The Cost Of Opening A Chick-Fil-A Franchise

If you’ve been on our site before, you’ll know that franchises are something that we’re relatively familiar with. We’ve covered a multitude of them. Therefore, we’ve analyzed how to obtain various franchises and how much money you can potentially earn by owning one. However, since we’ve done it for many brands, it’s only natural that we cover one that is relatively popular, especially in the United States. That franchise is Chick-Fil-A. Of course, there is a lot of controversy surrounding them. However, it goes without saying that you, the reader, have most likely heard about them. At least, if you’re in North America.

Here in Toronto, we have a few and I remember going to it because it’s something new/different. While the lines were large, we still managed to get our food relatively quickly. However, the lines being long is to be expected as the hype surrounding the establishment was monumental. While some Chick-Fil-A franchises may earn more than others, especially in Toronto, there is most likely an average we can look at. This average will be for both how much money you can earn and how much it’ll cost to obtain a Chick-Fil-A restaurant. Therefore, we will take a dive into these factors, along with what makes Chick-Fil-A special.

What Makes Chick-Fil-A So Special?

If we’re looking past the controversy that surrounds Chick-Fil-A, there are quite a few factors that make them a special brand. First and foremost is their customer service. Chick-Fil-A is known for having some of the best customer service practices when it comes to fast-food chains. There was even a multitude of jokes and memes about it. While has died down, this still holds true. While spending time in the states, I witness a large Chick-Fil-A line-up. Specifically in the drive-thru. However, there were workers who would walk out and take orders via their tablet. This blew my mind because there will be an extremely long lineup at other fast-food restaurants. However, you’ll still have to wait to order. While waiting is the norm, it’s just something extra that Chick-Fil-A does to ensure customer satisfaction.

The next aspect that makes them special is both the quality of their food and consistency. Chick-Fil-A, while not the absolute best, is still very good. This is not an unpopular opinion. They try and bring out the flavors by making their food as simple as possible. Their chicken sandwiches have two buns, the meat, and two lonely pickles. However, the seasoning of the chicken mixed with MSG is what makes them noticeable. However, their food is similar to In-and-Out Burger in one particular way. They are consistent. When you go to Chick-Fil-A, you know what you’re getting. They have a small menu so you are not overwhelmed with options. However, they do have more choices than a restaurant like In-and-Out Burger. Keeping the menu manageable ensures that they can keep the quality and maintain the standard that has been set all these years.

While the menu may differ, above is a picture of the Chick-Fil-A menu. As you can see, it is only 18 items. If we compare this to a restaurant like Burger King, they have 18 beef burgers alone. This does not include chicken/fish burgers, sides, desserts, and many more.

How To Acquire A Chick-Fil-A Franchise

If we refer back to the previous articles, we’ll notice one major proponent in owning and operating a franchise. That is fees. For example, if you want to own a McDonald’s franchise, you need to have a lot of capital, apply and pay ongoing fees in including royalties. However, with all this responsibility, you are a franchisee. Essentially, you “own” that franchise. You’ve put in the investment are able to earn money relative to how much sales your establishment is making.

While this may be common, Chick-Fil-A does something entirely different from other well-known chain restaurants. They don’t allow you to build equity or have ownership. This is a double-edged sword for you. On one hand, you only have to pay the franchise fee of $10,000 and you can become what they call “an operator”. Operators run the franchise from top-down, similar to a franchisee. However, you will not own that franchise. Chick-Fil-A maintains ownership every step of the way. This can be seen as a bonus because you will not have to spend the large initial capital that places like McDonald’s demand. However, you will have zero control over the franchise. Therefore, a franchise isn’t really an “investment” in the traditional term. You don’t put in money, take a large risk for a potentially uncapped payout.

Although, with a franchise, you know that you’ll most likely earn that fee back plus more. This is due to the fact that franchises earn quite a considerable amount of money. Furthermore, Chick-Fil-A chooses the location of the restaurant. Therefore, there is a high likelihood that they’ll do their research and choose a location that is optimal. However, what is not likely is the chance of you actually acquiring a franchise.

Chick-Fil-A acquires over 20,000 applications per year and accepts 70-100. If we’re lowballing the applications and highballing the acceptance, that is still only 0.5%. Therefore, Chick-Fil-A tends to select applications where they know for certain they can make the franchise successful. Furthermore, the ideal applicant needs to make their franchise a top priority. This means you cannot own multiple franchises or have any other business ventures on the side. You need to be at the franchise and make it your top priority above anything else (in the business sense).

Chick-Fil-A values services and teamwork above all else. Therefore, they try to foster a healthy work environment. This is why you, the operator needs to always be there. Your focus needs to be on making the customer and employees happy. This is also another reason why they’re closed on Sunday (next to them being a highly religious organization). By giving your employees Sunday off, they lessen the strain on people feeling overwhelmed and allow them to live their lives outside of the franchise.

How Much Money Can The Franchise Earn?

Unfortunately, Chick-Fil-A tries to keep its earnings and numbers as confidential as possible. However, from what can be found, operators can potentially earn 5% – 8% of the companies sales per year as a salary. This is quite low when comparing it to other franchises. However, there are a few factors that need to be taken into account. First is the fact that significantly lower stores than leading chains such as McDonald’s. However, they are still in the top 50 for the highest-earning franchises. This is due to the fact that each unit makes more sales and earns more revenue. Therefore, they don’t need as many franchises.

To find out how much money you can earn, we need to look at the average sales per unit. Rounding down, the average Chick-Fil-A unit earned approximately $4,000,000. Therefore, if you were an operator earning 5%, you would earn approximately $200,000 per year. This is quite a considerable amount of money, especially since you only put in $10,000. However, it is up to you to decide whether or not it outweighs all the downsides. This being a (relatively) capped salary, have no ownership, likely needing to move, and low acceptance rate.

Shameed Chris Khan

Shameed is just a man on a mission to help those around him gain financial success. Obsessed with writing about all things finance, this GTA native is constantly learning and sharing his experiences with others.