The Chick-fil-A principal business is the development of a system of retail quick-service restaurants specializing in a boneless breast of chicken sandwich. Most of these restaurants are operated by franchised operators who are independent contractors.
It is a Georgia corporation formed on March 23, 1964 and uses the trade name Chick-fil-A. S. Truett Cathy, the Founder, opened his first restaurant, the Dwarf Grill, in Hapeville, Georgia, in April 1946. Dan Cathy now is the Chief Executive Officer since November 2013 and was the Assistant Secretary since June 2001.
This article provides insight about Chick-fil-A’s franchised units. There are currently 2,493 domestic Chick-fil-A restaurants, of these 2,085 are franchised operated. While the remainder is 382 licensed units and 26 operated by the company.
Chick-Fil-A Franchise Fee is $10,000
Chick-fil-A charges \$10,000 for the initial fee and \$5,000 for any additional franchise unit. Of the initial fee of \$10,000, \$5,000 is considered working capital and can be received back at the end of the term under the franchisor’s discretion.
The total investment necessary to begin operation of a franchised Chick-fil-A Restaurant business is from $582,360 to $2,025,400. However, the Chick-Fil-A franchisee is only responsible for $10,000. Chick-Fil-A corporate will invest up to $2 million or more to build the restaurant!
|Initial Franchise Fee||$10,000|
|Opening The value of the total finished and unfinished goods and materials the business holds for future sale.||$17,830 – $57,860|
|First Month’s Rent of Equipment||$750 – $5,000|
|First Month’s Lease / Sublease of Premises||$1,900 – $67,200|
|First Month’s Insurance Expense||$255 – $8,950|
|Additional Funds||$552,125 – $1,876,390|
Disclaimer: These costs, besides the initial franchise fee, are paid by being deducted from Gross receipts after restaurant opens. The costs have variability depending on location and existing status of retail space. Chick-fil-A’s estimate is based on its own experience in establishing similar operations.
Since the corporation pays for the land, construction and equipment of the restaurant, it rents or subleases the property to the franchisee for 15% The total amount in dollars made in the business before expenses are deducted. See also Gross Revenue. plus 50% of pretax profit remaining (Paid Monthly).
It leases all software which is $9,500 – $20,000 per year for high-speed internet access.
Chick-fil-A has not charged an advertising fee since 1989 but has the right to charge up to 3.25% or if agreed upon by certain local and regional areas an advertising fee may be enforced.
|Revenue and income|
|Income from restaurants|
|Base operating and business service fess||$1,687,768,627||$1,444,979,758||$1,235,210,544|
|Additional operating service fess||754,102,047||641,162,823||573,638,081|
|Other sales, including sales from company-operated restaurants||294,905,377||218,216,503||202,750,120|
|Total revenue and income||3,790,886,792||3,002,713,322||2,640,900,318|
|Costs and expenses|
|Cost of sales, including cost of sales from company-operated restaurants||201,865,424||148,677,870||165,897,271|
|Selling, general, and administrative expenses||2,251,276,652||1,916,816,654||1,623,797,051|
|A reduction in the value of an asset over time, due to wear and tear. and amortization||395,047,922||324,512,479||279,699,876|
|A payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at a particular rate. In Vetted Biz, it is typically the additional rate of a loan a business buyer would pay off…||48,152,030||12,391,737||3,823,627|
|Total costs and expenses||2,896,341,938||2,402,398,740||2,043,217,825|
|Total earnings received by a business based on the U.S. Income Tax Return. The financial numbers of these earnings depend on the type of business, but can include income, guaranteed payments, compensation, interest, depreciation, elective deferrals, and contributions.For further details on how to calculate earnings… before contributions, scholarships, and income taxes||894,544,854||600,314,582||597,682,643|
|Contributions and scholarships||38,509,243||41,452,615||55,120,520|
|Earnings before income taxes||856,035,611||558,861,967||542,561,973|
|Other comprehensive (loss) earnings, before tax|
|Postretirement medical plan||(20,956,170)||15,449,244||(7,287,440)|
|Foreign currency translation||(234,204)||350,474||(17,907)|
|Derivate financial instruments||(5,780,760)||(2,695,630)||–|
|Other comprehensive (loss) earnings, before income taxes||(29,891,480)||21,512,470||(22,729,308)|
|Other comprehensive (loss) earning, before income taxes||(22,928,480)||16,367,470||(17,274,308)|
Download our guide! See how Chick-Fil-A compares to its franchise peers and explore alternatives in healthy fast food.