What Does It Take to Open a Chick-Fil-A Franchise?
Many people dream of owning a business but would prefer not to have to put all the parts together. Franchising is a good option for them because they can buy into an existing business that has already established all the basics -- what to sell, how to package it, how much things should cost, supply, marketing, and more.
But franchising has certain financial requirements. Buying in can be prohibitively expensive. Not so, however, for Chick-Fil-A, which offers enticing franchise opportunities. It has the lowest startup cost of any fast-food franchise and no minimum net worth or liquid asset requirements, according to Slate and Business Insider. But there's a catch.
Franchise Stats
Chick-Fil-A reportedly grew by $3 billion in 2021, recording $16.7 billion in sales — a 22% increase over 2020 sales. It is the third-largest fast-food chain in the U.S. by sales and is the nation’s biggest seller of fast-food chicken sandwiches.
It generates more revenue per restaurant than any other fast-food restaurant chain nationally yet charges an initial franchise fee of only $10,000 to open a new quick-service restaurant. And it doesn't require candidates to meet a threshold for net worth or liquid assets. That is nothing compared to buying into a McDonald's franchise, which will cost anywhere from $900,000 to almost $2.5 million.
"The barrier to entry for being a franchisee is never going to be money," Chick-Fil-A spokeswoman Amanda Hannah said, according to Slate. "We seek to find the very best business partners who find great joy in making other people's days. They do so with a combination of great business acumen, an entrepreneurial spirit, and a passion for serving others."
What's the Catch?
With the modest franchise fee and low initial investment, it's relatively easy financially to land a Chick-fil-A restaurant franchise. Later, however, franchise owners do pay. According to experts, the catch in the Chick-fil-A model for franchisees is that the company charges more for rent and services than other franchises. It also limits the number of locations a franchisee can own to one to encourage owners to remain engaged full-time in day-to-day operations.
Whether the following is a catch or an advantage depends on your perspective, but Chick-Fil-A also has some other unusual requirements, like a certain spirit. According to Slate: "Oftentimes, several operators in a market will combine resources to market events through advertising and promotion," Hannah said. "Our daddy-daughter date nights are an example of this."
Sound charming? Well, maybe ... if you believe church attendance should be encouraged. The company has a policy of keeping restaurants closed on Sundays and is, basically, Christian. It has been controversial for its anti-LGBTQ stance.
Certainly, getting in is not for everyone. The company reviews more than 20,000 applications a year and approves about 70 to 80 new owners annually.
Consult With Counsel
If becoming a franchise operator sounds like the kind of business venture you’re interested in, consult with counsel. A lawyer can help you to get all the information you need to see the big picture and make the right decision for you, as well as assist in the application process and interview process.
Related Resources:
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Consumer Guide to Buying a Franchise (FindLaw)
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