Today, Chick-fil-a is a leading fast-food chain in the United States, with thousands of restaurants across the nation. Over the years, Chick-fil-a has proven to be an extremely successful and profitable franchise operation and many entrepreneurs have expressed interest in exploring the franchise as an investment option.
To better inform these potential business owners, the International Franchise Professionals Group (IFPG) has comprised a comprehensive list of frequently asked questions (FAQs) about creating and running a Chick-fil-a franchise. In this article, we’ll provide answers to some of the most commonly asked questions, to ensure you have a better understanding of the process and the associated costs.
Overview of the Chick-fil-a Franchise
Chick-fil-a is a popular fast-food chain known for its unique and delicious chicken sandwiches, tenders, waffle fries, milkshakes and more. The franchisor currently has more than 2,400 restaurants in 47 states and Washington D.C. The company operates within the quick-service restaurant (QSR) segment, meaning they offer limited table service in some locations, but do not provide full-service meals.
The chain has earned a reputation for providing high-quality service and thoughtful brand experiences, meaning customers feel welcome and appreciated in the restaurant. Chick-fil-a trains team members to treat each other and their guests with respect and courtesy, furthering their value system of providing excellent customer service.
Chick-fil-a Franchise Requirements and Costs
In order to become a franchisee of Chick-fil-a, potential franchisees must first be reviewed and approved by the franchisor. The general requirements include individual and financial qualifications, such as financial stability, and a commitment to adhering to the company’s values, ethical practices, and high standards for customer service.
Qualified franchisees must also make a significant financial commitment. The estimated total investment to open a Chick-fil-a restaurant is $10,000 to $15,000. This includes the franchisee’s initial buy-in fee of $10,000 and the cost of construction and equipment associated with opening a new restaurant, which can range from $80,000 to $200,000.
Franchisees must also pay to cover the cost of real estate, if applicable. While Chick-fil-a does not generally own or lease the property in which its restaurants are located, the franchisor does have partnered real estate agents who assist in finding suitable locations. Franchisees, however, are ultimately responsible for making the necessary lease or purchase agreements at a cost that can range from $150,000 to $1.5 million.
Given the sizable investment necessary, potential franchisees must also consider the potential return of their investment. In addition to the franchise fee of $10,000, franchisees also typically pay a 4% ongoing royalty on their sales to the franchisor. The average unit volume (AUV) of a Chick-fil-a restaurant is estimated at near $4.4 million per year, which can lead to significant profits for franchisees after all associated costs have been taken into consideration.
General Tips for Stepping into the Franchise Business
Before becoming a franchisee, there are a few additional considerations to keep in mind to ensure the process goes as smoothly as possible. Here are a few tips to help get you started:
- Ensure you have enough funds – not only for the initial buy-in fee and construction costs, but to support the day-to-day operations of the restaurant. It’s also a good idea to have a financial cushion in case of any unforeseen circumstances.
- Familiarize yourself with the franchisor’s values and operational plans. When researching the Chick-fil-a franchise, make sure you can accurately communicate the ins and outs of the business, including the chain’s operational procedures, menu options, and customer service expectations.
- Take the time to properly evaluate your potential investments. Do your homework, speak to current franchisees, and understand what the process of running a successful business will entail. Make sure to read through all the paperwork, attend informational sessions, and then make an informed decision.
Think long-term. While the initial financial commitment to open a Chick-fil-a franchise may be significant, don’t forget that the payment is an investment for your future success and profitability. Take the necessary steps to ensure your success for the long-haul.
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