Should I open or buy a BurgerFi franchise in 2027?

Two paths into the brand: greenfield build versus distressed resale

There are really only two ways to own a BurgerFi in 2027, and they are almost different businesses. The first is the greenfield path: sign a development agreement, find a site, build out 2,200–2,800 square feet of inline space, install the equipment package, hire and certify a team, and open cold into a trade area that may or may not know the brand. Your capital is at risk for 12 to 18 months before the unit finds its run rate, and every dollar of build-out is spent before a single dollar of revenue arrives. The 2026 Item 7 range for that path is roughly $704,750 to $1,171,500, and ground-up construction rather than inline conversion adds materially to the top of that band.

The second path is the resale — and specifically the distressed resale that exists because of what happened to this system. BurgerFi International filed Chapter 11 in September 2024, sold its assets to lender TREW Capital Management, and was subsequently acquired in December 2024 by the ownership group behind Savvy Sliders. That sequence closed corporate units and shook loose franchised locations. What it left behind is a secondary market: built-out restaurants with equipment already installed, hoods already vented, grease traps already in the ground, and in some cases a customer base still walking in. A buyer acquiring one of those units skips the single largest line in the Item 7 table — the build-out — and inherits an asset that has already absorbed its opening losses.

The asymmetry is the whole argument. On the greenfield path you pay full construction cost for an unproven trade area in a brand whose unit count is at its lowest level in years. On the resale path you pay a fraction of replacement cost for a location that already has a sales history you can underwrite. A greenfield operator has to believe the brand's turnaround thesis before committing capital. A resale buyer only has to believe that a specific address, at a specific price, with a specific trailing P&L, produces an acceptable return — a much smaller and much more testable belief.

There is a third variant worth naming, because the new ownership group has signaled it: co-branded units combining BurgerFi with the other concepts in the parent portfolio. Sharing rent, a hood system, and a labor pool across two brands under one roof spreads fixed cost across more revenue, which is exactly the lever a sub-$1.3M AUV brand needs. If that format is offered in your market and the economics are disclosed in the FDD, it deserves real analysis rather than a reflexive no — but insist on seeing actual co-branded unit performance data, not a pro forma.

The case against a new build, stated plainly

Run the arithmetic on the greenfield path before anything else. At the midpoint of Item 7 you are roughly $940,000 into a restaurant. Finance 75% of that through SBA 7(a) at ten-year amortization and you are carrying annual debt service in the high five figures to low six figures — call it $84,000 to $110,000 a year depending on rate and structure — before you take a dollar of owner compensation. Now put system AUV of $1.24M–$1.32M on top of it and apply restaurant-level EBITDA in the 8% to 14% range that this category realistically produces after third-party delivery fees are normalized. At 8% on $1.24M you generate about $99,000. That does not cover debt service in the worse rate scenarios. At 14% on $1.32M you generate about $185,000, which services the debt and leaves something — but 14% is top-quartile execution, not the base case.

That is the core problem with the new-build path: the median outcome does not clearly clear the median cost of capital. You are underwriting to the top half of the distribution to make the deal work at all. Every experienced multi-unit operator will tell you the same thing about that shape of deal — when the base case is breakeven, the downside case is a capital call, and there is no version of restaurant operating where the downside case does not eventually show up.

Layer on the brand-specific risk. Unit count is well off the 2021 peak. AUV has compressed roughly 12% from that peak. The system went through bankruptcy less than three years before your hypothetical opening. New ownership has real operating credentials, but a turnaround at this stage is a hypothesis being tested in public, and a greenfield franchisee is funding that test with a million dollars of their own and the bank's money. The turnaround may well work. You do not need to be the one paying full construction price to find out.

Category conditions do not help. Beef input costs have stayed elevated well above the pre-2022 baseline, which compresses gross margin across every better-burger concept simultaneously. Florida's minimum wage has stepped up under the state's scheduled increases, and Florida is BurgerFi's densest market. And the consumer is trading down — traffic has been shifting toward value-priced traditional QSR while premium better-burger tickets in the $14–$17 range face more resistance. Opening a premium-priced burger concept into a value-seeking consumer cycle, at full construction cost, in a brand recovering from Chapter 11, is three bets stacked on one balance sheet.

How to decide between them

The decision is a gate sequence, not a judgment call. Each gate is binary, and failing any one of them should stop the process rather than trigger a workaround. Work them in order, because the cheap gates eliminate most candidates before you spend money on the expensive ones.

The first gate is operator profile. Existing multi-unit food-service operators clear this brand's economics far more reliably than first-timers. They carry working capital reserves, they have a general manager bench they can move into a new store, they already have distributor relationships that price better than a single-unit buyer's, and they have lived through a bad quarter without panicking. A first-time single-unit operator taking on a $940,000 build in a post-bankruptcy brand is the profile that produced the closures in this system.

The second gate is capital adequacy. The brand's stated requirements are $300,000 liquidity and $750,000 net worth, and the number that actually matters is liquidity *after* closing, not before. Working capital burn during an 18-month ramp is what kills undercapitalized operators, and it kills them quietly — they hit month nine, sales are 80% of plan, and there is no reserve left to fund the marketing push or the management hire that would have fixed it.

The third gate is market fit. Brand awareness is concentrated in South Florida and the major coastal metros. Tourist corridors with high-spend visitor traffic support premium ticket pricing that weekday-lunch suburban strip centers do not. If your site is a second-tier northern metro with thin better-burger awareness and a lunch-driven daypart, you are asking the unit to build brand equity and hit an AUV target simultaneously.

The fourth gate is the delivery economics clause, and it is the one most buyers skip. Franchisee complaints under prior ownership centered on a third-party delivery arrangement layered on top of the royalty — reported in the trade press as including a required DoorDash quarterly minimum and an additional percentage on Uber Eats sales, debited automatically. Stack a marketplace commission that can run near a third of ticket on top of a 5.5% royalty, a 1% brand fund, and local marketing, and delivery volume becomes revenue that generates almost no contribution margin. It is not that delivery orders lose money outright at those rates — it is that after the aggregator's cut and the fee stack, what remains has to cover food cost, labor, and occupancy from a much thinner base than a dine-in ticket does. A store that "grew" on delivery can post rising sales and falling cash flow at the same time.

Note the shape of that tree: three of the five gates route to "do not proceed," and the only unambiguously favorable terminal node is the resale path. That is not pessimism, it is what the cost structure implies. Run your own candidate through it honestly and the answer usually arrives before you have spent anything but time.

The numbers behind each option

Start with the greenfield stack. The initial franchise fee sits at $35,000 for a single unit, with a lower per-unit fee in multi-unit packages. Build-out and leasehold improvements are the dominant line, running from the high $300,000s to the mid $600,000s for inline space, with ground-up construction adding roughly $150,000 on top. The equipment and smallwares package lands in the $135,000–$185,000 range. Signage and technology — point of sale, kitchen display — add $42,000 to $68,000. Training and opening team costs run $22,000 to $38,000 for the certification program. Item 7 specifies working capital of $75,000 to $125,000 covering roughly three months, plus miscellaneous and a required grand-opening marketing spend. Add it up and the total range is $704,750 to $1,171,500.

Ongoing fees are 5.5% of net sales in royalty paid weekly, 1.0% to the national brand fund, and up to 2.0% in required local marketing. At the system AUV midpoint of about $1.28M, that is roughly $70,000 in royalty, $13,000 to the brand fund, and up to $26,000 in local advertising — call it $109,000 a year in franchise-related fees before rent, food, or labor. On the Item 19 disclosure side, 76 franchised units reporting produced average unit volumes in the $1,241,000 to $1,319,000 band, with top-quartile units in high-traffic Florida and Northeast locations running considerably higher. Median Year-1 cash flow before debt service falls in the $95,000 to $186,000 range — a spread wide enough that the median tells you very little about your specific unit.

Now the resale stack. The distressed corporate-converted units that came out of the 2024–2025 restructuring have traded at a small fraction of replacement cost — figures in the low-to-mid hundreds of thousands for restaurants that cost well north of $900,000 to build. That gap is the entire investment case. Even accounting for deferred maintenance, an equipment refresh, a transfer fee, and remodel obligations the franchisor may impose on transfer, you are entering at a cost basis that lets a $1.1M-AUV store produce a genuinely good return where the same store would be underwater at new-build cost. Payback on a profitable resale can run 12 to 18 months versus 24 to 36 months on a new build, and that difference compounds: the resale buyer is redeploying capital into a second unit while the greenfield operator is still paying off the first.

The resale carries its own diligence load. You are buying a trailing P&L, and you must verify it rather than accept it. Pull three years of bank statements against the point-of-sale records, not just the seller's summary. Reconcile reported sales to sales-tax filings and to royalty payments remitted to the franchisor — royalty history is the hardest number in a restaurant deal to fake, because someone else received it. Separate dine-in from third-party delivery revenue and re-underwrite the delivery portion at its real contribution margin, because a store carried by delivery volume is worth far less than one with the same top line from in-store traffic. Get the remaining lease term, the option structure, and the landlord's consent requirements in front of your attorney early; a great unit price on a lease with three years left and no options is not a great deal. And ask the franchisor directly, in writing, what remodel or equipment obligations attach on transfer — inheriting a $150,000 required refresh changes your entry price materially.

One structural constraint applies to new development and cuts against small buyers: the brand has required committed multi-unit development from new franchisees in new markets, typically on a three-unit schedule. If you want one restaurant and one only, that appetite may be satisfiable through a resale of an existing unit but not through a new development agreement. Confirm the current policy in the FDD rather than relying on any recruiter's characterization of it.

Alternatives worth pricing before you commit

Underwriting BurgerFi in isolation is a mistake. The right question is not "does this pencil?" but "does this pencil better than the other places I could put $700,000 in a restaurant?" Several better-burger and adjacent fast-casual brands sit in overlapping investment bands with materially different risk profiles, and pulling their FDDs costs nothing but time.

Smashburger operates a comparable fast-casual better-burger model under Jollibee ownership, and while it went through its own significant unit rationalization, it emerged with a more stable base. MOOYAH Burgers, Fries & Shakes offers a lighter-footprint build in the same category at a lower capital entry. Wayback Burgers sits at the low-capex end of the category and actively recruits multi-unit operators. Freddy's Frozen Custard & Steakburgers sits a tier up in required investment but with a substantially larger and more established system. Shake Shack does not franchise domestically in the conventional sense — it licenses for non-traditional venues — so it is not an available comparison for most buyers. Five Guys imposes multi-unit development commitments and net worth requirements that put it out of reach for most single-market entrants.

Pull Item 7 and Item 19 for two or three of these alongside BurgerFi's and build one spreadsheet with identical columns: total investment midpoint, royalty plus brand fund plus required local ad, disclosed AUV, implied fee load in dollars, and unit count trajectory over three years from Item 20. Do not accept a brand's marketing summary of its own numbers. The Item 20 unit table — openings, closures, terminations, transfers, non-renewals — is the single most honest page in any FDD, because it records what franchisees actually did rather than what the brand hopes they will do. A system with heavy transfer and termination activity is telling you something that no Item 19 average can hide. Run BurgerFi's Item 20 next to its peers' and let that comparison, not the recruiter's pitch, set your ranking.

If you are coming at this from an operating-systems background rather than a restaurant one — the analytical habits of RevOps translate directly here — treat the FDD as a data source and build the model before you take a single call with a franchise development rep. Franchise sales is a funnel with conversion targets, and you will be worked through it competently. The defense is arriving with your own numbers already built.

Implementation sequence if you proceed

Assume you clear the gates and want to move. Run a disciplined 90-day process; the discipline is what protects you from the timeline pressure a franchise development team will apply.

Days 1 through 7: obtain the current FDD directly from the franchisor rather than a third-party aggregator, and read Items 5, 6, 7, 19, 20, and 21 word for word. Item 20 gives you the unit-count history and, in its exhibits, the contact information for current and former franchisees. Item 21 gives you the audited financials of the franchisor itself — read them, because a franchisor with a weak balance sheet cannot fund the brand support you are paying 1% for.

Days 8 through 25: build a call list of eight to twelve existing operators from the Item 20 exhibit and work it yourself. Include the former franchisees; the ones who left tell you more in ten minutes than the current ones tell you in an hour. Do not rely solely on any validation list the brand provides — those contacts are pre-selected. Ask every operator the identical six questions: actual first-year sales, actual second-year sales, restaurant-level EBITDA percentage, total cash invested versus the Item 7 estimate, their real experience with third-party delivery economics, and whether they would sign again knowing what they now know. That last question is the whole exercise. A high rate of "no" among people who have already sunk their money in is a stop signal, not a negotiating point.

Days 26 through 40: engage a franchise attorney who does restaurant deals specifically. Several established firms specialize in franchise-side representation, and your attorney should be one of them rather than your general business counsel. Budget a meaningful five-figure sum for full FDD review and agreement negotiation — it is the cheapest insurance in the transaction. Direct them specifically at the third-party delivery provisions, the transfer fee schedule, territorial protection radius, and the renewal fee structure.

Days 41 through 60: site work and financing in parallel. Commission a professional trade-area study rather than eyeballing a location; the brand's target profile skews toward higher median household income and substantial daytime population within a roughly three-mile radius. Simultaneously, approach lenders active in restaurant SBA 7(a) lending and get a soft commitment on structure — loan-to-value, amortization term, and rate spread — before you sign anything. A lender's underwriting is a free second opinion on your deal, and a lender who will not finance it is telling you something.

Days 61 through 75: scan the resale market comprehensively across the major business-for-sale marketplaces and restaurant-specific brokers, and ask the franchisor directly for its list of units currently for sale. Compare every available resale against your greenfield pro forma on a cost-per-dollar-of-AUV basis. In most markets the resale wins that comparison decisively.

Days 76 through 90: negotiate and decide. Define your walk-away conditions in writing before the conversation starts — a cap on third-party delivery fee pass-throughs, a disclosed transfer fee schedule, meaningful territorial protection, and a renewal fee cap — and hold them. If the brand will not move on the delivery economics, that is your answer, because that is the exact issue that generated franchisee conflict under prior ownership. And do not sign under time pressure. "Territory pricing expires this quarter" is a closing technique, not a market condition.

Two operating notes for the period after close. First, plan to run the restaurant yourself for at least the first six months. The menu is operationally complex by better-burger standards, and the certification program is not a substitute for an owner in the building during the ramp. Absentee ownership in the first year is one of the more reliable predictors of underperformance in this system. Second, treat the beer and wine program as a real profit center where local licensing permits it. The attach rate on alcohol in this concept is a genuine differentiator against pure-QSR burger competitors, and the margin on it is better than anything on the food menu. If your site cannot get a license, adjust your AUV expectations downward accordingly.

Related questions

Is a BurgerFi resale actually safer than a new build?

Financially, yes — you enter at a fraction of replacement cost, inherit installed equipment, and underwrite a real sales history instead of a projection. The risk shifts from construction and ramp risk to diligence risk: you must verify the trailing P&L against bank records, sales tax filings, and royalty remittances.

How much liquid capital do I really need?

The stated requirement is $300,000 liquid against $750,000 net worth, but the operative number is liquidity remaining after closing. Budget for a full 18-month ramp with sales at 80% of plan and still being able to fund marketing and management. Undercapitalization during ramp is the most common failure mode.

Does the 2024 bankruptcy disqualify the brand?

Not automatically. Chapter 11 cleared debt and closed underperforming units, and the current ownership group brings multi-concept operating experience. But it does mean the turnaround is unproven, which argues for entering at distressed pricing rather than paying full new-build cost to fund someone else's test.

What single term should I refuse to sign without?

A written cap on third-party delivery fee pass-throughs. Franchisee conflict under prior ownership centered on delivery arrangements layered atop the royalty, and the current agreement may still preserve that right. Get the cap in the agreement itself, not in an email from a development rep.

Can I buy just one unit?

Possibly through a resale of an existing restaurant, but new development in new markets has required a committed multi-unit schedule. Confirm the current requirement directly in the FDD rather than relying on a recruiter's summary, since development policy changes between filings.

FAQ

What does a new BurgerFi franchise cost all-in?

The 2026 Item 7 disclosure puts total initial investment at roughly $704,750 to $1,171,500. Build-out and leasehold improvements dominate that range, with the equipment package, technology, signage, training, working capital, and a required grand-opening spend making up the remainder. Ground-up construction rather than inline conversion pushes you toward the top of the band. Actual costs vary substantially by market — construction pricing, permitting timelines, and landlord contribution all move the number.

What are the ongoing fees?

A 5.5% royalty on net sales remitted weekly, a 1.0% national brand fund contribution, and up to 2.0% in required local marketing spend. At system-average volume that combined load is roughly $105,000 to $110,000 annually before rent, food cost, or labor. Third-party delivery commissions sit on top of that and are the reason the fee stack has been a point of friction between franchisees and the franchisor.

What do units actually generate?

Item 19 shows system average unit volume in the $1,241,000 to $1,319,000 range across 76 reporting franchised units, down from a peak near $1.45M in 2021. Top-quartile units in high-traffic Florida and Northeast locations run substantially higher. Restaurant-level EBITDA in the 8% to 14% band, and median first-year cash flow before debt service of $95,000 to $186,000, are the operating figures to model against.

How long until I break even?

Roughly 24 to 36 months on a new build under a typical 75% SBA-financed structure, and 12 to 18 months on the resale of an already-profitable unit. That gap is the strongest single argument for the resale path — the resale buyer recycles capital into a second location while the greenfield operator is still retiring debt on the first.

What killed franchisee margins under prior ownership?

The combination of third-party delivery economics and the franchise fee stack. Marketplace commissions that can approach a third of ticket, sitting on top of a 5.5% royalty plus brand fund plus local marketing, leave delivery orders with very thin contribution margin — enough that a store growing on delivery volume can show rising sales and falling cash flow simultaneously. Trade coverage in late 2024 reported the terms were under renegotiation, but verify the current agreement language yourself.

Should I compare BurgerFi against other burger franchises before deciding?

Yes, and it should be the first thing you do. Pull Item 7, Item 19, and especially the Item 20 unit-count tables for two or three comparable brands and build one spreadsheet with identical columns. Item 20 records openings, closures, terminations, and transfers — what franchisees actually did — which no average sales figure can obscure. Let that comparison set your ranking before you take a development call.

Sources

• https://www.qsrmagazine.com/
• https://www.restaurantbusinessonline.com/
• https://www.nrn.com/
• https://www.restaurantdive.com/
• https://www.sba.gov/funding-programs/loans/7a-loans
• https://www.ftc.gov/business-guidance/resources/franchise-rule-compliance-guide
• https://www.franchise.org/
• https://www.bls.gov/cew/
• https://www.ibisworld.com/united-states/industry/fast-food-restaurants/1980/
• https://www.bizbuysell.com/

Related on PULSE

• Should I open or buy an Oxi Fresh Carpet Cleaning franchise in 2027?
• Should I open or buy an Oil Can Henry's franchise in 2027?
• Should I open or buy a KidStrong franchise in 2027?
• Should I open or buy a Premier Garage franchise in 2027?
• Should I open or buy a Jazzercise franchise in 2027?
• Should I open or buy a Nekter Juice Bar franchise in 2027?