Chick-Fil-A has consistently topped the list of one of the most successful restaurants in the US, with more than $11 billion in sales.
The fact that Chick-Fil-A has 2,793 outlets located in 47 states triggers questions such as, is Chick-Fil-A a franchise? I looked into the matter, and here’s what I discovered!
Is Chick-Fil-A A Franchise In [currentyear]?
Chick-Fil-A runs on the franchise business model, allowing the parent company to license restaurants to operators as of [currentyear]. In this model, the parent company selects a location and pays for all start-up expenses except for the franchise fee (paid by the franchisor). An operator is selected upon successful applications and interviews.
If you want to find more information on Chick-Fil-A’s franchises, the expenses of opening one, the experiences of opening one, and much more, keep reading!
How Much Does It Cost To Open A Chick-Fil-A Franchise?
The cost of opening a Chick-Fil-A franchise ranges from $342,990 to $1,982,225 plus an additional franchise fee of $10,000.
Further, the breakdown of the initial cost of opening a Chick-Fil-A franchise is as follows:
- Franchise fee: $10,000
- Additional funds: approximately $2,225, 083
- First-month insurance expense: $11, 165
- Opening inventory: $94,560
- Renting of equipment for the first month: $5,000
- Lease or sub-lease of premises for the first month: $85,800
However, as per the company’s policies, the parent company is responsible for covering the opening expenses, while the franchisee is only expected to pay the $10,000 franchise fees.
Furthermore, Chick-Fil-A does not require the franchisees to showcase the minimum net worth or liquid assets.
As a result of the reduced expenses, Chick-Fil-A has become one of the least expensive major fast-food chains since the company covers almost all the start-up costs.
Consequently, the parent company considers the franchisees not as the franchise owners but as the operators.
How Do You Open A Chick-Fil-A Franchise?
If you are interested in opening a Chick-Fil-A restaurant, here are the steps to owning one:
1. Submit An Online Application
The first step to owning a Chick-Fil-A franchise is submitting an online application through the company’s franchise page.
Usually, the links direct you to registration pages where you create your profile and submit it to the company.
Additionally, it is important to note that one cannot simultaneously apply for opportunities in the US, Puerto Rico, and Canada.
As you submit your application, you must know that Chick-Fil-A requires full-time availability since the parent company expects operators to be actively involved in daily operations.
Furthermore, you have to demonstrate previous experience in leadership and management adequately.
2. Pass The Interview
If your application meets the selection criteria and you are selected, the company will reach out to you and schedule an interview.
Due to the low franchisee acceptance rate, it is usually critical that you prepare adequately for the interview.
Also, it is always important to remember that Chick-Fil-A seeks a candidate with an entrepreneurial spirit since the company covers most of the start-up costs.
Therefore, you need to demonstrate commitment to customer service, business savvy, and outstanding leadership.
Moreover, the hiring team may reach out to your family, friends, and past employer to verify your credentials and character.
3. Review Of The Franchise Agreement
If you pass the interview, the franchisor will share a franchise agreement and the Franchise Disclosure Document (FDD).
That said, the agreement will communicate the responsibilities of the franchisee and the franchisor, as well as the ongoing costs on the side of the franchisor.
So, always ensure that you review it closely to understand the document’s implications.
4. Multi-Week Training Program
As part of the process, Chick-Fil-A operators must attend and complete a multi-week training program that will teach them all elements of starting and running the business.
5. Grand Opening Of The Franchise
The last step of opening the franchise is preparing for a smooth and successful grand opening. So, ensure that you prepare yourself and your staff for the big day!
What Are Chick-Fil-A’s Expectations Of Opening A Franchise?
Since the success of Chick-Fil-A is correlated to the drive and passion of individual businesses, the parent company outlays some expectations for franchises and franchise owners.
With that, below is Chick-Fil-A’s Franchise check-list:
As part of the cost of setting up the franchise, Chick-Fil-A expects an initial commitment fee of $10,000 (or CAD 15,000).
Also, Chick-Fil-A expects a holistic commitment to owning and operating the business to boost company sales.
Commitment To Service
Since the business is part of the quick-service restaurant industry, the franchisee must demonstrate a commitment to serving customers.
Therefore, the parent company expects franchisees to exhibit a passion for serving great food and offering exceptional hospitality within a fast-paced environment.
Complexity And Risk
Since the franchisees are in charge of all aspects of the business, they must anticipate complexity and risk.
That said, the franchisee needs to understand that the business’s success and return on investment are dependent on their hard work, leadership effectiveness, and business acumen.
Moreover, even with such elements put into play, the business’s success might not be guaranteed.
Highly Selective Process
The process of selecting a Chick-Fil-A franchisee is always highly selective.
With that, Chick-Fil-A ensures that it tales all candidates through an intensive and lengthy selection process to filter out the best.
Therefore, the candidates must provide evidence of personal financial integrity and stewardship, entrepreneurial spirit, strong character, growth mindset, and proven business leadership.
What Is It Like To Operate A Chick-Fil-A Franchise?
Once a franchisee opens a Chick-Fil-A franchise, the parent company charges 15% royalty and 50% pretax of the profits remaining.
Furthermore, Chick-Fil-A prohibits most franchisees from opening up multiple units, which limits the franchisees’ potential profits.
According to the parent company, the limitation to opening up multiple units enables franchisees to get involved in the restaurant’s daily operations intimately.
Also, Chick-Fil-A covers all expenses involved in opening the restaurant, and the franchisor owns the real estate, equipment, building, and virtually everything else within the store.
On the other hand, the franchisee is simply operating the business and is expected to run the business in a hands-on manner.
How Much Does A Chick-Fil-A Franchise Owner Make?
A Chick-Fil-A franchisee makes approximately $4.2 million per store, which is above other direct competitors such as KFC ($1.2 million) or McDonald’s ($2.8 million).
However, after deducting the royalty fees and other operating fees, the figure left is much less than $4.2 million and approximately $200,000 a year.
In conclusion, Chick-Fil-A’s business model operates on a franchise model. Also, a franchisee is only required to pay $10,000 as the franchise fee, while the company covers other expenses.