Why do fast food companies usually franchise their restaurants instead of operating the locations themselves?

Question

Why do fast food companies usually franchise their restaurants instead of operating the locations themselves?

In: 101

Answer 1

It’s a lot less risky/financially intensive to franchise vs. having to spend all the costs of building, setting up, hiring, etc. to get a location off the ground. Those costs fall on the franchisee, who then kicks up franchise fees and percentage of sales to corporate.