UA-130601786-2 UA-130601786-3 UA-130601786-4 UA-130601786-5 UA-130601786-6 UA-130601786-7 UA-130601786-8 Things to Consider Before Trying to Invest in a Chick-fil-A Franchise
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Things to Consider Before Trying to Invest in a Chick-fil-A Franchise

April 1, 2018

 

Daily I receive inquiries into someone wanting a Chick-fil-A franchise

 

Who can blame them! 

 

For the last few weeks one was being built near our house - "finally" as my children noted - and the excitement was increasing as opening day was getting closer.  On the day it opened the line was one of those made of tales that get passed down at parties!  It was as though you could literally see them printing money out the back as though the US Treasury Department had a pop up printing facility.  Brilliant!  Or is it in the long haul?

 

 

1. Chick-fil-A Is Not an Investment

Sounds rather counterintuitive when looking for a business to grow and invest your money and time into.  Chick-fil-A is very up front about this from the beginning.  According to their website, "The Chick-fil-A franchise opportunity requires that the individual be free of any other active business ventures and operate the restaurant on a full-time, hands-on basis."  This clearly outlines an Owner Operator model.  You will need to leave your current job and make this your full time position.  When the agreement with Chick-fil-A is over, then what?  You cannot sell the business - it is not yours to sell - i.e. Zero Assets.  

Many clients look to add to their financial portfolio, something build and grow, possibly sell later on for a nice ROI or maybe pass down to a family member.  This is not possible with Chick-fil-A.

 

 

2. Chick-fil-A is Incredibly Picky When Choosing Operators

It is not a easy feat to get one of these restaurants.  The company only accepts approximately 75-80 new franchises a year - even though it receives around 20,000 applications a year!  Twenty thousand!  This is a 0.4% acceptance rate.  Would you like to know that Harvard Business School accepted 11% of it's applicants for the class of 2019.  It's a food lottery.

So what does it take to be accepted?  Only Chick-fil-A knows.  Comparable to the Google formula for SEO and airline ticket prices - I suppose we will never know.  There are guesses, and rumors......but at the end of the day it is a mystery.  To start, I would recommend having:

  • Proven track record of business and management experience

  • Successfully managed your personal finances

  • Results-oriented self-starter interested in starting and growing a business

  • Have no other active business ventures

 

3. Chick-fil-A Wants Control

More than other fast food restaurants they would define Type A personality.  If you are accepted within the lottery of applicants and make it through the rigorous interviewing process than you are not a franchisee - you are an operator.  "Operators do not own or receive any equity in their business."  Chick-fil-A chooses the location and they own the restaurant (real estate).  Double ownership for them - business and real estate.

If you have hopes of selling a business you worked hard to grow - squash those thoughts.  You're back into working for the big man in a differently woven structure - but you're not working for yourself.

 

Another little tricky piece of information is that an operator cannot own multi-units.  A huge plus in franchising to growing and building wealth.  

 

 

4. Chick-fil-A Pays All Start Up Costs

I have to admit - having been a franchise owner of a service industry business - this piece sounds extremely alluring!  And I know I am not the only one!  But what gives?  The entry cost for operators is low - as in crazy low: $10,000.  Sounds to good to be true!  Well, it is true - to a point!  But let's look behind the curtain some as there is usually something more there when the surface looks this shiny.

 

Since Chick-fil-A  maintains full ownership of every aspect: real estate choice, owns the building and property, the restaurant equipment - the operator is not left with any assets. 

 

Other food concepts with nationally known names range in the $1M - $4M start up costs.  Silly high!  But you have some of that 'pie' of ownership when you're agreement is done....and more than likely you can extend the agreement!  

 

Chick-fil-A also states on their website that the initial amount is $10,000 be to be prepared for other expenditures. 

 

My goal is not to tell someone Chick-fil-A is bad, but to educate and inform as to the realities of the pros and cons.  If you want a full-time job with a lower entry cost, potentially excellent 'salary' with no assets - than by all means apply.  Or as the lottery saying goes: You Have to Play to Win.  To try - click on the image below for the link:

 

 

While you are waiting to hear back on a no or a yes to continue further into the rigorous process - let's take a look at some franchise businesses that also fit your criteria.  Cover all your bases.  It doesn't cost you anything to work together and find other strong concepts that match up with you.  

If you want ownership, multi-units, ability to be semi-absentee than Chick-fil-A is not for you.  Reach out to start a conversation to find franchises that are a good fit for your goals.

 

Where does a business fit into your plan?

 

If you would like to connect and find out if franchising is a good path for you, call me at: 800.361.8292 or please reach out by clicking on the icon below:

 

 

 

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