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Opening a major restaurant franchise is impossible for the average American. McDonald's usually requires $750,000 of non-borrowed personal resources before considering an application, according to its website. Taco Bell requires net worth of $1 million, while Burger King requires $1.5 million. The franchisee controversy is the latest in a string of problems for McDonald's. Employees were striking for better wages last week.
To take the McDonaldâs example further, the estimated total amount of money it costs to start a McDonaldâs franchise ranges from $500,000 to $1.6 million. Franchises, by definition, have ongoing costs to the franchiser company in the form of a percentage of sales or revenue. This percentage can range from 4 â 8%. Other disadvantages include lack of territory control or creativity with your own business, as well as a notable dearth of financing options from the franchiser.