Chick-fil-A is a fast-food restaurant chain best known for their fried-chicken sandwiches. Operating in malls, airports, train stations, bus stations, as standalone units, and even as food-trucks, they are the largest chicken sandwich franchise in Canada.
Chick-fil-A was founded in Hapeville, Georgia, in 1946. Pioneers of the idea of operating a restaurant within a shopping mall – they opened their first mall location in 1967 – the brand has expanded across most of North America. Today they operate more than 2,600 locations.
Chick-fil-A at a glance:
Chick-fil-A set no net worth or liquid asset requirements on potential investors, and the cost at start-up can be relatively low for a business operating in this sector. However – and it’s a big however – Chick-fil-A can be very picky about who they choose to operate their franchises.
According to past statistics, only 0.4% of franchise applicants successfully obtain a license. Additionally, the company demand that you take an active day-to-day role in running the business. This is not a franchise you can operate as a remote or passive investor.
Depending on location, size of your store, the amount of inventory you carry at opening, the size of your retail team, and many other variable start-up costs, opening a new Chick-fil-A franchise can cost anywhere from $300,000 up to $2,450,000.
However, Chick-fil-A can be one of the cheapest chicken franchises to get into, because, unlike other franchises, Chick-fil-A purchases the real estate and covers any construction costs, plus all the equipment required to open the business. They own virtually everything and you lease the complete infrastructure from the company via monthly payments. This can make it easier for those without deep pockets to get started with a Chick-fil-A franchise, but you will never have equity (ownership) in your business, other than the right to operate the franchise. You will be more of a manager than an owner.
Additionally, although Chick-fil-A make it easier for average investors to get into their business, the fees and charges that come after opening can be substantial. What looked low cost at first can be quite expensive at the final tally.
After store opening, there are a raft of ongoing fees, including things like:
Additionally, you may have to pay other fees on a case-by-case basis. For example:
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| Key Costs Guide | Low | High |
|---|---|---|
| Franchise fee | $15,000 | $15,000 |
| 1st month equipment rental | $750 | $5,000 |
| 1st month location rent | $1,500 | $85,000 |
| 1st month insurance | $300 | $11,000 |
| Opening inventory | $18,000 | $95,000 |
| Other start-up costs | $5,000 | $2,225,000 |
Yes. According to external research, and depending on if your location is in a mall, or a standalone unit, (standalones make approximately 4x more turnover than those found in malls), you can expect average annual turnover of $2,700,000 (mall) or $8,500,000 (standalone) and have profits of 15%. The average standalone unit makes an annual net profit of $1,277,000 before taxes and depreciation.
Very low. According to industry estimates, the failure rate for Chick-fil-A franchises is less than 5%, and over 96% of Chick-fil-A restaurants have been in business for more than 50 years.
Assuming you can pass the brand’s vigorous investor selection process, the relatively low cost of entry makes a Chick-fil-A restaurant an attractive proposition for investors seeking access to the fast-food industry. With profits at 15% – on the high end of average profits for the sector – and most owners collecting personal income of $200,000 – $240,000 annually – it can still be a good investment even if you never own the equity.
Chick-fil-A keep a very tight grip on their franchisees and the company decides the locations and sets the territory. Investors receive no exclusivity, but the brand has a vested interest in ensuring they do not oversaturate an area.
Chick-fil-A provide comprehensive support to their franchisees. Available resources include:
It begins with an initial application, which you can start here. If you meet the brand’s selection requirements, (and you can launch a restaurant in their available locations), you may qualify to open a Chick-fil-A franchise. After receiving approval, get started with an initial investment, followed by a period of intensive training.
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Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.
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