fbpx

Buying a Chick-fil-A Franchise

Top 20 Most Popular Franchises: Chick-fil-A

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 knows the key facts and data that signal a successful franchise system. Upon extensive review using a number of internet research tools, our team was able to compile a short list 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, as well as the requirements that encompass its franchise application process.

About Chick-fil-A

Chick-fil-A opened its first store in Atlanta, Georgia in 1967, after its founder, Truett Cathy 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 and 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 and is now focusing on expanding internationally across the United Kingdom and in Canada, in addition to its new developments in the US. Chick-fil-A’s headquarters is, to this day, still located in Atlanta, Georgia and is now run by its CEO: Dan Cathy – son of its founder Truett Cathy.

How much does a Chick-fil-A franchise cost?

Chick-fil-A’s franchise model deviates from most others in the sense that it is financially responsible for all startup costs including real estate, restaurant construction and store equipment which in turn is leased to its franchisees 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% and candidates have to undergo an extensive application profile that 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, 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 successfully complete an extensive, multi-week training program prior to taking over operations of a Chick-fil-A franchise.

Chick-fil-A in Numbers

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 and 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 becomes especially surprising given that all of its stores are closed on Sundays and the fact that 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, although limited data was made available on the financial status of the company’s franchisees, it was found that only 14 franchises ceased operations in 2019 – 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 a number of states in the United States.

Summary

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 and a number of markets continue to be available as Chick-fil-A stores haven’t saturated their presence across the country yet. If you are an individual with previous extensive business management experience and are interested in dedicating yourself solely to one new business venture, Chick-fil-A is the right franchise for you!