Chick-fil-A is a company which pays (almost) every startup cost. It’s really one of the big advantage. Franchise owners of Chick-fil-A are actually labeled as operators, which signifies that the control is with Chick-fil-A corporation, not the store owners. This results in the franchise owners to not receive or own any equity in their business. If you are looking to own your own business and have control of it, this is not for you.
Chick-fil-A Franchise Advantages
As a franchise owner, you won’t have to worry too much about the beginning and opening of your restaurant. Once you get accepted as a franchisee, Chick-fil-A will decide where your store will be located and pay for all the expenses to build it and the equipment too. They take great care in making sure that their franchises are successful. The main investment you’ll put in is the $10,000 franchise fee. For first-time franchise owners who are unsure of how to get started, Chick-fil-A does a lot of the work for you.
High Demand Less Supply
This is often the most foolproof way to get a successful business up and running. Their total gross sales may not look as much compared to other fast-food chains, but that is largely due to their low number of stores that are in existence. Though they are slowly expanding, and the number of total gross sales is steadily increasing. Having a fewer number of stores also creates a craving for Chick-fil-A, since they’re not everywhere like many other fast food restaurants. There will be high demand when there is a low supply.
Chick-fil-A also has a great emphasis on its Christian beliefs and family-oriented values. This has them closing all their franchises on Sundays. While many can see this as a loss of revenue, this piggybacks to the earlier conversation about supply and demand, so consumers will want to satisfy their craving. Revenue will be met with higher demand on other days, so there is no need to worry. Sunday will also give time for store owners to get much-needed relaxation, spend time with their family, watch Sunday night NFL, etc. This represents Chick-fil-A giving time and consideration to their employees.
Chick-fil-A Franchise Pros
• Much of the logistics are taken care of when opening
• Strong foundation in beliefs
• Low initial amount of money needed to start franchise
• Supportive company
• Every business will encounter challenges in the beginning and down the road. Here are a couple of challenges that Chick-fil-A franchisees may have.
Chick-fil-A Franchise Disadvantages
Can’t own the franchise
Company calls its franchise owner the operators. Operators do not own or receive any equity in their businesses.Nor can they open multiple locations, which can limit franchisees’ potential profits.”
Can’t choose the location
This also means you’re not able to choose where your location will be, which can be a downside for many franchise owner. If you’ve already started to wonder why anyone would consider purchasing a Chick-fil-A franchise, given that you can’t actually own the franchise, then this is a powerful reason. Because Chick-fil-A wants to maintain ownership of the franchise, the company chooses the location, buys the real estate, constructs the restaurant and purchases the equipment.
Can’t Sell the Location
You also cannot sell your location. So, if you have the intention of buying a franchise you can later sell, Chick-fil-A isn’t for you. Chick-fil-A is very clear on this front: If you’re thinking of getting a Chick-fil-A restaurant solely because it’s a good investment, or because it could help you transition to something else down the road, then the company isn’t interested in letting you run one of its restaurants. Instead, according to its 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.”
Unable to Pass onto Next Generation
You can’t pass Chick-fil-A franchise restaurant onto the next generation in your family. Chick-fil-A isn’t an investment.
You can’t own multiple Franchises
You cannot own multiple franchises without the approval from Chick-fil-A (which will be rare).
With such a hands-on company, you will have much less control over how you want to run your business. Although this may be great when you are first starting out, some can find it limiting and controlling later on. There may be decisions and changes you want to make, but everything needs to go through the corporation for approval first.
Chick-fil-A is incredibly picky when choosing operators.
Complicated Application Process
It simply isn’t easy to get a Chick-fil-A franchise. According to AOL, the company only accepts about 75 to 80 new franchises each year, despite the fact that it receives around 20,000 applications on an annual basis. That means about 0.4 percent of applicants get approved. By contrast, Harvard Business School accepted 11 percent of its applicants for the Class of 2019.
Recent Bad Publicity
Another obstacle that you may face is that there were also some controversies that have damaged Chick-fil-A’s publicity. The owners exposed their opinions about gay marriage and their donations to anti-LGBTQ organizations. This created a lot of backlash, protests, and boycotts to the chain. Opening a Chick-fil-A may risk you excluding a portion of the customer base due to these concerns and negative publicity. When making a franchise decision it’s important to keep this in mind. Although the chain is still largely popular, some people are still hesitant about dining at the restaurant.
Chick-fil-A Franchise Cons
• Recent bad publicity
• No passive income
• No potential for creating big inflow of revenue
• No control over your franchise
• Competitive application process
Contrast this with McDonald’s, where you’ll need at least $1 million to get a restaurant up and running, or Culver’s, where you could need more than $4 million.
This philosophy might help Chick-fil-A reach its potential at each location, but it also means that you won’t be able to work on any other sort of projects. Chick-fil-A insists on being your sole focus, not a passive income stream or part of your portfolio.
In addition, this creates a healthy relationship between corporate headquarters and the franchise owners. It relieves some of the pressure and creates a sense of community, which will persuade store owners to stay longer and invest in Chick-fil-A. Instead of a company and franchise owner, it feels more like a supported partnership between the two.
This is a wide-ranging list, so unless you live in Alaska or Hawaii, it’s likely that there could be opportunities near you. You can learn more about potential locations either by applying or by attending an operator event.