There is a very simple answer to this question and there is a more complicated answer. I am going to give you both of the answers today. Think about it, how does any company make money? It doesn’t matter what industry you are talking about, all businesses make money the same way. They sell products to consumers. I, as a writer, sell my services to others. Grocery stores sell their items to us, as do clothing stores, restaurants, and fast-food establishments. But, there are ways that they make ‘more money.’ Which also goes across the board for most businesses. There are sales, clearance, buy 1 get one 1/2 off, and a multitude of other ways. When you really sit down and analyze how a fast-food establishment earns money, it is going to make you really stop and think. I am going to tell you little secrets that nobody but the fast-food industry knows.
How do fast food restaurants make money? They have secrets! They have a special combination of ingredients that makes their cheeseburgers taste so much better than when we cook them at home. When you buy multiple items, they make more money. Fountain drinks actually have a higher profit margin than just ordering a burger. That is why they push for you to include a drink, no matter what your initial purchase is. They offer combo meals, you can up-size for a small/cheap fee, and they make money.
I am going to provide you with information that fast-food establishments don’t really want you to know. I will enlighten you on how they make so much money, besides the obvious (we all LOVE fast food). I am going to explain the tips and tricks they use to get you to buy more food, which in turn makes them more money.
How is a fast-food restaurant profitable?
It goes without saying; there are multiple fast-food establishments in every single town in the United States. They are the first places we go to when we do not feel like cooking or when we are craving those amazing fast-food french fries. That is how the fast-food industry is so profitable. Think about it, when you go to a fast-food restaurant, 98% of the time you order the ‘combo.’ You get your burger, fries, and a drink. Everything that you want and need in a meal. Sometimes they will offer or talk you into a dessert option, which adds to their profit. If you order just a burger and fries, they tempt you to add a drink. “Make it a combo?” Normally, we do so. Or you go there to order a certain thing, you see all of the wonderful looking pictures, and you end up ordering more food or you order something different that you initially went there for. That is how fast food is profitable.
How do restaurants make the most money?
Restaurants make the most money by offering their combo meals. But are you really saving money by ordering them? Next time you go out to eat at any fast food establishment, add it up. Normally you are only saving between seven and twelve cents when you order the combo meal. Whether it is a fast-food restaurant or a regular restaurant, money is made when they sell more products than what they are spending on said product. It is a balancing act for any restaurant to make a profit. They have to take into account their monthly expenses; rent, electricity, food costs, wages, and a lot more. It is not an easy task to run a restaurant of any kind. But fast food has it down to a science as you can tell just driving through your town. If they were not making a profit, they wouldn’t be in business and wouldn’t be hiring employees.
What is the number one fast-food chain?
Did you realize there are actually fifty fast-food chains in the United States (and abroad)? I knew there was a lot, but I had no idea that there were fifty, even though I know most of them on the list, it never registered just how many. So, who do you think is the number one fast-food chain? I bet you guessed right! Mcdonald’s is the correct answer. In 2018 they made over 38 million dollars, compared to 19 million for the number 2 fast-food chain on the list. Numbers three, four, and five made right at or slightly above the 10 million dollar mark. It was no surprise to me that Mcdonald’s was on the top of the list. It does surprise me, however, some of the establishments that are on the list, as I do not consider them “fast-food.”
What is the cheapest fast-food franchise to open?
There are a lot of expenses that are involved in opening a fast-food franchise, depending on the fast-food chain. For example, McDonald’s costs you between 1.2 and 2.2 million dollars. There is a franchise fee, a minimum liquid asset requirement, plus ongoing fees. Chick-fil-A is the cheapest fast-food franchise to open. It will only cost you $10,000. Yes, that is still a lot of money, but nowhere near what you will shell out to open a Mcdonald’s. The $10,000 is for the franchise fee. There are no start-up costs, no minimum liquid asset requirement, no minimum net worth requirement. Chick-fil-A funds your start-up costs and there are ongoing fees. But again, $10,000 beats having to pay millions to get started.
Conclusion
That was a lot of information. McDonald’s is number one on the list for making the most money in the fast-food industry. Chick-fil-A is the cheapest franchise to open and everything in between. Don’t forget, next time you go to a fast-food establishment, just for the sake of knowing; do the math to see just how much money you are saving by purchasing the combo meal. By all means, enjoy the largest combo that they have!