Want to Open a Burger Franchise? Pros and Cons

Opening a burger franchise can be an exciting opportunity for entrepreneurs looking to enter the fast-food industry with the support of an established brand. Burgers will never go out of style and the market skews all ages, income levels, and locations. With so many to choose from, it’s best to research a few before diving in. Known for its burgers, fries, and drive-thru service, Checkers has built a loyal customer base across the U.S. and is a good starting point to research.

Like any business venture, it comes with specific costs, requirements, and operational considerations that must be weighed carefully. From franchise fees and royalty payments to marketing contributions and site selection, understanding the pros and cons of opening a Checkers franchise is essential to determining whether it’s the right investment for you. Let’s dive into the key factors to consider before taking the leap.

Pros of Opening a Checkers Franchise

1. Established Brand with Loyal Customers
   • Checkers is a well-known fast-food chain, particularly famous for its burgers, fries, and drive-thru service. This recognition means you don’t have to build a brand from scratch, and customer trust is already established.
2. Multiple Revenue Streams
   • Checkers offers both drive-thru and walk-up services, catering to different types of customers. This model can lead to higher sales, as it captures both in-car customers and foot traffic.
3. Support and Training
   • As a franchisee, you’ll receive extensive training and ongoing operational support. Checkers provides assistance in site selection, construction, and marketing, which can be particularly helpful for new entrepreneurs.
4. Menu Appeal and Flexibility
   • The menu includes a wide range of popular fast-food items, which attract a broad demographic. Additionally, Checkers frequently introduces new menu items to stay relevant and competitive in the market.
5. Marketing Power
   • Checkers invests in national and regional marketing campaigns, which benefit franchisees by increasing brand visibility and driving traffic to locations.

Cons of Opening a Checkers Franchise

1. Franchise Fees and Royalty Costs
   • The franchise fee is a one-time cost of about $30,000, which is moderate compared to some other fast-food chains but still a significant initial investment.
   • Ongoing royalty fees are typically around 4-5% of gross sales, which can impact profitability, especially during the early stages of the business.
2. Advertising or Marketing Fees
   • Franchisees are usually required to contribute to a marketing or advertising fund, often 4% of sales. This fee helps cover national and regional advertising but represents another fixed cost that can affect your bottom line. Checkers Co-op fees are determined by individual Designated Marketing Area (DMA) Co-ops
3. High Initial Capital Requirements
   • Beyond the franchise fee, the total investment required to open a Checkers location can be high, ranging from $200,000 to $1 million depending on location, equipment, and construction. This can be a substantial hurdle for new entrepreneurs who may need to secure financing. Before you even invest, Checkers requires showing $900,000 minimum net worth, of which $350,000 is liquid per location.
4. Strict Operational Standards
   • Checkers has a standardized way of running its franchises, which leaves little room for customization or innovation at the local level. This can be frustrating if you have creative ideas you want to implement.
5. Site Requirements
   • Checkers locations typically require a high-traffic area and specific property sizes to accommodate their double drive-thru format, which can make finding the right real estate challenging and expensive.

Questions to Delve Deeper

1. What is your budget for the initial investment, including franchise fees, real estate, equipment, and build-out costs?
   • Knowing your financial resources can help determine whether opening a Checkers location is feasible for you. Will you need financing or investors?
2. What is your experience with managing a fast-food or high-volume business?
   • Running a burger franchise requires efficiency, attention to detail, and often long hours. How familiar are you with this industry or with managing a team?
3. What are the demographic and market trends in your desired location?
   • It’s important to assess whether the local area has sufficient demand for a Checkers franchise. Have you researched customer preferences and local competition?
4. How do you feel about adhering to strict corporate guidelines?
   • Some franchisees appreciate the structure, while others find it limiting. Are you comfortable following a highly standardized business model, or do you want more creative control?
5. What is your long-term plan for scaling or growing your franchise portfolio?
   • Some franchisees start with one location and expand over time. Is this part of your plan, and have you considered the resources and time commitment required to scale?
6. How do you plan to handle staffing and management?
   • Fast-food franchises typically require a larger team. Have you thought about your hiring process, training, and employee management strategies to ensure smooth operations?
7. How familiar are you with local zoning laws and real estate markets?
   • Securing a prime location is critical to the success of a fast-food franchise. What is your plan for finding and negotiating property deals?

By answering these questions and weighing the pros and cons, a new entrepreneur can get a clearer picture of whether opening a Checkers franchise is the right business move for them.