ROI) is really appreciable. With Wendy’s worldwide presence and brand value, investors can recoup their initial investment within a couple of years, making it a great business opportunity.
Additionally, understanding the financial requirements, initial costs, and application process are the most crucial steps to your business success. On the other hand, Wendy’s has set up stringent eligibility criteria for granting licensing agreements. The franchisor offers priority to candidates with significant experience operating fast-food chains in the food and service industry.
In addition to the above qualifications, ideal candidates should work directly with the restaurant. However, you can hire a restaurant manager other than yourself, but the company strongly recommends involving yourself at the physical location.
Does Wendy’s Offer Franchises?
Yes, Wendy’s offers franchises in the United States and abroad. The company has over 7000 units operating in the US and abroad, with the majority of them franchise owned.
Is Wendy’s UK A Franchise?
No, Wendy’s is a US-based company that provides franchises in the US.
Who Owns Wendy’s Franchise In Usa?
Wendy’s has been franchising under the company – Quality Is Our Recipe, LLC. However, the brand’s parent company remained Wendy’s International, Inc.
How Much Does A Wendy’s Owner Make A Year?
Wendy’s franchise makes about $300,000 annually.
What Does Wendy’s Initial Franchise Fee Cover?
Wendy’s franchise fee covers the cost of a franchise agreement for 20 years.
How Much Does It Cost To Start A Wendys?
The estimated initial capital required for starting a new Wendy’s franchise in US is anywhere between $1,887,500 – $3,693,000.
Where Will Wendy’s Be Opening In The Uk?
Wendy’s opened five company-owned restaurants in Reading, Stratford, Oxford, Croydon, and Romford in the last year.
Disclaimer: The information contained in this article is for general information purposes only. The information is provided by StartupYo (SAB Weblabs Pvt. Ltd). While we endeavor to keep the information up to date and truest to the best of our knowledge, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.