McDonald’s and 19 Other Franchises That Could Make You Rich

John Csiszar
·5 min read
blackwaterimages / Getty Images
blackwaterimages / Getty Images

If you dream of opening your own business, join the crowd. In the midst of the coronavirus pandemic, Americans are filing business applications at the fastest rate in a decade, with 3.2 million applications filed in 2020, up from 2.7 million in 2019.

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If you’re like many Americans, the fear of failure may be one of your biggest obstacles if you’re considering starting your own business. And who could blame you for being afraid? About half of small businesses fail within five years of launching, and about two-thirds fail within 10 years, according to the Bureau of Labor Statistics.

Given the failure rate of new businesses, it’s not surprising that many aspiring business owners opt to become a franchisee rather than launch their own operation. If you buy a franchise, you get the benefit of operating an established brand with a proven system. But – as the Federal Trade Commission cautions – buying a franchise is no guarantee of success.

That’s why it’s important to consider franchise options carefully before investing in one. With costs varying widely, you want to ensure you get the most bang for your buck. To help, GOBankingRates analyzed Franchise Direct’s top 100 franchises of 2021 to identify those most likely to be lucrative based on their track records, startup costs and ongoing fees. They’re ranked from least to most likely to be financially successful.

GOBankingRates considered only U.S.-headquartered franchises and used five factors from Franchise Direct to rank each franchise:

  • Overall rank of a franchise in Franchise Direct’s top 100 list

  • The average initial franchise fee for each franchise

  • The average estimated initial investment minus the average franchise fee

  • The royalty fee, which is a regular payment made to the franchisor that is a percentage of gross sales

  • Advertising or marketing fee

If you’re thinking about buying a franchise, find out which ones are more likely to make you rich.

Last updated: Mar. 30, 2021

Taco Bell
Taco Bell

Taco Bell

  • Average franchise fee: $35,000

  • Average initial investment minus franchise fee: $1,774,850

  • Royalty fee: 5.50%

  • Advertising fee: 4.25%

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Kokomo - Circa November 2016: McAlister's Deli Fast Casual Restaurant.
Kokomo - Circa November 2016: McAlister's Deli Fast Casual Restaurant.

McAlister's Deli

  • Average franchise fee: $25,000

  • Average initial investment minus franchise fee: $1,221,100

  • Royalty fee: 5.00%

  • Advertising fee: 3.13%

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San Ramon, California, United States - February 01, 2019: Facade of Mountain Mike's pizza restaurant in San Ramon, California, February, 2019.
San Ramon, California, United States - February 01, 2019: Facade of Mountain Mike's pizza restaurant in San Ramon, California, February, 2019.

Mountain Mike's Pizza

  • Average franchise fee: $22,500

  • Average initial investment minus franchise fee: $378,270

  • Royalty fee: 5.00%

  • Advertising fee: 3.00%

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helping-senior-grandma
helping-senior-grandma

Home Instead

  • Average franchise fee: $55,000

  • Average initial investment minus franchise fee: $61,905

  • Royalty fee: 5.00%

  • Advertising fee: 2.00%

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Fort Collins, Colorado, USA - January 12, 2013: A person at a Jiffy Lube location in Denver, Colorado.
Fort Collins, Colorado, USA - January 12, 2013: A person at a Jiffy Lube location in Denver, Colorado.

Jiffy Lube

  • Average franchise fee: $17,500

  • Average initial investment minus franchise fee: $297,325

  • Royalty fee: 4.00%

  • Advertising fee: 9.00%

Dayton, Ohio, USA - May 29, 2016: The newest Burger King "20/20" restaurant design with a sleek, contemporary, futuristic industrial-look theme includes brick cladding, manicured landscaping and a covered drive-thru order point with digital order screens.
Dayton, Ohio, USA - May 29, 2016: The newest Burger King "20/20" restaurant design with a sleek, contemporary, futuristic industrial-look theme includes brick cladding, manicured landscaping and a covered drive-thru order point with digital order screens.

Burger King

  • Average franchise fee: $32,500

  • Average initial investment minus franchise fee: $1,833,350

  • Royalty fee: 4.50%

  • Advertising fee: 4.00%

Kansas City, MO / United States of America - February 18th, 2020 : Pizza Hut, downtown KC location.
Kansas City, MO / United States of America - February 18th, 2020 : Pizza Hut, downtown KC location.

Pizza Hut

  • Average franchise fee: $25,000

  • Average initial investment minus franchise fee: $1,190,250

  • Royalty fee: 6.00%

  • Advertising fee: 4.75%

Keller Williams Realty logo, sign.
Keller Williams Realty logo, sign.

Keller Williams Realty

  • Average franchise fee: $35,000

  • Average initial investment minus franchise fee: $225,471

  • Royalty fee: 6.00%

  • Advertising fee: 1.00%

St.
St.

Smoothie King

  • Average franchise fee: $27,500

  • Average initial investment minus franchise fee: $526,518

  • Royalty fee: 6.00%

  • Advertising fee: 5.00%

KFC
KFC

KFC

  • Average franchise fee: $20,000

  • Average initial investment minus franchise fee: $2,087,050

  • Royalty fee: 4.50%

  • Advertising fee: 4.50%

CLEVELAND, TN-JUNE 19, 2016: Great Clips hair care outlet.
CLEVELAND, TN-JUNE 19, 2016: Great Clips hair care outlet.

Great Clips

  • Average franchise fee: $20,000

  • Average initial investment minus franchise fee: $194,650

  • Royalty fee: 6.00%

  • Advertising fee: 5.00%

CHICAGO, USA - JUNE 26, 2013: People walk past Subway sandwich store in Chicago.
CHICAGO, USA - JUNE 26, 2013: People walk past Subway sandwich store in Chicago.

Subway

  • Average franchise fee: $15,000

  • Average initial investment minus franchise fee: $206,225

  • Royalty fee: 8.00%

  • Advertising fee: 4.50%

Eugene, OR, USA - March 26, 2017; This is the Exterior of a Baskin Robbins in Eugene, Oregon.
Eugene, OR, USA - March 26, 2017; This is the Exterior of a Baskin Robbins in Eugene, Oregon.

Baskin-Robbins

  • Average franchise fee: $18,750

  • Average initial investment minus franchise fee: $322,641

  • Royalty fee: 5.90%

  • Advertising fee: 5.00%

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McDonalds fast food chain
McDonalds fast food chain

McDonald's

  • Average franchise fee: $22,500

  • Average initial investment minus franchise fee: $1,363,000

  • Royalty fee: 4.00%

  • Advertising fee: 4.00%

Lafayette - Circa April 2019: Circle K retail gas station location.
Lafayette - Circa April 2019: Circle K retail gas station location.

Circle K

  • Average franchise fee: $12,500

  • Average initial investment minus franchise fee: $1,258,445

  • Royalty fee: 5.25%

  • Advertising fee: 1.00%

Waist up portrait of two car mechanics looking under hood of car in auto repair workshop, copy space.
Waist up portrait of two car mechanics looking under hood of car in auto repair workshop, copy space.

CARSTAR

  • Average franchise fee: $10,000

  • Average initial investment minus franchise fee: $541,250

  • Royalty fee: 5.50%

  • Advertising fee: 1.00%

Jersey-Mikes
Jersey-Mikes

Jersey Mike's

  • Average franchise fee: $18,500

  • Average initial investment minus franchise fee: $468,023

  • Royalty fee: 6.50%

  • Advertising fee: 1.00%

Hickory, NC, USA-21 June 18: Papa John's Pizza is an American restaurant franchise company, being the 3rd largest take-out and pizza delivery restaurant chain in the U.
Hickory, NC, USA-21 June 18: Papa John's Pizza is an American restaurant franchise company, being the 3rd largest take-out and pizza delivery restaurant chain in the U.

Papa John's

  • Average franchise fee: $12,500

  • Average initial investment minus franchise fee: $422,960

  • Royalty fee: 5.00%

  • Advertising fee: 3.00%

New York, New York, USA - November 13, 2011: People can be seen walking by the recently opened Century 21 discount department store on Broadway near Lincoln Center.
New York, New York, USA - November 13, 2011: People can be seen walking by the recently opened Century 21 discount department store on Broadway near Lincoln Center.

Century 21

  • Average franchise fee: $12,500

  • Average initial investment minus franchise fee: $268,775

  • Royalty fee: 6.00%

  • Advertising fee: 2.00%

NONTHABURI, THAILAND - 09 FEB 2018 : Domino's pizza restaurant sign with message Delivering Oven-Baked Goodness and Since 1960.
NONTHABURI, THAILAND - 09 FEB 2018 : Domino's pizza restaurant sign with message Delivering Oven-Baked Goodness and Since 1960.

Dominos

  • Average franchise fee: $5,000

  • Average initial investment minus franchise fee: $336,725

  • Royalty fee: 5.50%

  • Advertising fee: 4.00%

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Cameron Huddleston contributed to the reporting for this article.

Methodology: GOBankingRates looked at Franchise Direct’s Top 100 Franchises of 2021 across five factors to determine the top 20 franchises that could make you rich. The factors were as follows and all sourced from Franchise Direct: (1) Overall rank; (2) average of the low and high end initial franchise fees; (3) average of the low and high total initial investment minus the average franchise fee; (4) the percent of gross sales that will be deducted for royalty or service fees; and (5) the percent of gross sales that will be deducted for advertising or marketing fees. To be considered for this list the company offering the franchise had to be headquartered in the United States and have all the data for the factors above readily available. All factors were scored and combined, with the lowest score being best. In the final scoring, factor (1) was weighted 0.75 times as heavily as the other factors. All data was compiled on and up to date as of March 11, 2021.

Photo note: Some of the images in this article are representational and may not depict the company named.

This article originally appeared on GOBankingRates.com: McDonald’s and 19 Other Franchises That Could Make You Rich