White Castle is an American hamburger chain with 377 locations across 13 states, mostly in the Midwest and New York metropolitan area. The company was started on September 13, 1921, and is widely regarded as the world’s first fast-food hamburger restaurant. The company is famous for their little square burgers called “Sliders.”
Can You Finally Buy A White Castle Franchise? Opening a franchise of this nostalgic restaurant chain seems to be a wonderful idea, but hold your horses! Unfortunately, the corporation prefers not to sell its franchises and chose to maintain its fast-food empire as a private operation. Take our 7-minute franchise quiz to find an opportunity that fits your budget and goals.
It’s not that the company wants to keep its restaurants out of reach of would-be entrepreneurs. Instead, White Castle’s primary desire to provide extra-high-quality foods and a locally tailored menu to its consumers necessitates that the restaurants be placed close to the sources of the raw materials they use in production.
But hey, I do have good news! Although White Castle does not offer a franchise program right now, there’s still another possibility for you to do business with them. Wanna find out how? Continue reading to learn more information and facts to discover how you can partner with the company.
- Financial Requirements and Fees
- Average Sales / Revenue Per Year
- White Castle Franchise Facts
- How Much Profit Does A Franchisee Of White Castle Make Per Year?
- Advantages of Franchising White Castle
- Challenges of Franchising White Castle
- Is The White Castle Franchise Right For You?
Financial Requirements and Fees
As previously stated, White Castle does not offer franchise opportunities in 2022. As a result, there’s no financial information available to potential franchisees. However, there is still a way to do business with them. The company includes a real estate acquisition process on their website, and according to it, they may still work with you if you have the land to offer.
In the real estate acquisition process, White Castle explains they are searching for land areas ranging from 20,000 to 40,000 square feet in select markets. A population of at least 35,000 people in a 2.5-mile radius with an average income of $55,000 is required. Another option suggested in the online leaflet is that convenience store owners who want to use their extra space could rent a leased White Castle, which would not operate as a franchise.
So while White Castle doesn’t franchise, if you have a property that meets the burger joints criteria, they might be willing to do business with you. You can discover more about this criteria by visiting their website.
Average Sales / Revenue Per Year
White Castle does not share official data on their system-wide annual sales, or average annual sales per unit, but we learned from one Forbes article that White Castle netted an estimated $12 million from a revenue of $612 million in 2013. Sales volume has have flatlined over the 8 previous years of 2013, according to the article.
A more recent financial analysis that was only updated last June 2021 shows that White Castle had revenue of $738.3M. Though, it is vital to remember that revenue isn’t the same as profit. Revenue is the income of your business before expenses, and as you know, the operation of a restaurant has many fixed expenses like labor, food costs, taxes, and a lease.
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The good thing is that White Castle is holding its own despite its modest size. The companies revenue increased by 1.6 percent in 2018. The majority of the company’s revenue growth comes from the products it sells in supermarkets where sales increased by 23% in 2019. You can find White Castle trademark sliders in the freezer isle of your supermarket.
Yes, you heard it right. White Castle doesn’t only earn from their restaurant chains, but they also get earnings from selling frozen hamburgers and other packaged frozen goods. One of its subsidiaries, White Castle Distributing, Inc., supplies frozen White Castle hamburgers to supermarkets around the country.
White Castle Franchise Facts
|Incorporated Name:||White Castle System, Inc.|
|Franchising Since:||Does Not Allow Franchising|
|Industry:||Fast Food Restaurant Chain|
|Subsector:||Grocery and Related Product Merchant Wholesalers|
Customers enjoyed White Castle burgers long before there was McDonald’s, Burger King, or Wendy’s. Its distinctive white castle buildings adorned towns early in 1921, when it was founded by Billy Ingram. To this day, after almost a hundred years, this family-owned restaurant is still going. As McDonald’s and other burger franchises dominate the American landscape, White Castle with approximately 375 locations in 14 states, remains a modest brand.
Given how famous the brand has become partly because of the film Harold & Kumar Go to White Castle, it is only inevitable that someone would want to start a White Castle franchise to capitalize on that status. Sad to say, you cannot. The issue with launching a White Castle franchise isn’t that it’s too pricey for most people. It is simply just because White Castle does not offer franchise agreements in the first place. That is a fact evidenced by their website, which lacks the customary franchise information page.
It would be a mistake, however, to conclude that White Castle has no interest in expansion simply because they’re not accepting franchises. Restaurant Business reported on March 16, 2021, that White Castle had plans to establish a new restaurant in Orlando, Florida. This is not an unusual occurrence, as White Castle established a restaurant in Scottsdale, Arizona in 2019 – the first White Castle in the western half of the United States.
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White Castle’s website offers a real estate acquisition process to help with future openings. They explain in it that they are searching for 20,000- to 40,000-square-foot sites in specific markets. A population of at least 35,000 people with an average income of $55,000 must exist within a 2.5-mile radius. Another option they included is for convenience store owners to rent a leased White Castle, which would not still function as a franchise.
In conclusion, White Castle doesn’t franchise, but if you have an available land to offer that fits their certain requirements, they may work with you. You can check their website to learn more.
How Much Profit Does A Franchisee Of White Castle Make Per Year?
There is no official statement about how much profit the White Castle franchisees make, but although I am unable to evaluate the average annual profit for a franchisee of the company, I have discovered that they had revenue of $738.3M in 2020. It’s difficult to determine the profit per store, because much of that revenue comes from grocery store sales.
Note that revenue isn’t the same as profit. Revenue is your business’ income before expenses are deducted, and there are many expenses that go into the operation of a restaurant. Among other things, these include food and labor costs.
Advantages of Franchising White Castle
Let’s face it, White Castle does not allow franchising. The closest that the company has ever gotten to a franchise arrangement is a limited license partnership under strict control. But what if, by some chance, you were granted permission to operate one in the future? What advantages can you expect from owning this restaurant burger chain? Let’s go through a few points below.
Top of Class Environmental Initiatives
If you’re an environmentalist and an entrepreneur, you’ll love White Castle. The company is mindful of their use of resources that they have formed a team dedicated to discovering new ways to reduce, reuse, and recycle. These efforts have paid off, as what they have claimed with over 300 tons of garbage diverted from the landfill each year. This is a company you can feel good about operating due to the their commitment to protecting the planet.
They Have That Oldest Burger Chain Nostalgia
In 1921, Edgar Waldo “Billy” Ingram, an insurance agent, and Walter Anderson, a restaurateur, decided to start a small business. They decided that hamburgers, a fancy new “sandwich”, would be the main feature. They started their business from that initial location in Wichita, Kansas, and expanded to El Dorado, Kansas, and then to Omaha, Nebraska, all on the quality of their hamburgers. Soon, they became the world’s first hamburger fast-food chain.
Despite the fact that it has already made a reputation for itself, the stoner flick Harold & Kumar Go To White Castle also made the burger chain extra famous in 2004. The company has a devoted following and its limited number of outlets add to the appeal.
Most people can conjure an episode in their lives involving White Castle. I know, it’s difficult to think about fast food history without thinking of McDonald’s, but America had a few chains before the Golden Arches became the dominant fast-food force they are today. One could make the argument McDonald’s was simply improving what White Castle had already done.
Loyal Customer Base
White Castle has a cult-like following of customers they call Cravers. Being America’s oldest burger chain, it is a no-brainer that they have loyal and engaged customers. Developing a solid customer base is critical for any restaurant. When you have a loyal and strong customer base, it means you have a good brand and you’re offering the right menu. A solid customer base equals a strong business, and isn’t that what every owner aspires to have?
If you are an entrepreneur who loves being socially responsible, White Castle might just be the ideal business for you. “Castle Shares” is one of the company’s social responsibility projects and the company has a long history of charitable giving. The founder was keen, according to White Castle that the company invest in the future of others and give back to the areas in which they operated.
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As a platform for funding important projects and programs, the firm established the Edgar W. Ingram Foundation, today known as the Ingram-White Castle Foundation. Because the creator valued education, he was particularly interested in providing opportunities to people who desired knowledge, independence, and self-sufficiency.
The foundation has mostly funded educational projects, programs that address vital human needs and activities that assist disadvantaged children in achieving academic success.
Challenges of Franchising White Castle
Along with the advantages of having a White Castle location, there are also some disadvantages and risks to consider. Here are some of the challenges you may face if you do get to operate one.
Does Not Allow Franchising
White Castle restaurants are not currently available for franchise ownership and the corporation has no plans to allow franchising for the brand in the future. Many investors and White Castle fans have often wondered why the company has not yet offered franchising options.
When asked why, the company just simply explained, “Being family-owned, our philosophy has been to not worry about being the biggest, but focus on being the best we can be.” Additionally, Lisa Ingram, President, CEO, and great-granddaughter of White Castle founder Billy Ingram, told CNBC in 2019 that the corporation was hesitant in losing control.
White Castle faces a wide range of competitors, especially since many other famous fast-food restaurants also have a burger-focused menu. When White Castle made its debut about a hundred years ago, hamburgers were still a novel concept.
Since then, there have been plenty of restaurants with similar niches that opened such as McDonald’s and Burger King. And although White Castle is the world’s oldest burger fast-food chain, when one thinks of burgers, it is likely that different brands that come to mind.
Despite being the world’s oldest burger fast-food company, White Castle has remained small in comparison to its competitors, which have grown rapidly and opened in some cases a few thousand locations. I acknowledge smaller chains may have more room for expansion opportunities, but they may be less well-known than larger chains.
Because the competition is more well-known, your business may require more branding and marketing to thrive and develop. You may need to devote more time and money to marketing your establishment, whilst bigger chains may gain a loyal following more quickly that are more recognizable in some parts of the country.
Is The White Castle Franchise Right For You?
If you can meet the particular criteria and have the needed resources that are required according to their real estate acquisition process and are a hundred percent willing to invest your money, time, and effort into owning this restaurant, then you could form a business relationship with this burger chain.
It is important, however, to assess whether it is the best business opportunity for you. Considering that the company remains incredibly selective about which markets it chooses to move into, you must first assess if you have what it takes to fit the company’s criteria. Also, before deciding, weigh the advantages and challenges because doing your homework could mean the difference between your investment’s success and failure.
What is an alternative franchise?
Since you can’t open a White Castle franchise, you can try Burger King or Carl’s Jr. Both restaurant chains also serve burger-focused menus such as White Castle. The franchise cost for Burger King is $50,000, whereas the fee for Carl’s Jr. is $35,000.