Waffle House is an iconic American restaurant chain that’s well-known for serving breakfast and being open 24 hours a day, 7 days a week. The chain started in 1955 in Georgia and has over 1,900 restaurants operating nationwide to date.
How much does it cost to open a Waffle House? Waffle House’s franchising fee ranges from $200,000 to $300,000. Overall cost can be estimated at $600,000 to $1,000,000 depending on your location, size of restaurant, and other startup fees. Take our franchise quiz to find out if Waffle House is right for you.
We’re going to break it to you gently now and let you know that Waffle House isn’t open for franchising to new operators at this time. Waffle House’s previous vice-chairman Bert Thornton cited the reason for this decisions that include maintaining the overall consistency of their brand from store to store.
But before you close the tab on this, there’s still a way you can operate this beloved breakfast place. But I do need to warn you the requirements aren’t easy. If you already own a Waffle House franchise, you do have the option to grow the business and the company may consider letting you operate a branch.
We’ll break down more of Waffle House’s statistics for you so keep on reading to better understand why this breakfast place has some very hefty requirements when it comes to franchising. Keep in mind that if you really want to open a Waffle House of your own, the company could change franchisee requirements at anytime in the future. You can also evaluate similar franchise concepts if you have a passion for serving breakfast around the clock at the bottom of this post.
Financial Requirements and Fees
Since Waffle House is not open for franchising and only limited knowledge is known of how much it would cost to open this restaurant, here is an unofficial estimate on what Waffle House’s financial requirements are and their franchising fees.
|Fees / Expenses
|$200,000 to $300,000
|$600,000 to $1,000,000
There’s not much data as of the moment but with this estimation, you can at least have an idea of how much capital you should prepare for when you wish to apply as a franchise operator with Waffle House.
Aside from franchising, you might wonder what else you can do to be a part of Waffle House. According to the brand’s website, you may get a chance to own a Waffle House stock. When you purchase a stock or share of a company, you become a part owner of that company. As a result, you get to participate in the benefits of a valuation increase or any dividends.
Unfortunately, the only way to invest in their company is for you to work with them directly through an employee stock purchase program. You can’t purchase shares through typical brokerage account since the company is not publicly traded.
But according to a WSJ report, if you did work as an employee for the company investing a portion of your paycheck into this stock could be a smart investment. According to the report, the value of Waffle House Inc stock has increased each year for more than 5 decades.
Average Sales / Revenue per Year
It’s a little difficult to get updated average sales for Waffle House because Joe Rogers Jr., the chairman, does not divulge their sales figures. However, a report by Restaurant Business Online stated that Waffle House’s 2022 revenue has reached around $1.3 billion.
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Waffle House Franchise Facts
|Waffle House, Inc
|They Do Not Allow Franchising
Waffle House was started by Joe Rogers Sr. and Tom Forkner in 1955 in Avondale Estates in Georgia. Rogers was already working in the food business while Forkner was working in real estate. The two were actually neighbors.
The most popular and highest profit item on the menu is the waffles. They also serve sandwich melts, pies, eggs, chili, and burgers. Despite being known as a place that served breakfast items, Waffle House does not serve pancakes.
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Waffle House gives customers a diner experience and one of those was the songs they played on their jukeboxes. They have a record label called Waffle House Records. These days, the old-school jukeboxes have been replaced by digital touch screens.
Valentine’s Day is the only day of the year when Waffle House accepts reservations. This special has been practiced since 2008. Keep this in mind when you’re looking for a way to pamper your significant other.
How Much Does Waffle House Make in Profit?
Waffle House is privately owned. They don’t share to the public how much they earn on average aside from the report we mentioned above that stated Waffle House makes around $1 billion in gross revenue annually.
As far as how much profit the company makes based on that revenue, the best we can do is compare profit margin to other restaurants. According to the Restaurant Resource Group, 2% – 6% profit margin can be expected. Using this rough estimate as a guide, Waffle House would net $40 million annually if they had a profit margin of only 4%. As you can see this is a model that depends on scale.
But there is one other thing they’ve disclosed to show us how big the business is: they use 2% of all the eggs produced in the United States.
Advantages of a Waffle House Franchise
In the event that you do get your hands on a Waffle House franchise, you might wonder what the advantages of owning this chain in your area are. Here are just some of the things Waffle House will do you proud once you get a license to operate them.
An Iconic Legend
Waffle House is very well-known especially in the southern parts of the United States. It’s a regional icon where everyone can get breakfast at any time of the day. Waffle House has already established itself with a classic diner culture that everyone seems to enjoy so you can already expect that when you own a Waffle House, you won’t need to work so hard in getting the name out there since it’s already considered a timeless classic restaurant for everyone.
Waffle House is considered a cheaper alternative to its competitors. For IHOP for example, they sell a plate of their waffle at $11.29 while at Waffle House, you can get a waffle at $4.30. All the other items at Waffle House are also under $11. With this pricing, you can market the Waffle House in your area to be affordable compared to other big named breakfast chains.
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Open Twenty-Four Seven
At this time and era, people just don’t go to bed by 9 pm. There are people still up and about past bedtime and some of them could be looking for a place to eat.
Waffle House has always been known to open twenty-four hours a day and seven days a week. Your Waffle House restaurant might just be everyone’s go-to place after a night out with friends and that’s drawing in the crowd even after midnight which also means more sales.
Challenges of a Waffle House Franchise
We want to be frank with you and let you know that every business will have its ups and downs. Owning a franchise will also bring you challenges. Here’s what you can expect.
As mentioned above, the overall cost of franchising a Waffle House is $600,000 – $1,000,000. Do note that the numbers provided are just an estimate. But think of how expensive it is to operate a Waffle House and whether or not it fits in your budget. Spoiler alert: Most franchise opportunities fall into this general investment range.
Many will say that the food at Waffle House tastes great. There’s no problem there. But the menu selections are limited to some. There aren’t a lot of options. For instance, there aren’t any pancakes or French toast considering they’re a breakfast place.
Waffle House chooses the best locations so you’d need to have a prime spot to build your store. But a prime spot also means an expensive lot to rent or buy and that could add up to higher expenses.
Is the Waffle House Franchise Right For You?
There’s not much data to show how profitable a Waffle House is but with the company having annual revenues of a billion dollars that should be a good sign that it’s worth it. However, you should also take into consideration the cost of franchising this breakfast chain should you get chosen to operate a branch.
The other thing to consider is the challenge of operating a restaurant that operates around the clock. If an oven breaks at 2 A.M., you could be getting a phone call from the night manager. Many breakfast places only operate between 6 a.m. and 2 p.m. so you get a break.
Additionally, you’ve got to think the broad scope of operational challenges of running a 24/7 business like this. For example, staffing has become a challenge for businesses in the service industry that only operate during the day. As a restaurant that remains open around the clock means you’ll need wait staff, kitchen staff, and management around the clock. This means more time and effort must be spent on hiring, firing, and scheduling. You’ll also have to face staffing problems such as the most recent one that involves a petition to increase employees’ wages.
Finally, decide if you want to serve this clientele. As you know, the Waffle House appeals to a wide-range of diners rich and poor. Unlike other quick-serve concepts that do more drive-thru business, the Waffle House concept is all about dine-in service. As we’ve seen in the last year, having a drive-thru focused business can help you generate more sales faster.
What is an alternative breakfast restaurant franchise?
One other option to consider franchising is IHOP. This restaurant serves a variety of breakfast food and is also open twenty-four seven. The initial investment fee for an IHOP starts at $50,000.
Another option is to franchise Denny’s. This restaurant chain is also quite popular with over 1,650 locations. The franchise fee for Denny’s is $30,000 for one branch.
Another related option is Steak’n Shake with more than 500 locations there’s plenty of room for growth with this concept. The company is also looking for “franchise partners” to help expand the footprint of this franchise by another 400 stores. You can become a franchise partner for an investment of only $10,000 and get 50% of store profits, but you don’t actually have full ownership of the business. You will need to continue operating this business yourself.
With this guide and all these other options, you’ll be able to choose the best breakfast franchise for you.