The Ultimate Guide to Franchise Restaurants

Franchise restaurants are establishments licensed to operate under a brand name using specific products and business models. We’ll provide insight into what these restaurants are, the benefits and drawbacks of running a franchise, and how to launch and operate your franchised restaurant successfully.

What Is a Franchise Restaurant?

A franchise restaurant is a dining establishment that operates under a franchise agreement, entitling the owners to use a brand name they don’t own. The franchisee, or owner of the individual location, pays for the rights to use the franchise’s brand name, logo, business model, and products.

A franchise business structure allows individual franchise restaurants to benefit from the larger brand’s established reputation, best practices, and customer base. While they have to adhere to guidelines set by the franchisor regarding food quality, service standards, and restaurant decor, franchisees also get support in areas like marketing and supply chain management.

Pros and Cons of Investing in a Franchise Restaurant

As with any restaurant, franchises have advantages and disadvantages. Understanding the pros and cons of investing in a franchise can give you a better idea of what to expect from franchising and whether the franchise business model may be right for you.

Pros

Proven business model: Franchise restaurants operate on an established business model. This considerably reduces the risk of failure compared to starting a restaurant from scratch. As a franchisee, you can leverage the franchisor’s experience and expertise, learning from their best practices.
Brand recognition: Buying a franchise means investing in a known and trusted brand. This instant brand recognition can attract customers right from the start, giving you a head-start on marketing that can be expensive and time-consuming.
Ongoing support: Most franchisors provide continuous support to their franchisees. This can range from initial training, site selection, and construction support to long-term operational and marketing assistance. This support can be invaluable, especially for first-time operators.
Greater purchasing power: Being part of a franchise network often means benefiting from the franchisor’s purchasing power. Franchises often negotiate lower inventory, equipment, and supplies prices, saving individual franchisees money.
Easier access to financing: Financial institutions are often more willing to lend to franchisees due to the lower risk associated with the business model. This can be a significant advantage when covering the considerable costs of building out and equipping a restaurant.

Cons

High initial investment: Franchise restaurants often require a substantial upfront investment. This can include the franchise fee, construction costs, equipment, and inventory purchases. These costs can be considerable and may take two years or more to recoup.
Ongoing fees: As a franchisee, you must often pay the franchisor ongoing royalties and other fees. This is usually a percentage of your gross sales, regardless of your profitability.
Limited creativity and flexibility: While a proven business model is a plus, you have less freedom to make decisions. The franchisor sets the menu, decor, uniform, and operating procedures. This lack of control may not suit entrepreneurs who prefer flexibility in running their businesses.
Dependence on the franchisor’s reputation: Your success as a franchisee is closely tied to the brand’s overall reputation. Any negative press or scandal involving the franchisor can harm your business, even if your specific restaurant is performing well.
Potential profit sharing: Some franchisors require franchisees to share a portion of their profits. You’ll need to review the franchise agreement to understand all the obligations carefully.
Rigorous standards and rules: Franchisors often have strict rules and standards to ensure uniformity across all locations. Compliance with these standards can be challenging, and failure to meet them could lead to penalties or even termination of your franchise agreement.
Termination risk: Franchise agreements typically have termination clauses. If a franchisee doesn’t meet certain performance standards or violates the agreement, the franchisor has the right to terminate the contract.

How Much Does It Cost to Buy a Franchise Restaurant?

The cost of buying a franchise restaurant varies greatly depending on the specific brand you choose to affiliate with, the location of your restaurant, and the buildout required. Generally speaking, you’ll be required to pay a franchise fee of at least $10,000 to $25,000, the cost to acquire and renovate a property, staff costs, marketing fees, and ongoing expenses like royalties.

Here’s some detail on what you can expect to pay when opening a franchise:

Franchise Fees

A franchise fee is the initial cost a franchisee must pay to gain the rights to operate a franchise. These fees typically cover the franchisor’s administrative expenses, training, site assistance, and the right to use the franchisor’s trademarked brand, including their name, logo, and other materials.

Franchise fees can vary significantly based on the brand’s recognition, success, and the resources provided by the franchisor, but generally range from $10,000 to $50,000. However, some high-profile restaurant franchises can command fees of $100,000 or more.

Real Estate Costs

Real estate costs are the expenses associated with securing a physical location for your franchise to operate. These costs vary greatly depending on the size, location, and whether you buy or lease the property. Also included are costs associated with renovating the space to meet the franchisor’s specifications, which include interior design, signage, and equipment installation.

If you are leasing, monthly rental rates could range from a few thousand dollars to tens of thousands. If you are purchasing a property, you can expect to pay several hundred thousand dollars to a few million. However, if you buy and later close or move your franchise, you can often recoup a large portion of your real estate costs by selling the property.

Marketing Fees

Marketing fees charged by some franchisors contribute to the brand’s regional and national advertising efforts. These fees are sometimes a percentage of your gross sales – often between 1% and 4% – and are used to promote the brand through various marketing activities such as social media advertising, TV commercials, print ads, and promotional campaigns.

While you benefit from the franchisor’s marketing efforts, you may still need to budget for local marketing to raise awareness of your specific location.

Royalties

Royalties are ongoing payments that franchisees make to franchisors in return for the continuous use of the franchisor’s brand name and business model. The royalty fees also often cover the franchisor’s support services, such as training, operational support, and updates to the business model.

Royalty fees are typically calculated as a percentage of the gross sales of the franchise restaurant and often range from 4% to 8%. Some franchisors may also have a minimum monthly royalty fee, which franchisees must pay regardless of their sales volume.

How To Open a Franchise Restaurant

Opening a franchise restaurant typically requires following a well-formed process established by a franchisor. While the process is exciting, it’s often much more complex than opening a standalone restaurant.

Here’s an outline of the process for establishing a new franchise restaurant:

Thoroughly research franchise opportunities. Start with extensive research into available franchise opportunities, industry trends, and market demand in your planned location. Analyze the success rate, brand reputation, and support system each franchisor offers before making a decision.
Hire a consultant with experience opening franchise concepts. If you’re new to franchises, consider engaging a professional consultant with experience opening franchise restaurants. These consultants can provide valuable advice, prevent costly mistakes, and help streamline the process. For example, consider consultants like Monte Silva, who have a proven track record in this field.
Understand the financial commitment. Familiarize yourself with all the costs of opening and operating a franchise restaurant. This includes franchise fees, real estate costs, marketing fees, and royalties. Review the specific costs of individual franchisors and prepare a business plan to manage these expenses.
Arrange your finances. Ensure you have adequate funds to cover the initial investment and running costs until the restaurant becomes profitable. This typically involves arranging debt financing as saving or raising equity funds to cover part of your upfront costs.
Meet compliance requirements. Consult an attorney to understand the legal requirements, franchise agreements, and other regulations related to owning a franchise restaurant in your desired location.
Choose a location. Decide on a location that ensures high traffic and easy accessibility for your target audience. It should also be in line with the brand image of the franchisor.
Recruit and train staff to follow brand standards. A well-trained team can enhance customer experience and ensure smooth operations. Make adequate provisions for their training as per the guidelines of the franchisor.
Make the most of marketing and promotion. Use online and offline marketing strategies to create brand awareness and attract customers. This could involve social media advertising, local radio spots, hosting a grand opening event, and other steps recommended by the franchisor.

Owning a franchise restaurant is a significant commitment. It requires a strong dedication to a brand and its operational standards, as well as a relentless focus on customer satisfaction. However, if you follow the process carefully, partner with a strong franchisor, and manage your location effectively, it can be a rewarding and satisfying experience.

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Product and Company News

Kickfin Makes the 2026 Inc. 5000 — Again. And We’re Just Getting Started.

For the third year running, Kickfin has been named to the Inc. 5000 — Inc. magazine’s definitive ranking of the fastest-growing private companies in America — earning our place once again among the fastest-growing companies in restaurant and hospitality technology.

Three years on the Inc. 5000 isn’t a lucky streak. It’s a scoreboard — and it says the same thing every year: the industry is moving off cash, and it’s moving to Kickfin.

Restaurants and hospitality groups are walking away from cash tip-outs, spreadsheets, and pay cards — and they’re not looking back.

Growth that’s built on getting operators out of the cash business

Three straight years on this list is the result of one simple idea taking hold across the industry — but the metric we’re proudest of isn’t ours. It’s our customers’.

Operators are trading 3 a.m. bank runs, $10,000 in the safe, and 45 minutes of manual tip math per shift for something that takes seconds. Southern Proper Hospitality went from three to four bank runs a week to one a month. RA Ventures — 55+ locations across three brands — handed managers back the four hours a night they used to lose to counting cash and paperwork, and eliminated bank runs entirely. At one of its concepts, 98% of employees opted into instant payouts the moment they had the choice. That’s not a software win. That’s giving managers their nights back — and employees their money faster.

We hit this ranking through a stretch that tested every operator in the country: labor shortages, rising costs, and razor-thin margins. Kickfin grew because in that environment, cutting hours of admin and eliminating cash risk stopped being a nice-to-have and became survival.

Why operators keep choosing Kickfin

Three things separate us in a category we’ve defined:

Tips go straight to the bank account employees already have. No proprietary card. No transfer fees to touch their own money. No credit checks, no age restrictions, no financial product nobody asked for. Marco’s Pizza chose Kickfin specifically to avoid handing staff a pay card. Rock N’ Roll Sushi eliminated the $1.50-per-shift fee employees were paying just to access their own tips somewhere else.

Tip math is calculated straight from the POS. Toast, Square, Micros, Lightspeed, R365, Union, SkyTab — Kickfin reads the shift data and calculates pools and shares automatically. No exports, no whiteboards, no “trust me, I did the math.”

Every payout is on an auditable digital ledger. Complete history by location, shift, and employee. When it’s time to answer a compliance question, the answer is already there.

The bigger story: this was never just about tips

Here’s what the ranking really signals. What started as the best way to pay out tips has become the disbursement infrastructure the hospitality industry runs money through — POS-native, API-first, and built for 50-state payroll compliance from day one.

Payroll and HCM platforms have noticed. Companies like iSolved, Auris, Adora, Netchex, and AllianceHCM are embedding Kickfin’s API to deliver instant tip and wage disbursement to their own restaurant customers. We’re not a feature bolted onto someone else’s stack — increasingly, we are the stack.

And we’re not slowing down. Something big is coming in early 2027 — the next chapter in how Kickfin moves money for the hospitality industry. We’re not ready to show all of it yet, but if the last three years are any indication, it’s worth watching this space.

The Inc. 5000 measures how fast a company has grown. What it can’t capture is why: we’re building the rails for how the entire hospitality industry pays its people. The tip management category is ours to lead today — and it’s only the beginning of what Kickfin is building.

Thank you — you built this list

Every place on the Inc. 5000 is really thousands of shift-end tip-outs that went off without a hitch, thousands of bank runs that never happened, and thousands of employees who got paid instantly and fairly. That’s on our customers. We owe this ranking to the operators who trusted us with the least glamorous, highest-stakes 20 minutes of their night — and to the teams who show up for them beyond business hours, because restaurants don’t clock out at 5.

We’re honored to be on the 2026 Inc. 5000. We’re more excited about what we’re building next.

See why the fastest-growing restaurants are ditching cash tip-outs for good. Book a demo →

Product and Company News

2025 Roundup: Your Favorite New Tip Management Features

2025 was a defining year for Kickfin and the customers who rely on our software to automate their tip management processes

Driven by direct customer feedback and the evolving realities of restaurant operations, our Product Development team delivered a wave of meaningful enhancements across tip calculation, integrations, user controls, and accounting.

Before we look ahead to 2026, here’s a look back at the product advancements that made Kickfin more robust, more flexible, and more ready to meet the demands of restaurant teams than any other tipping solution.

Advanced Tip Calculator Enhancements

n 2025, we significantly expanded the functionality of Kickfin’s Tip Calculator. Here are a few standout features that we released:

Separate Tips and Auto-Gratuities

Kickfin now tracks tips and auto-gratuities separately, allowing operators to report them independently to payroll and manage them differently for tax purposes.

This distinction is especially important in light of the 2025 No Tax on Tips legislation. While tipped employees no longer pay federal income tax on the first $25,000 in tips earned annually, auto-gratuities, service fees, and other compulsory charges remain taxable.

Kickfin ensures those earnings are categorized correctly from the start — reducing downstream payroll and compliance risk.

House Accounts for Service Charges

Not all service charges are distributed 100% to employees — and Kickfin allows you to handle that with “House Accounts.”

Operators can retain a portion of service charges while distributing the remainder to the team. This is particularly valuable for:

Special events and private dining
Paying out job roles that don’t typically participate in tip pools (e.g., event managers)
Maintaining clarity and transparency around service charge allocation

More Flexible Tip Share Logic

No two restaurants share tips the same way — and Kickfin’s calculator now supports even more real-world scenarios.

Operators can configure tip shares:

By shift or by check close, ensuring support staff are compensated appropriately even if they didn’t touch a specific check
By hours worked or split evenly, a level of flexibility that remains unique to Kickfin
With advanced rules for “remaining tips,” allowing operators to define how servers and bartenders split earnings after support positions are paid out.

These enhancements allow Kickfin to support everything from simple pools to highly complex policies.

Check-Level Edits for Greater Accuracy

POS data doesn’t always capture every nuance, so managers may need the ability to make changes.

Kickfin now supports individual check-level edits for:

Cash tips
Auto-gratuities
Check details and splits

This ensures large parties, special events, and edge cases are handled accurately.

Tip Calculator Change Log for Auditability

Any check-level change made by a manager is recorded in a detailed change log. This creates a clear audit trail, helping operators resolve questions quickly and reinforcing transparency and trust with staff.

Enhanced Functionality for Smarter Cash Handling

Thousands of restaurants use Kickfin because they don’t have enough cash on hand to pay out credit card tips, and they want to reduce the amount of cash handling in their restaurant altogether.

However, we know cash will probably always be a (small) part of the equation. Kickfin makes it easy for you to handle that with some added functionality:

Tips left in cash: If a diner leaves a pile of cash at your table, it might not get recorded in your POS. However, Kickfin allows you to record it and distribute it through our platform.
Cash payouts: Many operators may want to distribute all of the cash left in their register at the end of a business day to avoid bank runs for deposits. Again, that’s easy to do with Kickfin’s “Blended Payouts” feature.

Enhanced Support for Toast Delivery Service Tips

Kickfin now handles Toast Delivery Service tips more intelligently by excluding driver tips from the general tip pool and assigning those tips directly to the delivery driver. This ensures tips are distributed exactly as intended.

Kickfin delivers on all of those fronts by:

Freeing managers up from bank runs and the back office, so they can focus on everything that can’t be automated.
Ensuring employees walk out the door with their earnings already in their existing bank account, no waiting, no detours.
Helping operators stay compliant, track everything, and uncover new efficiencies.

Expanded POS and Payroll Integrations

New POS Integrations

In 2025, we expanded our POS ecosystem with new integrations including Union POS and rPOWER. POS integrations eliminate manual uploads, reduce errors, and enable real-time tip calculation and reconciliation. Learn more about integrating your POS with Kickfin.

New Payroll Integrations

We also launched new payroll integrations with ADP Run, Paylocity, and Restaurant365 Payroll.

Once activated, Kickfin generates export files that sync seamlessly with your payroll system — significantly reducing manual work for payroll teams.

Looking Ahead

platform that keeps pace with the ever-changing complexity of modern hospitality operations.

If you’re not yet using Kickfin, now is the time to see what advanced tip management really looks like 👉 Schedule a demo today!

If you’re already a Kickfin customer, our team is happy to walk you through what’s new. 👉 Schedule a quick consult to learn more.

And of course: Stay tuned for what’s to come in 2026!

Product and Company News

Kickfin Named to Deloitte Technology Fast 500 List for Second Consecutive Year

Kickfin is proud to announce that we have once again been named to the 2025 Deloitte Technology Fast 500™, a ranking of the fastest-growing technology, media, telecommunications, life sciences, fintech, and energy tech companies in North America, now in its 31st year.

Kickfin is the only company on the list purpose-built for restaurants and bars to automate tip management — marking another major milestone for our team, our partners and the thousands of restaurant operators who trust us to modernize their tip-pooling and payout workflows.

Why it matters

When it comes to tipping out employees, cash is no longer king — and needs are changing fast. Hospitality workers demand (and deserve!) faster, cashless payouts; burned-out managers need more hours in their day; and now more than ever, operators care about visibility, compliance, and employee satisfaction.

Kickfin delivers on all of those fronts by:

Freeing managers up from bank runs and the back office, so they can focus on everything that can’t be automated.
Ensuring employees walk out the door with their earnings already in their existing bank account, no waiting, no detours.
Helping operators stay compliant, track everything, and uncover new efficiencies.

What sets Kickfin apart

There’s a reason Kickfin is the best-in-class tip management solution.

Broader POS integrations: We’ve expanded our direct integrations with leading POS brands, including Toast, Square, SkyTab, Genius POS, Union, and more — so managers can pool and pay out tips in a matter of clicks.
Enhanced tip-pool logic and flexibility: Our platform automates even the complex tip pool policies, with more tip pooling and automated reconciliation features than any other solution, while keeping the end-user experience simple and intuitive.
Instant, cashless payouts: With fewer cash drawer runs and real time bank deposits, teams experience faster shift-close, fewer errors and improved satisfaction.
Built-in compliance and reporting: As tip-pooling regulations continue to evolve, Kickfin empowers customers with robust features like digital paper trails and payroll integrations to ensure accuracy and compliance from end to end.
Customer success focus: Our fully U.S.-based Customer Success team is partners with customers to make onboarding fast and easy, no matter how tricky your tip policy may be, so you get ROI right away.

A big thank you

We’re honored to be recognized by Deloitte, and even more excited about what comes next. For restaurant operators, managers and employees alike, the future of tip management is here, and we’re thrilled to be your partner.

Ready to see what automated tip pooling and instant payouts look like in action? Book a demo today!

Product and Company News, Technology and Software

New Kickfin Feature Alert: Blended Payouts Are Here!

Brand new feature, coming in hot!

As part of our latest product release, Kickfin now offers Blended Payouts for even easier, fully automated tip management and reconciliation.

Why Blended Payouts Matter

Now more than ever, restaurant guests use credit cards or digital payment methods instead of cash. For many operators, that means there isn’t enough cash on hand at the end of a shift to pay out tips. But employees still want to receive their payouts immediately after clock-out.

As our customers know, Kickfin solves for those cash shortages by automating and digitizing the payout process — giving you the power to send instant, cashless payouts directly to your employees’ bank of choice, 24/7/365.

The result: minimal cash handling and risk, better accuracy and tracking — and of course, fewer bank runs.

However, digitizing payouts often results in some leftover cash in the drawer. Over time, we’ve heard from customers who prefer to use up that cash to pay out tips, then distribute the remaining tip amounts via Kickfin.

With Blended Payouts, you can do just that — and still account for every penny paid out, quickly and accurately, within the Kickfin platform.

How Blended Payouts Work

As always, all Kickfin customers can still choose to split individual payment amounts between instant payouts and payroll. Once you enable the new Cash Payouts feature, you will now be able to account for any cash tip payments that were also distributed.

Note: This feature lives within Kickfin’s Tip Calculator, which means you must have an active POS integration to use it.

Once it’s enabled, you’ll see the new “Cash Payouts” button on the Payment Review screen.
After clicking the button, users will be able to enter the individual cash amounts that were distributed to employees.
Back on the Review screen, you’ll see instant payout, payroll, and cash payment amounts for each employee. All three payment methods will have their own line items and be accounted for under your Payment Details.

Watch here for a full walkthrough of the new feature.

Ready to enable Blended Payouts?

If you’re a current customer, in touch with our Customer Success team at support@kickfin.com to activate this new feature.

(Not a customer yet? Click here to see Kickfin in action and learn how you can automate tip pooling and payouts!)