Culver's Franchise Owners Have To Follow This Strict Rule

Regional fast food restaurants don't take up the same space in America's physical or cultural landscape as major players like McDonald's, Chick-fil-A, or Taco Bell. At the same time, they can be very successful. Culver's is known throughout the Midwest for its unique ButterBurgers and made-fresh-daily frozen custard, and it has cultivated a reputation for quality and freshness since its founding in 1984 in Sauk City, Wisconsin. It has expanded into other regions since the first franchise opened in 1990, growing to more than 1,000 locations across 26 states. Since Culver's operates under a franchise model rather than as a traditional chain, people purchase their locations as owner-operators. However, there are still rules they must follow, including being involved full time at their restaurants.

Culver's views franchisees actively running their locations on-site, rather than serving as absentee owners, as vital. "That is the absolute secret to our success. The requirement is that every restaurant has a present and engaged owner-operator and there is absolutely no compromise on that," CEO Julie Fussner said on the Restaurant Business podcast "A Deeper Dive." To help maintain that focus, franchisees are allowed to own no more than four locations.

Among the other requirements owner-operators face are the fees they must pay. There's an initial franchise fee of $65,000 for a 15-year agreement, along with an ongoing 4% royalty on gross sales (per Culver's). They must also pay 2.5% toward company-wide advertising and spend at least 1% of annual sales on local advertising and promotion. The initial agreement can be renewed for another 10 years for $40,000.

Being able to afford the initial fee is just one requirement for prospective owner-operators. Financially, they must also have at least $500,000 in cash or other liquid assets, which increases to $750,000 if they want to own the real estate, as most franchisees do, along with the restaurant building and equipment. They also must go through what's called Discovery Week, during which they work for five full days at the original Culver's, learning how the restaurants operate, how the food is made, and preparing it themselves. By experiencing the day-to-day reality of the business, prospective buyers can determine whether they truly want to become owners, while the company can evaluate their performance as part of the application process.

Something that isn't necessary is industry experience, since everyone who buys a Culver's goes through the Franchisee Development Program. This owner-operator training program includes both classroom instruction and hands-on restaurant experience in Wisconsin, with some of it taking place at ButterBurger University. Culver's also has a mentoring program for general managers who want to become owners, which more than 200 of its franchisees have successfully completed.

The way Culver's runs its franchise system seems to be working. It opened an average of 51 new locations each year from 2019 to 2025 and plans another 59 for 2026 (via QSR), making it one of several fast-growing restaurant chains with ambitious expansion goals for the year. The company also reported average 2025 sales of more than $4.14 million per location (per Franchise Inspectors).