Chick-Fil-A Franchise Review

FORT WORTH, TX - AUGUST 01: Drive through customers wait in line at a Chick-fil-A restaurant on August 1, 2012 in Fort Worth, Texas. Chick-fil-A resturants across the country experienced heavier than normal traffic after Mike Huckabee, the former governor of Arkansas and a 2008 presidential candidate, encouraged a 'Chick-fil-A Appreciation Day' in support of the company's stance on gay marriage.
Tom Pennington/Stringer/Getty Images

In 1946, Truett Cathy opened his first restaurant in Hapeville, GA, a 24-hour diner that was so tiny he named it the Dwarf Grill (later The Dwarf House). In 1964, this privately owned franchise family offered the first boneless breast of chicken sandwich, named the Chick-Fil-A sandwich. Chick-Fil-A was also the first to sell chicken nuggets, in 1982. Now, with over 1700 restaurants in 38 states, Chick-Fil-A has grown to become one of the largest quick-serve chicken restaurant chains in America, with $4.6 billion in system sales in 2013.

Also in 2013, Chick-Fil-A overtook KFC based on revenue numbers as the largest chicken concept in the U.S.

Chick-Fil-A is famous not only for its food - loyal customers will travel miles if necessary for their "fix" -  but also for its all-out marketing blitz strategy whenever a new location is opened: community events with free food, music, contests, and activities for kids. Chick-Fil-A president Dan Cathy landed in hot water in 2012 due to controversial comments on marriage definitions, but the franchise system has since made amends by ceasing large donations to controversial organizations and also by donating to progressive events, and continues to move forward with its principle of building community.

Publicity aside, Chick-Fil-A's numbers are decidedly impressive, topping the industry in 2012 with an average of $3.2 million in sales per store, better even than McDonald's - which has eight times the number of restaurants in the United States.

For future expansion, Chick-Fil-A is focusing on markets in Southern California and the Midwest in the U.S., and internationally in Canada, South Korea and the Phillippines.

Chick-Fil-A offers potential franchisees an exclusive right to become a part of its team. Once selected, franchisees enjoy a corporate staff of professionals that support them on every level.

Chick-Fil-A, Inc. will handle all advertising, selection of business location, training, marketing, and more. In fact, Chick-Fil-A, handles so much of their franchisees’ business, that franchisees may eventually feel a little cooped up by the amount of control Chick-Fil-A exerts.

How Much Does a Chick-Fil-A Franchise Cost?

Got $10,000 laying around? Then you can forget the burgers and throw your money down on a license to operate a Chick-Fil-A. There's also no threshold for net worth or liquid assets. But get in line - and be prepared to toe the line. Chick-Fil-A gives only about 70-80 of the 20,000 applicants per year the right to operate a franchise, and along with this right come very strict stipulations:

  • Your store will be closed on Sunday to give employees a day off to rest or worship.
  • You will not be allowed to select your location, nor to open multiple locations.
  • You will not own the property upon which the store sits, nor can you sell it or pass it on to your heirs - so if you want a business you can sell someday, Chick-Fil-A is not for you.
  • You will not own or receive any equity in your business.
  • The franchisor will provide all equipment, renting everything to you for 15% of your unit's sales.
  • You will also have to surrender a whopping 50% of your monthly net profits (pretax profits) to the franchisor. In comparison, other franchise brands charge 5-10% of gross sales.

Franchise investment information is conspicuously missing from the company’s website as well as the internet, but good credit with a proven business track record will get you considered for a franchise. Founder Cathy Truett describes typical Chick-Fil-A operators as responsible "family men" with track records of solid decision-making, and says "We're seeking people with character rather than experience."

Should your initial application pass muster, Chick-Fil-A will proceed to interview you and your business partners - as well as your family members and friends.

What We Like

We like tasty chicken, and we like Chick-Fil-A's dedication to community presence. We like the low franchise fee of $10,000, and we even love the psychology of the charming “cow as spokes-animal” advertising. It would be nice, however, if Mr. Cathy could give up a little more control to his franchise partners, but maybe the strong control by the franchisor is why the chicken and profits are so darned good. Even with all the stipulations, this proven winner has staying power, and its continued popularity has demonstrated this mega-brand’s stability.

Pros

  • Low Franchise Fee - We hate to keep clucking, but shucks, only $10,000?

Cons

  • Ownership - If you're not a control freak you might survive the arrangement, but 50% of the net sounds like fowl play.

Chick-Fil-A Franchise Information

Ranking: 24th on Franchise Times Top 200 in 2013
Business Established: 1964
Franchising Since: 1967
Number of Locations: 1700+ in the U.S.
Franchise Fee: $10,000
Initial Investment: A closely guarded secret - you'll have to send in an application to find out.

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