Vetted Biz is the leading platform for accessible and analytical data on franchises and businesses available in the U.S. Our research team has reviewed over 1,500 franchises. And they know the key facts and data that signal a successful franchise system. Upon extensive review using several internet research tools, our team was able to compile a shortlist of the “Top 20 Most Popular Franchises in the United States.” In the article below, we review the business model proposed by one of these 20 franchises in the Food & Beverage industry: Chick-fil-A and the requirements that encompass its franchise application process.
Truett Cathy had finished perfecting his chicken sandwich recipe, initially devised in the kitchen of his first restaurant: Dwarf Grill. After 19 years of successfully running kiosks in mall food courts, Chick-fil-A opened its first stand-alone location in Atlanta, Georgia in 1986. There began implementing store traditions such as its famous “Sunday Closures” that remain a part of the concept’s business model to this day. Today, Chick-fil-A currently has more than 2,300 stores in the United States. Now is focusing on expanding internationally across the United Kingdom and Canada, in addition to its developments in the US. Chick-fil-A’s headquarters are still located in Atlanta, Georgia.
Chick-fil-A’s franchise model deviates from most others. Is financially responsible for all startup costs including real estate, restaurant construction, and store equipment. Moreover, Its franchisees rent it for an initial investment of $10,000; an ongoing royalty fee of 15%, and an additional fee of 50% of pretax profit remaining.
Despite the relatively simple initial financial requirements to own a Chick-fil-A franchise, however, the franchisor acceptance rate is as low as 0.4%. Also, candidates have to undergo an extensive application profile. This includes being one of the 80 initial applicants selected amongst the more than 20,000 inquiries.
Other requirements necessary to own a Chick-fil-A franchise include having at least 5 years of established work experience. Well as being authorized to work in the United States, and not ever having filed for bankruptcy or received protection from creditors.
Additionally, the applicant is required to be free of any other active business ventures and must complete an extensive, multi-week training program before taking over operations of a Chick-fil-A franchise.
When evaluating a Chick-fil-A’s franchise potential for growth; one does not need to go beyond Quick Service Restaurant numbers to better understand the prospect for success of the opportunity at hand. The fast-food industry generated $200 billion in revenues in 2015. The industry has since been expected to have an annual growth rate of 2.5% for the following subsequent years.
Amongst the top brands leading the QSR ranking, Chick-fil-A was ranked eighth by QSR in 2018 after having generated $9 billion in sales that year. This number surprising given that all of its stores are closed on Sundays. Also, it only operates 2,225 restaurants – less than one-sixth as many as the top three earning restaurants ranked on QSR. Looking at the franchise’s internal performance, we find that only 14 franchises ceased operations in 2019. This is an insignificant value when contrasted with the total amount of franchises under Chick-fil-A’s franchise system. Moving forward, Chick-fil-A is looking to establish new units across several states in the United States.
Investing in a Chick-fil-A franchise is an interesting opportunity. Especially for individuals looking to make their way into the QSR industry. The prospects for growth and success within the industry and the Chick-fil-A brand itself, are extensive. Several markets continue to be available, as Chick-fil-A stores haven’t saturated their presence across the country yet. If you have previous business management experience and are interested in dedicating yourself to one new business venture, Chick-fil-A is the right franchise for you!
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