Chicken Guy Franchise Is Poised For Rapid Growth (2023)
Written by: Tyler Morris
Chicken Guy is a fast-casual chicken-themed restaurant that opened its first location in 2018. Food Network Star Guy Fieri teamed up with food and beverage investor Robert Earl. Robert Earl is the Chairman of Chicken Guy, and is famous for being the CEO Earl Enterprises. Earl Enterprises subsidiary companies include Planet Hollywood, Buca di Beppo, Bertucci’s, EOS, Brio Italian Grille, Bravo Italian Kitchen, TooJay’s, Seaside on the Pier, Café Hollywood, and Tequila Taqueria.
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Guy Fieri also promoted the Guy Chicken Franchise by hosting Guy’s Chance of a Lifetime, a reality TV Show where the winner won their own Guy Fieri Chicken Franchise.
Who won the Chicken Guy Franchise? Steel Cooper a U.S. army Veteran won and is opening his location in Philadelphia.
Chicken Guy offers a variety of chicken dishes ranging from sandwiches to salads. All ingredients are natural and Chicken Guy offers a wide variety of over 20 different sauces! There are currently 7 Chicken Guys, but there can never be too many.
How is Chicken Guy Positioned in the Food and Beverage Industry?
The food and beverage industry has annual sales of $1.4 Trillion and makes up about 10% of employment in the U.S. Additionally, food and beverage makeup 36% of all franchises in the U.S. When franchising in the food and beverage industry, you can expect to pay anywhere from $3,000 for a small franchise to $6,732,615 for full-service restaurants.
While Chicken Guy is well equipped for success with its leadership team it has higher royalty and marketing fees than most restaurant franchises. The industry average is 5.3% royalty fee and 2.3% marketing fee. Chicken Guy respectfully charges 6% royalty and 4% as a marketing fee. A threat to Chicken Guy is that there is limited proof of concept given that there are 7 locations and only 3 are franchises.
A significant strength of the Guy Chicken Franchise is the advertising and brand power Guy Fieri offers. There are few competitors that possess a Food Network Celebrity endorsing their restaurants.
Chicken Guy also offers All-Natural Ingredients and provides a wide variety of sauces and milkshakes. Chicken Guy employees are highly trained as restaurant managers go through 136 hours of classroom and restaurant training.
How Much is a Chicken Guy Franchise?
You can expect to pay between $767,500 and $1,482,50 for a Chicken Guy Franchise in 2022.
Estimated Initial Investment
| Type of Expenditure | Amount: In-line, End Cap or Drive Thru | Amount: Nontraditional Restaurant | To Whom Paid |
|---|---|---|---|
| Initial Franchise Fee | $20,000 | $20,000 | Chicken Guy |
| Application Fee | $30,000 | $30,000 | Chicken Guy |
| Grand Opening Required Spending | $7,500 | $2,000 | Vendors |
| Leasehold Costs and Building and Site Improvements | $400,000 – $900,000 | $600,000 – $1,200,000 | Contractor, Architect |
| Furnishings, Fixtures and Equipment | $180,000 – $250,000 | $180,000 – $250,000 | Vendors |
| Signage | $20,000 – $50,000 | $20,000 – $50,000 | Vendors |
| Point of Sale System | $15,000 – $25,000 | $15,000 – $25,000 | Vendors |
| Technology | $5,000 – $15,000 | $5,000 – $15,000 | Vendors |
| Graphic Items | $30,000 – $60,000 | $30,000 – $60,000 | Vendors |
| Professional Fees | $5,000 – $10,000 | $5,000 – $10,000 | Attorney, accountant, and other business advisors |
| Initial Manager Training | $15,000 – $25,000 | $15,000 – $25,000 | Third parties |
| Pre-Opening Costs | $15,000 – $40,000 | $15,000 – $40,000 | Vendors |
| Additional Funds – 3 months | $25,000 – $50,000 | $25,000 – $50,000 | Vendors |
| TOTAL ESTIMATED INITIAL INVESTMENT | $767,500 – $1,482,500 | $962,000 – $1,777,000 |
Chicken Guy Franchise Requirements:
The Franchisees must pay a $50,000 development fee for each Chicken Guy. Following approval, you must be prepared to pay a $5,000 deposit fee. Franchisees are also expected to lease locations preferably in large shopping plazas or malls.
Franchisees must be prepared to face all costs associated with the construction and equipping a Guy Fieri Chicken Guy location. Franchisees are required to be directly involved with the operation of their franchise. They must also own a majority stake in the franchise itself. Finally, Franchisees must be prepared to pay the $767,500 – $1,482,500 development costs when opening their location.
On-Going Fees:
- Royalty Fee: 6% and the a
- Marketing Fee: 4%
- Brand Fund: 2%
- Up to $30,000 annually
- Franchise Renewal Fee: $10,000
Comparison with Direct Rivals:
Chicken Guy’s main rivals are Chic-Fil-A and Kentucky Fried Chicken. Chic-Fil-A does not have a minimum net worth to open a location, however, it has a 15% royalty fee and takes 50% of all profits from Franchisees. This is among the highest fees in the food and beverage industry. Meanwhile, KFC requires a minimum net worth of $1.5 million and $750,000 in liquid assets. KFC has a 4% royalty fee and a 5% marketing fee.
Franchise Opportunities and Costs:
Since there are a limited number of Guy Chicken franchises, potential franchisees have the ability to open several locations. Chicken Guy offers a discount on the initial development fee if you open 3 or more locations.
The company also has the ability to grow its digital revenue streams with the creation of a rewards app program to boost customer loyalty. Additionally, Chicken Guy is also growing its online ordering and catering services.
Chicken Guy does not list minimum net worth or liquid assets to open a location. Like all other franchises, Chicken Guy has numerous fees in order to operate and grow over time. These can include insurance costs, the royalty and marketing fees listed above, renewal fees, and other costs. See these expected fees below:
Expected Fees
| Type of Fee | Amount |
|---|---|
| Gift Card Reconciliation | Total amount of gift cards sold from Franchised Restaurant |
| Indemnification | Our and our affiliates’ losses and expenses |
| Interest | Interest on the amount owed from the date due until paid |
| New Product and Suppliers Testing | Reasonable cost of inspection and actual cost of testing |
| Reimbursement of Insurance Costs | Our out-of-pocket costs of obtaining coverage |
| Relocation | Our reasonable expenses and an agreed minimum royalty fee during the period in which the Franchised Restaurant is not in operation |
| Renewal Fee | $10,000 |
| Software Licenses and Updates | Actual cost of license fee and updates |
| Taxes | Our expenses |
| Transfer | $10,000 |
| Website Fee | $0 – $1,000 |
| Early Termination Damages | Amount of the average weekly Royalty Fees that you owed for the one year period prior to termination, multiplied by the lesser of 104 weeks or the number of weeks remaining in the term of the Franchise Agreement |
Conclusion:
While there is limited financial information available about the success that Chicken Guy franchises currently make there is major potential for this franchise. Guy Fieri’s brand and marketing power allow this new chain to stand out from its competitors. Additionally, Robert Earl and Earl Enterprises provide the necessary expertise to help all new franchises get off the ground. The Chicken Guy menu options and sauces allow it to compete with the major competitors within the industry. Finally, Chicken Guy incentivizes franchisees to open multiple locations meaning that the brand is expected to grow significantly in the next few years.
