Is Shake Shack Franchise Profitable? – Capital Required, Fee, and Profit

Do you love burgers and looking for exciting opportunities in the Food & Beverages Industry? What about starting your own business by taking an license from a renowned brand? You can do so by becoming a Shake Shack Franchise.

In this guide, we’ll dive deep in to Shake Shack franchise with capital requirements, fee, profit, and step-by-step guidelines to get this franchise – and answer some common questions about the chain.

Overview of Shake Shack Franchise

Established in July 2004 by Danny Meyer in New York, US, Shake Shack is one of the fastest-growing American fast food chains. They are known for serving their delicious burgers, hot dogs, chicken burgers, fries, frozen custards, varieties of shakes, and beer & wine. The chain’s shakes are known to be “among the best in the industry”.

It has a wide presence of more than 400 active locations(Licensed and Self-owned and operated) across multiple cities in the US and other countries.

With further expansion plan through licensing across different countries will create an opportunity for interested F&B franchise prospects to join the ever-growing food industry.

Please continue reading if you are passionate about Food and Beverages franchises & this little snippet about the Shake Shack chain excites you.

We will offer comprehensive and well-researched information regarding the Shake Shack, along with its price, fees, profit margin, and—most importantly—the reason “Why” you need it.

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Shake Shack – The Journey

In early 2001, the chain started as a hot dog cart inside Madison square park, and it became quite popular among its consumers, which made them expand its menus to hamburgers, fries, shakes, and other items.

With its high-quality food at affordable prices, warm hospitality, and a commitment to crafting uplifting experiences, Shake Shack quickly became a cult brand with widespread appeal.

Key facts of Shake Shack franchise

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Why Consider owning a Shake Shack Franchise or Licensed outlet?

Now the question arises, why should someone prefer to open a Shake Shack licensed outlet over any other chains such as Iniburger, Jollibee, The Counter, Dixie Cream Donuts, and Panda express? Well, then, let me simplify it for you. There could be multiple reasons to start a licensed shake shack outlet, but we have highlighted a few prominent features supporting the ownership of this franchise.

• Shake shack offers a wide range of delicious menus at affordable prices, which helps them acquire a large number of consumers and build a robust customer base.
• Their outlets are almost all owned and operated by the franchise itself, which allows them to control their products and services thoroughly. As a result, the new licensed outlet owner can garner the franchise’s loyal fan base and make a successful investment.
• Usually, the franchise outlets are widely spread and need a floor area of more than 3000 sq. ft., which provides the chain to offers a world class ambience and services to its consumers.
• Its popularity is easily explained by the fact that the shakes served at its outlets are among the best in the business.
• Its licensing business has been benefiting the franchise across domestic and international markets. As per current data, the chain has over 177 licensed Shacks globally, and with more than 60 outlets planned to open by 2023 will create immense opportunities to join this franchise.

• The chain has above average exposure to high income consumers that enables them to garner an impressive profit margins regularly.
• Shake Shack franchise is continuously looking for qualified prospects who are interested in F&B Industry and planned to join the ever-growing business.

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How much does a Shake Shack Franchise Cost(Licensed outlets)?

As mentioned earlier, the Shake Shack doesn’t run any franchise program. However, the interested applicants can become a partner by owning a licensed outlet with all other given details.

To become a Shake Shack franchise owner, one would at least an initial investment between $1.5 million to $2.7 million. The initial investment of shake shack franchise includes the expenses such as Franchise fee, equipment charges, interior decor, branding and advertisement, and the initial inventory cost.

Moreover, the franchise fee for the shake shack is estimated to be around $40000, and to be an approved franchisee owner, one must have at least US $1 million in net worth and US $500,000 in liquid assets.

Additional Cost for Shake Shack

Typically, to run and maintain a franchise, one must adhere to their standards and are liable to pay a few additional costs such as Royalty fee, advertisement fee, maintenance fee, and a few other investments.

The on-going royalty fee for Shake Shack is around 5-6% of gross sales and brand fund contribution is 1%. Lastly, to get a necessary training, the franchise may charge an one-time training fee for the head chef for your outlet.

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How much is Shake Shack Franchise Profit Margin?

The majority of Shake Shack outlets are company owned and operated, and only limited number of outlets across the US and other countries are licensee operated. It enables the franchise to have necessary control over the quality and services.

Usually, A Shake Shack outlet owner may expect a gross profit margin of 30-35% and a net profit margin of 12-15%.

The net profit margin may vary depending on your expenses and location.

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Requirements to License a Shake Shakes?

The Shake shack franchise requirements are quite self-explanatory and to get a license, one must follow the franchise’s guidelines;

• Interest applicants should have necessary site area or flooring area, which can cater a larger set of consumers, preferably at busy street and min. floor area of 3000 sq. ft.
• The site should have Plenty of parking for guests, including exclusive curbside pick-up spots for digital orders.
• More details on site requirements can be checked here.
• Interested licensee must have the required investment capital to open a Shake shack outlet.

How to get a Shake Shack Franchise?

Getting a Shake Shack franchise requires a good amount of investment. Nevertheless, while this franchise may offer several benefits, sadly, it doesn’t run any franchise program. However, interested candidates can take up this franchise by becoming licensed operators.

To become a licensed operator for the domestic and international market, please visit their official website and understand more about its site requirements.

Fill up the personal and location details such as Name, Email, Phone number, street, city, state, and country.

Once you submit the necessary details, the franchise team will review your application and contact you based on their location feasibility.

Conclusion

There is no doubt that the Shake Shack franchise is an excellent choice when it comes to its brand values, expertise, and huge customer base. For a long time, Shake Shack has been an established player in the industry, and one shouldn’t miss the chance to get one.

In terms of profitability, the chain will offer impressive gross and net profit margins. As long as you are okay with being a licensed operator, this is a viable opportunity.

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