Food & Beverage
Wendy's Franchise
A quick-service hamburger chain known for square patties and never-frozen beef, franchised primarily as traditional free-standing restaurants alongside a smaller "Frosty Cart" non-traditional format. Dave Thomas opened the first Wendy's in Columbus, Ohio in November 1969; the current franchisor entity, Quality Is Our Recipe, LLC, took over the U.S. franchise system from predecessor Wendy's International in a June 2015 securitization transaction. Franchised unit count grew in 2023 and 2024 before falling by a net 75 restaurants in 2025 as the system worked through closures.
Disclosed in the FDD's litigation section (Item 3)
Item 3 discloses the fallout from Wendy's 2015-2016 point-of-sale malware data breach: a consolidated multi-district financial-institution class action (settled, amount not disclosed in this Item) and a shareholder derivative suit alleging inadequate data-security governance, which settled in September 2021 with the company adopting IT/governance reforms and paying up to $950,000 in attorneys' fees.
Every franchisor has to file a document called an FDD before they can legally sell you a franchise. Buried in it are the two things a sales rep won't volunteer: what you'll actually spend to open, and whether existing locations are opening or closing. That's what's below, pulled straight from Wendy's's own filing.
What it costs to open
From the filing's investment breakdown -- not a "starting at" number a sales rep quoted you.
Franchise fee
$50,000
Total to open
$1,523,957–$2,992,000
Ongoing royalty
4% of gross sales
What you'd actually spend, over time
The upfront cost is only part of it. Plug in what you expect a location to bring in, and see the real total once royalties over a few years are added on top.
Defaulted to a rough food & beverage industry average, not a figure from Wendy's's own FDD -- change it to your own estimate.
Total cost of ownership over 5 years
$1,723,957 – $3,192,000
Startup investment
$1,523,957–$2,992,000
Royalty per year (4%)
$40,000
Total royalty, 5yr
$200,000
When would you break even?
Revenue alone doesn't tell you this -- it depends on what's left after rent, labor, and everything else. Wendy's's FDD doesn't disclose a reliable profit figure (most franchisors don't), so this starts from a typical food & beverage profit margin (~8%) and applies it to the revenue you entered above -- adjust the percentage to your own realistic estimate.
Defaulted to a general food & beverage industry benchmark, not a figure from Wendy's's own filing -- this is a starting point to adjust, not a promise about what franchisees actually make.
At that profit, you'd break even in about
19.0–37.4 years
Weigh that payback period against what you already know: Wendy's is currently losing locations. A long payback period on a shrinking brand is a very different bet than the same payback period on a growing one.
Is Wendy's actually growing?
Franchisors have to report, every year, how many locations opened, closed, or changed hands. Most franchise sites never show you this. Here it is:
Locations opened vs. closed, by year
ShrinkingFrom Item 20 of Wendy's's FDD, the section franchisors use to disclose real openings and closings.
| Year | Franchised units, start | Franchised units, end | Net change |
|---|---|---|---|
| 2022 | 5,535 | 5,591 | +56 |
| 2023 | 5,591 | 5,627 | +36 |
| 2024 | 5,627 | 5,552 | -75 |
Most recent year (2024): lost 75 franchised units, ending the year at 5,552 total.
What you're actually signing up for
The cost and growth numbers above are only part of the picture. These three FDD items are the ones a prospective franchisee tends to weigh most heavily once they're past the sticker price.
Training & ongoing support (Item 11)
Item 11: initial orientation and training program, project-management services available under the Franchise Development Program (for a separate Project Fee), and an optional Real Estate Procurement Program under which Wendy's itself sources and subleases the restaurant site.
Territory protection (Item 12)
Item 12: no exclusive territory of any kind -- Quality explicitly states franchisees may face competition from other Wendy's franchisees, company-owned restaurants, Frosty Carts, or other non-traditional formats without any distance restriction.
Renewal & termination terms (Item 17)
Item 17: 20-25 year term depending on lease length (5 years for a Frosty Cart), with a 10-year renewal term (5 years for a Frosty Cart) available if the franchisee is in good standing; a franchisee who abandons the franchise early owes a "Continuous Operations Fee" based on trailing royalty and ad-fund averages.
How Wendy's compares to other Food & Beverage franchises
Across the 35 food & beverage franchises we've hand-verified so far, the typical range to open runs $843,866–$2,063,296, with royalties averaging around 5.6% of gross sales (based on the 32 of them that charge a flat %-of-revenue royalty).
$617,800–$2,170,000 · 6% royalty
Slim Chickens$1,188,900–$4,944,000 · 5% royalty
Ziggi's Coffee$315,830–$2,093,361 · 6% royalty
Crumbl$848,566–$1,472,533 · 8% royalty
Little Caesars$376,500–$1,769,200 · 6% royalty
Jamba$480,850–$941,300 · 6% royalty
Tropical Smoothie Cafe$300,000–$720,500 · 6% royalty
Playa Bowls$188,675–$636,458 · 6% royalty
Kona Ice$114,730–$228,601 · non-%-of-revenue royalty
Firehouse Subs$166,671–$950,351 · 6% royalty
Wingstop$310,400–$1,048,500 · 6% royalty
Jersey Mike's Subs$436,176–$1,162,228 · 6.5% royalty
Dunkin'$532,400–$1,832,500 · 5.9% royalty
Popeyes Louisiana Kitchen$1,222,045–$3,923,245 · 5% royalty
Del Taco$1,461,200–$3,313,500 · 5% royalty
Blaze Pizza$757,000–$1,297,100 · 5% royalty
Church's Texas Chicken$1,202,400–$1,886,300 · 5% royalty
MOD Pizza$924,732–$1,220,633 · 5% royalty
Twin Peaks$2,959,000–$5,734,000 · 5% royalty
McDonald's$1,470,500–$2,642,000 · 5% royalty
Subway$263,000–$630,000 · 8% royalty
Taco Bell$1,859,750–$4,312,200 · 5.5% royalty
Domino's Pizza$231,450–$743,500 · 5.5% royalty
KFC$2,107,575–$4,155,000 · 5% royalty
Burger King$2,039,200–$4,730,600 · 4.5% royalty
Chick-fil-A$317,521–$3,463,155 · non-%-of-revenue royalty
Penn Station$507,500–$858,750 · non-%-of-revenue royalty
Nekter Juice Bar$243,155–$647,160 · 6% royalty
Jimmy John's$366,200–$733,500 · 6% royalty
Sonic Drive-In$1,485,200–$2,522,900 · 5% royalty
Papa John's$281,485–$890,267 · 5% royalty
Hungry Howie's Pizza & Subs$238,982–$697,322 · 5.5% royalty
Jack in the Box$1,909,500–$4,041,500 · 5% royalty
Marco's Pizza$286,477–$811,186 · 5.5% royalty
Keep going
- Wendy's and Sonic Drive-In are both food & beverage franchises; Sonic Drive-In's total investment starts about $38,757 lower than Wendy's's. Sonic Drive-In Franchise
- Wendy's and McDonald's are both food & beverage franchises; McDonald's's total investment starts about $53,457 lower than Wendy's's. McDonald's Franchise
Where this came from: Wendy's has no California DFPI entity at all (not even an exemption filing), so this entry is sourced entirely from Minnesota's CARDS registry: MN File No. 7666, Clean FDD issued March 28, 2025, filed 10/3/2025, effective 10/3/2025. hqLocation corrected from the FTC boilerplate Washington, DC address the automated parser picked up -- Item 1 gives the real principal business address as One Dave Thomas Boulevard, Dublin, OH. Item 5: the automated parser picked up the $5,000 Training Fee, but Wendy's real per-restaurant fee equivalent is the $50,000 Technical Assistance Fee due at signing (reduced to $25,000 for non-traditional sites, $12,500 for a Frosty Cart, $25,000 under the Franchise Flip program). Item 6: royalty varies 4-6% of Gross Sales by restaurant type -- 4% for traditional/"Groundbreaker" restaurants (used here, and the rate the parser should have found instead of the 6% rate that only applies to military-base/Frosty Cart/Build-to-Suit restaurants), 5% for restaurants under a legacy Pacesetter Development Agreement -- plus National Advertising of 1.50%-3.50% of Gross Sales and Local/Regional Advertising of 0.50%. Item 7 Total (cash): $1,523,957-$2,992,000 (as low as $393,191-$752,000 if the Technical Assistance Fee, building, and equipment are financed). Item 20 Table No. 1 confirmed. You can pull the same filing yourself from the California DFPI's public franchise search. Filed 2025-10-03. None of this is investment advice -- get the franchisor's current FDD and talk to a real attorney or accountant before you sign anything.
If you see a different unit count elsewhere: franchisors only have to refile their FDD annually, so the numbers here can run 6–18 months behind a franchisor's own real-time marketing claims -- which often aren't independently verified, and sometimes count signed-but-not-yet-open locations. A gap isn't necessarily an error on either side; it's two different snapshots in time from two different sources.