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What Does It Take to Open a Chick-Fil-A Franchise?

By Ephrat Livni, Esq. on January 14, 2016 3:05 PM

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 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 for Chick-Fil-A. It has the lowest startup cost of any 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 $700 million in 2014, making $5.8 billion in sales. It is larger than every pizza brand in the country and the eighth-largest fast-food chain in the U.S. by sales.

It generates more revenue per restaurant than any other chain nationally yet charges franchisees only $10,000 to open a new 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 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?

It's relatively easy financially to get into Chick-Fil-A ... But later, franchisees 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 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-homosexual 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 you are considering getting into a franchise, 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.

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