HOW CAN YOU BUY A CHICK-FIL-A FRANCHISE?
Quite often, I have seen people move from rich to average. Like five to ten years before that time, they were riding big cars and living large, then they got retired. They become humble and begin to live on average.
We could say a little percentage of these people were unlucky or life just happened. Majority of these sets of people weren’t unlucky, the bitter truth is that they never prepared for their future. After working for over 50 years as a government worker, you’re in debt, full of responsibilities, your house is on mortgage and out of the system.
Trust me, that’s not what I would call resting. One of the main reasons why this happens frequently to retirees is because they never thought of investing their money in something lucrative whether a business or a property.
If you are lucky to read this article, we are going to be discussing one of the most lucrative aspects of investment- franchising. It is more or less like becoming a partner of a business that’s already famous. To be specific, we will be discussing the Chick-fil-A franchise, one of the most popular and lucrative fast food chains with promising profits per year.
What is a Chick-fil-A Franchise?
After much research, I realized that one of the best types of franchise companies to invest in is the fast food companies. They already have a large database of customers who enjoy their meal every single day. It would be a great idea. Unlike other fast food companies, Chick-Fil-A is quite different. Most fast food companies usually start out with a food recipe as their trademark but later expand into several other types of meals to accommodate every customer. However, since the beginning and up-to-date Chick-fil-A still offers the same meal to its customers all over the state.
Chick-Fil-A is a fast food restaurant which started as Dwarf Grill, a small fast food business. Later, it was re-invented and registered as Chick-Fil-A. Its first location was in Atlanta, now in about 47 states out of 50 states in the United States. They are known for just one type of meal to their customers which is chicken sandwich. The “A” in the name was put there to tell people that their chicken is A grade which is short for excellence.
The founder of Chick-Fil-A, Truett Cathy was a religious person who believed in one day of rest out of the seven days of the week. That’s why Chick-Fil-A is usually closed on Sunday to rest and honor God. However, there was a day which they opened on Sunday for the sake the passengers left stranded during this power outage at the popular Atlanta airport- Atlanta Hartsfield-Jackson International Airport. That was early last year (January 2019). Also, there was another time when they opened for a 14-year old who was suffering from cerebral palsy and autism. They opened to honor his 14th birthday in Alabama.
That was actually the only time the tradition was broken to cater for those in need. Chick-fil-A also tried to expand its reach to Africa. In 1996, they opened a branch in Durban, South Africa and in 1997, they commissioned another branch in one of its capitals- Johannesburg. After about three years of opening these two branches, Chick-Fil-A realized that they were not bringing any profits. They closed them down in 2001.
Even with that, it is still among the top fast food chains in the world ahead of Whataburger, McDonald’s, Starbucks and so on. It records about $4.5 million dollars per year which is three times more than the closest fast food chain to it. It is one of the best places to invest money for your future.
Chick-fil-A has been in existence for over 73 years so it is a great idea to buy the franchise company and become one of their partners. Every year, they keep expanding little by little until they reach every corner of the United and its neighboring countries- United Kingdom, United States and Canada. The year 2015 was a great year for Chick-fil-A, a large three-story, 5,000 square feet was commissioned in Manhattan. It remains the biggest Chick-fil-A branch in the whole of Europe.
Consider Chick-fil-A a great investment opportunity to fall back to after retirement. It doesn’t cost much and it can be really difficult. This article will teach you how to buy a Chick-fil-A franchise.
How does Chick-fil-A work?
Buying the Chick-fil-A franchise is entirely different from every other kind of franchise. They have their unique requirements and guidelines that must be followed. These requirements have kept them intact and undivided since the foundation was laid by Truett Cathy. Let’s quickly take a look at how Chick-fil-A works.
They retain ownership
This is to say, after purchasing the franchise, you don’t own the business. They own the business. They choose the location of the restaurant, build it and provide you with whatever you need. Also, they can close it down at any time if they think it wasn’t a good idea in the first place.
It is a full time job
Their franchise isn’t available for people looking for a passive business opportunity. They call their franchise owners “operators” which implies that after buying your way into business you work for them and not for yourself. So if you have another business venture that’s active in the United States then this type of franchise isn’t for you. This is why this Chick-fil-A business opportunity or proposition is perfect for retirees with a great track record in leadership.
You can’t sell the property
You have the mind to buy their franchise and resell to make profit after a long while, this isn’t for you. Chick-fil-A franchise doesn’t allow you to do that. As a matter of fact, since it is not your property, you have no rights to sell.
Chick-Fil-A is a good business investment that every retiree can invest in and make a lot of profit annually. All you need is:
- An entry fee of $10,000 (USD) or $15,000 (CAD).
- Chick-fil-A will select the location for you.
- You will go through a series of training.
- Other educational items will be made available such as development courses and franchise support.
Four Things You need to Know Before Investing in Chick-Fil-A Franchise
I figured we should discuss the necessary things about Chick-fil-A Franchise before jumping into it. Chick-Fil-A is different from other fast food chains such McDonald’s and Culver’s. These few things will help you make a decision whether it is a great idea to invest or find another alternative.
It is cheaper than other franchises
You don’t need a lot of money to buy the Chick-fil-A franchise. With about $10,000 you are in as one of their partners or operators. It is certainly not because it is not really costly to erect a building or equip it with the necessary items that makes it a restaurant. As a matter of fact, it is very expensive. McDonald’s offers 1 million dollars as a startup cost. It also takes about four times that price range to buy a franchise at Culver’s fast food chain.
Chick-Fil-A is one of the lowest priced franchises in the world. This is because they want to:
- Retain ownership of the business
- Keep track of the business in general
- Ensure profitability and success in general
- Retain their authenticity and quality services they offer.
Even though with all these, it is still more successful than the other fast food chains in the United States.
It doesn’t allow you have other plans
So many entrepreneurs that are ready to invest have it in mind to invest in many businesses and reap the profit from all. Chick-fil-A doesn’t allow that. You can have a real-estate business and be running a Chick-fil-A business. They want a full-time operator. They believe that if your attention is divided into several components, the business will not progress. Your sole purpose as an operator in their business is to take care of the business with all your efforts to ensure that the business is successful in that location. Consider it as a business opportunity and not an investment.
It is expanding
The goal of every business chain is to expand to several locations in the world. The more it expands the more profits it makes annually. We can Chick-fil-A is currently living the dream with 28 states confirmed to be saturated by its presence. The list of those states in the United States and its environments include:
- New York
Chick-Fil-A has expanded to these locations mentioned above. Though there are several other states in the United States and its neighboring countries, this list shows us how much work has been done as regards expansion. There is a probability that Chick-Fil-A is looking to expand to your location. All you have to do is fill out an application to join Chick-Fil-A list of operators or attend one of the seminars Chick-Fil-A organizes for their operators.
It is very challenging to become an operator
Chick-Fil-A is very strict when it comes to approving applications. Researchers found out that it is easier to become a student at Harvard than become an operator in Chick-Fil-A. Every year, they receive close to 20,000 applications from different people all over the state. Out of these applications, only 75 individuals are accepted to become one of them. At most, 80 people become operators per year.
This is because Chick-Fil-A chooses quality over quantity. They believe it’s not about how many businesses are established but it’s all about how much those businesses can yield. Since they are responsible for taking care of almost all the startup costs, they ensure their operators are chosen with care, patience, qualifications, professionally and through the necessary requirements.
Ensure you check out a few things before applying. Some of these things you might want to check include:
- Background in business
- Qualities and qualifications
- Strong recommendations
Is it profitable?
Before investing in a business, the first important question you must ask yourself is “is it profitable?” That’s because the purpose of investment is to earn more profit. We have talked about Chick-fil-A, what it is about and how it works.
Generally, fast food establishments are one of the most profitable businesses in the world. People love a good meal every working day either you are offering breakfast, lunch or dessert. It all depends on how people trust your business services.
As a result of this reason, instead of starting from scratch- building your brand, creating awareness, putting out ad campaigns and so on, which can take a long time before gaining grounds, you can just purchase a franchise from an already established company. In this case, a fast-food company.
That company is already known to provide quality services to the community and so you don’t need much advertisement before getting sales on a daily basis. Since people already know its worth in that country, it won’t be much of a problem introducing it to them. One thing about buying a franchise company, especially a fast-food franchise is that it can be really expensive.
Most companies offer a franchise fee as much as $50,000 or as low as $20,000. For instance, Jack in the Box and Burger King offer up to $50,000 while Subway offers a franchise fee of $15,000. That’s little compared to other fees involved. We have not even talked about construction and equipment fees. So it might cost as much as $2,000,000 dollars to buy the franchise of a fast-food company. Most of these companies won’t even consider your application if you don’t worth as much as $5 million.
These costs mentioned to buy a fast-food franchise contributes to the profitability of the business. You also have to check its yield per year, its customer base, and so many other costs or expenses required to run the business. This would determine whether the business is profitable or not.
Apart from the franchise fee required by the franchisor, they also demand a particular percentage of your monthly sales. It is dependent on the franchise agreement. It is usually between 4-8 percent. For instance, Taco Bell demands about 5.5%, Burger King demands 4.5% and McDonald’s demands 4%. Some companies also demand between 2-6% of the franchisee’s monthly sales for advertising purposes.
However, Chick-fil-A works differently from all the other companies that’s why it is one of the most profitable franchises in the United States.
So how is it profitable?
Unlike other fast-food companies, Chick-fil-A offers something unique and entirely different. You don’t have to break the bank before buying a franchise. Once accepted, it will cost you:
- A franchise fee of $10,000 which is the cheapest when compared to other fast-food companies like McDonald’s, Burger King and so on.
- You don’t need a lot of money to get started. Most fast-food chains have a net-worth requirement which you have to meet before you can even be considered at all.
- You don’t have any money to cater for construction and equipment. Chick-fil-A takes care of that.
- Also, they take care of the real estate for you.
Since they take care of most of the expenses involved in starting the business, it makes it easier to start once your application has been approved. Despite all these mentioned, they still make millions of dollars annually. This is why it is a profitable franchise one can consider investing.
You may be wondering what the franchisor (Chick-fil-A) gains from the purchase. Apart from the franchise fee of $10,000, they demand for:
- 15% of monthly sales
- 50% net profit.
It is a win-win for both the franchisee and franchisor.
It takes a lot to run a fast-food business as it is one of the most competitive businesses in the world. You have a lot of expenses to handle- the controllable ones and uncontrollable ones. Fast-food businesses usually come with high investments and a high risk of failure. Chick-fil-A helps reduce the risks with its low investments rate.
How to buy a Chick-fil-A Franchise?
Start with qualifying for franchise ownership by applying here. This process will help guide you into whether owning a Chic-fil-A makes sense for you and your goals or whether there might be a better alternative.
According to a particular statistic I saw recently which stated that it is easier to get into Harvard than to buy a Chick-fil-A franchise. It was reported that over 50,000 candidates apply to Harvard every year and only about 1,500 are accepted.
However, Chick-fil-A receives nearly 20,000 applications yearly and they manage to accept about 110 operators annually. When we compare the two, we can confirm that it is true. In this aspect, we will discuss the few tips you can use to purchase a Chick-fil-A franchise.
Do thorough research
Research is very essential when it comes to buying a Chick-fil-A franchise. This will help you gain the knowledge you will need to successfully purchase Chick-fil-A franchise. Do your research on the company- Chick-fil-A, what it is all about, its principles, philosophies and how they operate. This will help you get familiar with the business. You can check their website for every information that may be useful for you. In addition, you may find different testimonies of existing operators in the business, how they did it and what they did to be accepted.
Pen down and evaluate your reasons for purchasing a Chick-fil-A Franchise
Most people do not know or understand their reasons for buying a Chick-fil-A Franchise that’s why they fail. This is one of the core questions they ask during the interviews. They would want to know whether your reasons for purchasing a franchise corresponds with their goals. They don’t want a liability in their business.
Understand the company’s requirements
Chick-fil-A has provided a list of requirements which they follow strictly. Once you do not meet their requirements you cannot be accepted. Some of these requirements include:
- Full-time commitment.
- Incredible track record in business leadership.
- Proper management of personal finances.
- Burning interest in starting and growing a business.
- Must not be actively involved in any other business.
Ensure all these requirements are in check, then you are good to go. In addition to that, you also have to consider what they don’t want.
- They don’t want an investor who is looking for many opportunities to invest. For instance, the investor wants to purchase more than one unit of the franchise.
- They don’t want someone who wants to resell after some years.
- They don’t want someone that would request for a specific location to build the Chick-Fil-A. They are responsible for that.
Visit their website to get started with your application
Visit Chick-fil-A website and get yourself acquainted with all the information provided there. Don’t forget to check out their frequently asked questions provided for applicants. Fill out the application there and expect their response within a month. The application is called an Expression of Interest. This is how you reach out to Chick-fil-A to become one of their operators. There are usually a lot of applications that Chick-fil-A reviews that’s why it takes a long time for them to respond. If you have been accepted, they will respond by sending a formal operator’s application.
Complete your Application
If you are accepted, they will respond by sending a formal operator’s application for you to fill. After you have completed your application, you will receive a notification on the type of store and location where you will be operating the business. You will need an initial deposit of $5,000 to gain the right to operate their business.
Complete an organized training program
After you have been accepted into the family, Chick-fil-A doesn’t leave you just like that. They organize some training programs for their newly selected operators to ensure that they are ready and well-prepared to run the business properly. After completing these training programs, then you can start running your business.