What Restaurants Franchise? Opportunities and Costs to Consider in 2027

Restaurant franchising in the United States spans more than 238,000 quick-service and full-service locations, and those sectors are projected to generate over $400 billion in revenue by 2027. The restaurant sector has seen remarkable growth over the past three decades, with industry sales roughly doubling since the turn of the millennium.

With over one million restaurant locations currently operating in the United States, more than 90% of which employ fewer than fifty people, the market is large, competitive, and still expanding.

If you are asking what restaurants franchise in 2027, the appeal is straightforward: you can enter a large, established market without building an operating model entirely from scratch. Franchises often achieve stronger starts than independent businesses because they inherit an established reputation, a refined business model, and an existing marketplace position, giving new locations instant brand recognition and a ready customer base from day one.

For entrepreneurs and investors, that head start also extends to marketing. Franchise owners benefit from their parent company's digital infrastructure, national marketing campaigns, and promotional offers, resources that would take years and significant capital to build independently.

It still demands substantial capital, and the amount you need depends heavily on the restaurant format and property requirements.

Below we examine the main franchise models worth considering for 2027 and the questions that should shape your decision before you become a franchise owner. 

What Does It Mean for a Restaurant to Franchise?

A restaurant franchise is a licensing arrangement that allows an operator to open a location under an established brand and use its operating system. In return, the franchisee pays an initial fee and ongoing royalties.

The franchise agreement is a legally binding document that defines the rights and responsibilities of both parties. It typically covers the franchisor's obligation to provide training programs, operational support, and marketing resources, as well as the franchisee's duty to operate within the established system and uphold brand standards.

The franchisor owns the brand and sets those standards; the franchisee funds and runs the location within that framework.

The Major Categories of Restaurant Franchises

Restaurant franchise opportunities vary widely in format, service model, and operating demands. Understanding the main categories makes it easier to compare what each requires.

Quick-Service Restaurant (QSR) Franchises

Quick-service restaurants account for well over 80% of franchised locations across the QSR and full-service restaurant categories. They use standardized menus and operating systems built around speed, with many placing drive-thru service at the center of the format.

This category includes familiar brands such as McDonald's and Dairy Queen. Among traditional restaurant formats, QSRs often provide the lowest entry point, particularly when a franchise brand offers smaller or more flexible formats.

Fast Casual Franchises

Fast-casual franchises offer higher-quality ingredients and a slightly elevated price point, usually without full table service. Customers order at the counter or digitally, which keeps the format more streamlined than a full-service restaurant.

Many fast-casual franchises require an initial investment of roughly $400,000 to $800,000, although costs vary considerably by concept and location. The fast-casual chicken segment generates about $34 billion annually. Mexican concepts and smash burger brands also continue to attract franchise interest.

Full-Service Restaurant Franchises

Full-service restaurant franchises provide table service and generally require larger premises than QSR or fast casual concepts. The extra space and staffing push investment higher, with many concepts costing around $1 million to $3 million or more to open.

This is a smaller segment of restaurant franchising, but it includes established casual and family dining brands. Fine dining franchise concepts also exist, although they remain relatively rare.

Food Kiosk and Coffee Franchise Opportunities

Food kiosks and compact coffee franchises are often among the lower-cost routes into restaurant franchising because they require less space and a smaller build-out. Some limited-format concepts can start at around $100,000, although established coffee kiosk brands may require considerably more.

Kiosks are common in airports and malls, and they also suit corporate campuses with reliable foot traffic. Coffee remains an active area for franchise expansion because the model adapts well to smaller, convenience-led locations.

How Much Does It Cost to Buy a Restaurant Franchise?

Investing in a restaurant franchise means balancing the backing of a proven brand against the realities of day-to-day operations and total upfront capital. Initial investments typically range from $200,000 to $2 million depending on the format and location, though limited concepts may cost less and large full-service restaurants can cost considerably more.

When comparing available restaurant franchises, focus on the total cash required rather than franchise fees alone.

• Franchise fee: Often $25,000 to $50,000, paid once when you sign the agreement.
• Build-out and opening costs: The premises, equipment, and initial inventory can cost $75,000 to $2.5 million, depending on the format.
• Working capital: Plan to reserve enough cash to cover three to six months of operating expenses while the location builds sales.
• Ongoing fees: Royalties commonly range from 4% to 8% of gross sales. Franchisees may also contribute 1% to 4% toward the brand's marketing fund.

Beyond the initial outlay, ongoing fees and operating costs can significantly affect longterm profitability; healthy EBITDA margins typically range from 12% to 20%, with top QSR and fast-casual performers exceeding 18%. Savvy investors increasingly measure returns through cash-on-cash rather than topline sales, and lenders tend to favour franchise businesses over independent start-ups given their proven models and brand recognition.

The Franchise Disclosure Document will show the actual financial commitment attached to any specific opportunity.

How to Evaluate a Restaurant Franchise Opportunity

A familiar brand can still be a poor investment in the wrong market or under weak franchise management. Before you commit, examine the evidence behind the sales pitch and speak to people already operating within the system. For broader guidance on entering a franchise system, the Federal Trade Commission's Consumer's Guide to Buying a Franchise is a useful starting point.

• Read the Franchise Disclosure Document: The Federal Trade Commission requires the FDD to contain 23 disclosure items. Pay particular attention to Item 19, which contains any financial performance claims the franchisor chooses to make, and Item 20, which shows location growth, closures, transfers, and franchisee information.
• Contact current and former franchisees: Use the details in Item 20 to ask about profitability, the support they received, and whether they would make the same investment again. Their answers can reveal gaps between the franchise offer and the day-to-day experience.
• Confirm your territory rights: Check whether the agreement protects your area and whether the franchisor can approve another franchise or company-owned location nearby.
• Assess the site selection process: Ask how the franchisor evaluates local demand and competitor saturation before approving a location. Established brands should be able to explain the data behind their decision.
• Review the technology platform: Look at how loyalty, online ordering, and the point-of-sale system work across franchise locations. A fragmented setup can make local operations harder and limit what the wider brand can learn from guest behavior.
• Use a franchise attorney: Ask an experienced attorney to review the FDD and franchise agreement before you sign. They can identify restrictive terms, additional costs, or inconsistencies that may be difficult to change later.

Good due diligence will not remove every commercial risk, but it should give you enough evidence to decide whether the opportunity deserves your investment.

What to Look for in a Restaurant Franchise's Technology Stack

A franchise technology stack should work consistently across every location. When individual units use disconnected systems, guests receive an uneven experience and the franchisor loses the system-wide data needed to support franchisees effectively.

•  Standardized loyalty program: Guests should be able to earn and redeem rewards across participating locations. A shared platform also allows the brand to coordinate promotions while giving franchise owners access to relevant local insights.
•  Integrated online and mobile ordering: Digital orders should connect with the point-of-sale and loyalty systems so customer activity remains accurate across channels. This creates a smoother ordering experience and gives marketing teams better information for encouraging repeat visits.
•  Centralized guest data:  Aggregating anonymized data across the franchise network helps the franchisor identify wider trends and compare campaign performance. Individual locations can then make decisions based on more than their own limited customer sample.

Used together, these capabilities can support restaurant sales growth by increasing visit frequency and making campaigns more relevant. Paytronix reports that Toastique increased visit frequency by 15% after introducing a centralized guest engagement platform and more personalized loyalty campaigns.