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How to Open a Chick-fil-A Franchise: Essential Considerations

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Entrepreneurs are often drawn to the possibility of running a Chick-fil-A franchise due to its relatively low franchise fee, high sales volume, and industry-leading customer service. However, getting approved to open a Chick-fil-A franchise can be very challenging.

In addition, potential franchisees must account for the ongoing costs, limited control and lack of ownership, and potential controversies surrounding the company’s religious beliefs and donations. For those who can overcome these challenges, a Chick-fil-A franchise can be quite profitable.

This guide explores what you must know about opening a Chick-fil-A franchise, including the costs, benefits, drawbacks, processes, and alternatives. Specifically, we’ll answer these questions and more:

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    What is Chick-fil-A?

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    Chick-fil-A is a very popular and well-known American fast-food restaurant known for its chicken sandwiches and dipping sauces. The company has a massive marketing presence and a loyal customer base.

    It’s quite common to see Chick-fil-A drive-thru lines wrapped around the block. The company boasted annual sales of $21.58 billion in 2023, up from $18 billion in 2022. Since the company’s founder, Truett Cathy, launched the business in 1946, it’s grown to over 2,600 Chick-fil-A restaurants nationwide.

    The company is also known for a heavy religious bent, which may or may not be attractive to entrepreneurs. For example, all Chick-fil-A restaurants are closed on Sundays. The company’s corporate ownership has also experienced controversy around donating to religious charities with an anti-LGBT agenda.

    Overall, Chick-fil-A is a widely popular fast-food establishment known for outstanding customer service, often viewed as the best in the industry. McDonald’s, perhaps the most successful fast-food franchise in the world, views Chick-fil-A as its top competitor.

    What is a Chick-fil-A Franchise?

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    Chick-fil-A uses a franchise model to expand its locations into new sectors. Under this business model, an entrepreneur pays a fee to open a Chick-fil-A restaurant. However, Chick-fil-A franchises work differently than most opportunities.

    The parent company decides the restaurant’s location, pays for all real estate and equipment, and retains full ownership of the property. The franchisee pays an initial franchise fee to open the restaurant plus ongoing costs to lease the equipment and location.

    Chick-fil-A doesn’t refer to franchisees as business owners, using the term “Chick-fil-A operator” instead. Running a Chick-fil-A restaurant feels more like being a manager or employee than an owner.

    Franchisees must work in the restaurant full-time and are responsible for managing the day-to-day operations, including hiring and training employees, purchasing supplies, and ensuring quality control. This makes it a very hands-on job and unsuitable if you’re looking for a passive income investment.

    Chick-fil-A provides support and guidance to franchisees through training programs, marketing assistance, and ongoing communication. Franchisees must adhere to Chick-fil-A’s strict standards and guidelines to maintain consistency across all locations. They are also expected to uphold the company’s values and commitment to customer service.

    In addition, franchisees do not build equity in the franchise and cannot sell their ownership or pass it down. Overall, owning a Chick-fil-A franchise can be a lucrative opportunity for entrepreneurs willing to invest time, effort, and resources into running a successful business without the benefit of owning it.

    How much does it cost to Open a Chick-fil-A Franchise?

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    The franchise fee for Chick-fil-A is relatively low compared to other fast-food chains, but there are other costs to consider. Overall, the total opening costs typically fall between $342,990 and $1,982,225, depending on factors like location and size.

    Here’s a breakdown of the expenses you can expect when opening a Chick-fil-Aloca location.

    Initial Costs

    • Franchise Fee: $10,000.
    • Starting Inventory: Between $18,000 – $95,000.
    • First Month Equipment Rental: $750 – $5,000.
    • First Month Location Rent: $1,400 – $90,000.
    • Opening Insurance Premium: $300 – $12,000.
    • Misc Opening Costs (utilities, signage, hiring & payroll, etc.): $250,000 – $2,000,000.

    Ongoing Costs

    • Base Operating Service Fee: 15% of monthly sales.
    • Net profit split: 50%.
    • Monthly Equipment Rental: $750 – $5,000.
    • Monthly Advertising Fee: 0% – 3.25%.
    • Monthly Rent: $1,400 – $90,000.
    • Monthly Insurance: $300 – $12,000.
    • Point-of-Sale (POS) System: $75 – $400/month.

    What are the benefits of operating a Chick-fil-A Franchise?

    Opening and running a Chick-fil-A franchise has many benefits, making it a lucrative business opportunity for entrepreneurs. Chick-fil-A is a well-known and beloved fast-food chain with a strong brand reputation. As a franchise operator, you benefit from the company’s established brand recognition, which can attract customers and drive sales.

    The company provides comprehensive training programs and ongoing support to franchisees. This includes assistance with site selection, marketing, operations, and more, helping franchise operators succeed in their business ventures.

    Chick-fil-A has a loyal customer base that appreciates the quality of its food, customer service, and community involvement. As a franchise operator, you can leverage this loyalty to build a dedicated customer following and drive repeat business.

    These franchises are known for their profitability, with many franchisees reporting high sales volumes and healthy profit margins. The company’s proven business model and operational excellence contribute to the financial success of its franchise locations.

    Chick-fil-A is known for its commitment to corporate values such as integrity, excellence, and service. As a franchise operator, you can align with these values and be part of a company that prioritizes giving back to the community and making a positive impact.

    Chick-fil-A offers a relatively low franchise fee compared to other fast-food chains, making it more accessible for the average person to become a franchisee. Additionally, Chick-fil-A covers the costs of the location, equipment, and even the training for franchisees, reducing the financial burden on those looking to start their own business. This support from Chick-fil-A makes it an attractive option for individuals looking to enter the franchise industry.

    What are the drawbacks of operating a Chick-fil-A Franchise?

    One significant drawback is Chick-fil-A’s strict operational guidelines. Franchisees must adhere to the company’s policies and procedures, limiting their flexibility in running the business independently. This can be challenging for entrepreneurs who prefer more autonomy.

    Despite more accessible initial franchise fees, the ongoing costs for a Chick-fil-A restaurant are more expensive than most. The base operating fee of 15% of monthly sales can eat into your profit margins. In addition, you must split net profits with the company 50/50. Additional costs include service fees, equipment rentals, and advertising.

    Franchisees don’t own the franchise and can’t build equity, sell the operation, or pass it down. Chick-fil-A operators must work in the restaurant and cannot own or work at another business. Most franchisees cannot open multiple locations, as Chick-fil-A is very restrictive regarding who can operate multiple locations. This significantly reduces profitability.

    The company’s stringent selection process for franchisees can be a drawback. Prospective owners undergo a rigorous evaluation process, including interviews and financial checks, which can be time-consuming and stressful. It’s estimated that less than 1% of applicants get approved, which is more restrictive than some Ivy League colleges.

    Chick-fil-A restaurants are not open on Sundays. This can further limit profitability, as weekends are typically peak fast food and takeout times. Also, the company’s controversy surrounding anti-LGBT donations could turn off some customers and potential employees.

    Lastly, owning a Chick-fil-A franchise does not guarantee success despite its popularity and strong brand reputation. Factors such as the Chick-fil-A location, competition, and economic conditions can impact profitability.

    Chick-fil-A Franchise Pros & Cons

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    Pros:

    • Strong brand recognition and customer loyalty.
    • Lower initial franchise fee than most fast-food restaurants.
    • Comprehensive training and support from Chick-fil-A corporate.
    • A proven business model with high success rates.
    • Access to national marketing campaigns and promotions.
    • Potential for high profitability due to popular menu items.

    Cons:

    • High ongoing fees, including 15% of sales & 50% of net profits.
    • Does not allow for passive income as you must work at the store.
    • Limited control over pricing and menu changes.
    • Controversies surrounding the company’s political and social stances.
    • Closed on Sundays, reducing potential revenue opportunities.
    • Chick-fil-A maintains ownership of the business and all assets.

    What are the steps to Open a Chick-fil-A Franchise?

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    Here’s the process to follow for opening a Chick-fil-A franchise.

    Complete the Application

    The first step is to fill out the application for a Chick-fil-A franchise. The process is similar to completing a job application, except you must also provide detailed information on your finances. The good news is that Chick-fil-A doesn’t have a minimum net worth or liquid asset requirement. You’ll also indicate your preferred geographic area.

    Chick-fil-A will review the application and determine if it wants to open a location in your stated geographic area. Additional qualifications include:

    • Strong leadership skills.
    • Financial stability.
    • Commitment to community involvement.
    • Willingness to operate the business full-time.
    • Alignment with Chick-fil-A’s values and culture.

    Interview

    The interview process for a Chick-fil-A franchise applicant typically involves multiple rounds of interviews with different team members. Candidates may be asked about their customer service skills, leadership experience, and commitment to the company’s values. Successful applicants often demonstrate a strong work ethic, a passion for serving others, and a genuine interest in the Chick-fil-A brand.

    Review the Franchise Agreement

    Before becoming a Chick-fil-A franchise operator, it is crucial to thoroughly review the franchise agreement and the Franchise Disclosure Document (FDD). These documents outline the terms, conditions, and financial obligations of operating a Chick-fil-A franchise, ensuring that potential operators are fully informed before proceeding. It is essential to carefully consider all aspects of the agreement to make an informed decision about becoming a Chick-fil-A franchisee.

    Attend the Multi-Week Training Program

    Chick-fil-A’s multi-week training program is known for its comprehensive approach to preparing individuals to run successful locations. The program covers various aspects of the business, including customer service, operations, and leadership skills. Participants often praise the training for its hands-on approach and emphasis on the company’s values and culture.

    Open Your Location

    To prepare for your Chick-fil-A location’s grand opening, train your staff thoroughly on customer service, food preparation, and company values. Stock up on all necessary supplies and ingredients to ensure a smooth opening day. Promote the grand opening through social media, local advertising, and community outreach to generate excitement and attract customers.

    Frequently Asked Questions

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    Here are the most common questions about how to open a Chick-fil-A franchise.

    Are there business loan options to fund Opening a Chick-fil-A Franchise?

    Franchisees must pay the initial $10,000 franchise fee without financing help. However, you can use business financing options such as loans to cover the remaining expenses.

    Franchise Loans: Franchise loans are specifically designed to help entrepreneurs finance the purchase of a franchise, such as Chick-fil-A. These loans typically require a down payment and have specific terms tailored to the franchise business model. Chick-fil-A franchisees may be able to obtain financing through the company’s preferred lenders or explore traditional small business loans from banks and credit unions.

    Franchisor Financing: Some franchisors provide funding to help franchisees option their locations. While it doesn’t offer startup financing, Chick-fil-A pays for many of those costs as part of its franchise process (buying the land, equipment, etc.). Chick-fil-A operators may also be able to apply for franchisor financing for ongoing costs.

    Small Business Loans: Chick-fil-A franchisees may also explore business loan options from third-party financing companies. Banks and credit unions tend to have stringent qualifications, so you might consider alternative small business loans.

    You might be interested in one of the following small business funding options through UCS:

    Are Chick-fil-A Franchises profitable?

    Chick-fil-A franchises are known for their profitability, with the average franchise generating around $4.4 million in annual revenue. Franchisees benefit from a proven business model, ongoing support from the corporate headquarters, and access to a loyal customer base. Despite the company’s strict selection process and operational guidelines, many franchise operators find success in running their Chick-fil-A locations.

    How much does a Chick-fil-A Franchise operator make per year?

    Most franchise operators receive reasonable compensation, but the annual amount can vary significantly depending on the state and location of the restaurant. According to ZipRecruiter data, the average annual income is $86,187. Top earners can make as much as $242,000 per year, and the top 75th percentile makes $125,000.

    Does Chick-fil-A provide Franchise support?

    Yes, Chick-fil-A provides extensive support to its franchisees, including training programs for operators and team members. It also provides marketing assistance, ongoing operational support, access to proprietary systems and technology, and regular evaluations to ensure success.

    Moreover, Chick-fil-A offers financial support through low startup costs compared to other fast-food franchises. This makes it an attractive option for aspiring entrepreneurs looking to enter the industry with a reputable brand.

    What other Fast Food Franchises should I consider?

    While Chick-fil-A’s relatively low startup costs and proven business model are attractive, some entrepreneurs prefer more autonomy in running their operations. Here are some other lucrative fast-food franchise opportunities to consider.

    McDonald’s: Known for its iconic golden arches, McDonald’s is one of the largest fast-food chains in the world.

    • Franchise fee: $45,000.
    • Estimated startup costs: $1 million to $2.2 million.

    Taco Bell: Famous for its Mexican-inspired menu items, Taco Bell is a popular fast-food franchise.

    • Franchise fee: $25,000.
    • Estimated startup costs: $1.2 million to $2.8 million.

    Subway: With a focus on customizable sandwiches and salads, Subway is a well-known fast-food franchise.

    • Franchise fee: $15,000.
    • Estimated startup costs: $116,600 to $263,150.

    How to Open a Chick-fil-A Franchise – Final Thoughts

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    Opening a Chick-fil-A franchise can be lucrative for entrepreneurs willing to invest time and effort. The brand’s strong reputation, support from the company, and potential for success make it a desirable option for many.

    Individuals can embark on a rewarding journey as franchise operators by following the application process, meeting the requirements, and demonstrating a commitment to Chick-fil-A values. However, you must consider the ongoing costs and limited control that come with Chick-fil-A’s unique franchise model.

    Contact us if you have more questions about opening a franchise or applying for a small business loan. Our alternative financing experts can help you find the best finding options for your business goals.

     

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