What Does it Cost to Open a Chick-fil-A Franchise?

Chick Fil A

If you’re considering opening up a fast food restaurant, one of the best deals going is Chick-fil-A. It’s among the most successful food franchises in the United States today. One of the largest hurdles involved with opening any new restaurant is the startup costs. You must purchase the real estate, pay for the construction of the building and buy all of the equipment to get the new venture started. While this may sound a bit daunting, Chick-fil-A is one of the least expensive to get started because the company is willing to pay all start-up costs including the purchase of the land, construction of the building and they’ll also buy all the equipment for new franchisees to open a new location. The cost to you is a mere $10,000. This makes Chick-fil-A one of the cheapest fast food restaurants to open.

How to apply

In order to get in on the action with Chick-fil-A, there is an application process. The corporation maintains an online application form on their website. The competition is a bit stiff because on average, there are 20,000 entrepreneurs throwing their hat into the ring and applying each year. From this pool, the company selects between 75 and 80 for new restaurant locations per year. You must complete the form that lets them know you have an interest in becoming a franchisee. If you’re chosen, Chick-fil-A will contact you to set up an interview. The company is strict and may also want to talk with your business partners, your family members, and your friends as well.

What happens if you’re selected?

If you’re among the fortunate few who are hired to run a Chick-fil-A franchise, you must complete a training program that lasts for several weeks prior to opening and operating your new restaurant. Since the company is firm about its reputation, you’ll learn about the established processes and business protocols that every franchise owner is required to follow. In most cases, franchisees are not allowed to open more than one Chick-fil-A restaurant. This is one of the limiting factors when it comes to making big profits and expansion. As a franchisee, you’re also expected to roll up your sleeves and be willing to do the hands-on work involved in running the restaurant and providing services to your customers. This is the Chick-fil-A way. If you’re not comfortable with being intimately involved with the day to day tasks involved in operating one of these restaurants, then this probably isn’t the right franchise for you.

Expectations of new franchise owners

The corporation believes that community service is vital and each franchise owner is expected to get involved in community events. This kind of activity can be an excellent way to establish and maintain a positive reputation in your local community. You could sponsor a teacher or student night, recognize members of the service and much more, then advertise it. The company is aware of the power of community involvement and it is appreciated by those that benefit, increasing the popularity of the restaurant.

There’s a catch

Sound too good to be true? There is a catch involved in owning a Chick-fil-A franchise. While the startup costs for each new owner are remarkably low, and they pay for most things up-front, the fees are high. You’re required to pay a fee that is 15% of sales in addition to 50% of the profit that remains and this is the pre-tax amount. When you compare it to the fees that the McDonald’s franchise charges of 4% on gross sales and 10.7% lease costs, it’s not really that great of a deal.

The positive

New Chick-fil-A franchise owners are not required to meet a net worth threshold. This is a big deal for entrepreneurs who don’t have a lot in the way of assets, liquid or otherwise. It opens the door for more people than many of the more strict competitors. On average, Chick-fil-A generates a higher revenue annually than the rest of the competition. Taco Bell’s startup costs are between $1.2 and $2.6 million and McDonald’s requires franchisees to pay between $1 million and $2.2 million just to get started, and you must have liquid assets of a half a million to be considered.

Final thoughts

If you’re interested in becoming the owner of a popular fast food restaurant franchise, Chick-fil-A has made it easier than the others. You don’t have to be rich to join their team. You just need to have an intense passion for serving the public and a willingness to be involved in all aspects of the daily operation. While the lease fees are high, these restaurants pull in the revenue consistently, so you have the opportunity to make a decent living for your efforts.

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