Here’s Why You Can’t Franchise Chipotle or 3 Other Restaurants
Keep on dreaming if you were hoping to sell your own extra guac.
The biggest food brands that come to mind have franchises all over the United States—McDonald’s, Subway, Dunkin’, and more. Places like Chipotle, Starbucks, and White Castle, however, never got on the franchising bandwagon.
The reason these places don’t franchise is mainly that the respective brands want to have quality control. Chipotle spokesperson Chris Arnold says the fast-casual restaurant doesn’t need franchises for business purposes—and doing so could hurt their brand. “When you franchise, you give up control over how restaurants are run, and that can compromise the experience,” Arnold says. “What’s more, our business model is so strong, we would rather not sell off our revenues to franchisees in exchange for only a small percentage of that.” That said, before Chipotle picked up steam, they did have a handful of franchises. Here are 13 success stories from restaurant owners.
Starbucks has a similar reason for their lack of franchises. Former CEO Howard Schultz said in 2016 that franchises are unnecessary middlemen. “So much of what we’ve succeeded in is based on the values and culture of the company, and I never believed we could do that in the franchise system where the people weren’t working for the company,” he says. Other restaurants that also don’t offer this business model include White Castle and In-N-Out. But most fast-food restaurants embrace the franchise business. These are the first locations of 8 famous fast-food restaurants.
Franchises are a business structure that allows people to operate a business, goods, or services, under the main owner, CEO, or company—aka the “franchisor”—using the business name and systems for a fee. Opening a new franchise location costs the franchise anywhere from $20,000 to $50,000. And that’s not the only fee. You also need to pay for supplies, legal fees, and more to open your own—and it definitely won’t be a Chipotle, Starbucks, White Castle, or In-N-Out. Read on to find out the 15 most convenient restaurant chains.