Chick-fil-A Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$518,000

-

$2,803,000

OPERATING PROFIT

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Emily

Updated

February 1, 2024

Is

Chick-Fil-A

a franchise?

Yes,
Chick-Fil-A
is a franchise and
currently
accepts
franchise
applications

Chick-fil-A is a distinguished name in the fast-food industry, renowned for its original chicken sandwich. Founded by S. Truett Cathy, the brand's journey began in 1946 with its first restaurant in Hapeville, Georgia. A core aspect of Chick-fil-A's identity is its commitment to closing on Sundays, a tradition established by Cathy to allow employees time for rest, family, and worship, reflecting the company's values and dedication to work-life balance.

Chick-fil-A began its franchising journey in 1967 with the opening of its first dedicated location in the food court of Greenbriar Mall in Atlanta, Georgia. Headquartered in Atlanta, Georgia, Chick-fil-A stands out for its unique offerings and customer service. The menu extends beyond the signature chicken sandwich to include a variety of items such as waffle potato fries, salads, and an array of sides and beverages, catering to a wide range of tastes and preferences.

The company's emphasis on quality ingredients and fresh preparation contributes to its reputation for great food and service. Innovation is at the heart of Chick-fil-A's operations, from the creation of the original chicken sandwich to the design of its restaurants and customer service approaches like upstream ordering.

The company also prioritizes environmental responsibility, evident in initiatives like upcycling and the use of rPET fabric for employee uniforms. Chick-fil-A's commitment to community and family is reflected in its corporate purpose, which emphasizes being a faithful steward of all that is entrusted to the company and having a positive influence on everyone it interacts with.

How many

Chick-Fil-A

franchises

are there?

In 2022, there were
2411
outlets in the United States, of which
2339
are franchises, and
72
are corporate-owned.

What are the

Chick-Fil-A

franchise

fees?

Initial franchise fee

$10,000

Royalty fee

15.0%

Advertising fee

3.25%

Starting a Chick-fil-A franchise involves several fees that are crucial for prospective franchisees to understand. These include:

Initial franchise fee ($10,000)
The initial franchise fee is a one-time payment of $10,000 made by the franchisee upon signing the Franchise Agreement. This fee is non-refundable, and $5,000 of it is maintained by Chick-fil-A as an initial payment of working capital for the business under the Franchise Agreement. This working capital deposit is maintained throughout the franchisee's tenure and is reconciled upon termination or non-renewal of the Franchise Agreement (Item 5 of the 2023 FDD).

Royalty fee (15%)
Chick-fil-A has a unique royalty fee structure. The franchisee is required to pay a Base Operating Service Fee, which is calculated as 15% of the franchised restaurant's sales, less amounts charged to franchisees for equipment rentals. This fee is essentially a royalty for the sublicense of intellectual property, allowing the franchisee to operate under the Chick-fil-A brand (Item 6 of the 2023 FDD).

Advertising Contributions (Variable)
Advertising contributions are payments made by the franchisee to support advertising efforts. The amount to be paid into the advertising fund each month is determined by Chick-fil-A and may vary. These contributions are non-refundable and are used to fund advertising at the national, regional, or local level across various media channels including print, radio, television, and digital platforms.

Chick-fil-A may also require franchisees to make expenditures on local advertising in lieu of payment to the advertising fund. The local advertising efforts are aimed at promoting the Chick-fil-A brand and may include temporary or permanent promotional campaigns, honoring coupons, and participating in giveaway promotions for food or drink items at their respective Chick-fil-A Restaurants (Item 6 of the 2023 FDD).

Technology Fee (Not specified)
The FDD does not specify a technology fee.

Local Advertising (Variable)
Franchisees may be required to spend on local advertising, which could be in lieu of or in addition to the advertising contributions to the fund. This local advertising is aimed at promoting the Chick-fil-A brand within the local market or geographical region of the franchisee.

The expenditures on local advertising are non-refundable and may include costs for promotional campaign materials and devices, such as counter cards, posters, banners, signs, photographs, giveaway items, and gift cards (Item 6 of the 2023 FDD).

How much does

it cost

to start a

Chick-Fil-A

franchise?

It costs between
$518,000
and
$2,803,000
to start a
Chick-Fil-A
franchise.

Starting a Chick-fil-A franchise involves various costs, which are detailed in Item 7 of the 2023 FDD. The total estimated initial investment range is $518,385 to $2,803,435.

This range includes the initial franchise fee, equipment costs, real estate costs, and other expenses associated with opening a restaurant. The total cost can vary widely depending on the location, size, and type of restaurant.

Type of Expenditure Amount
Initial Franchise Fee $30,000
Opening Inventory $13,500 - $140,000
First Month’s Rental of Equipment $750 - $5,000
First Month’s Lease/Sublease of Premises $2,550 - $85,500
First Month’s Insurance Expense $240 - $12,000
Additional Funds $491,345 - $2,550,935
Total Estimate of Initial Investment $518,385 - $2,803,435

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Does

Chick-Fil-A

provide

training

to its

franchisees?

Yes,
Chick-Fil-A
provides training to its franchisees.

The franchisor provides training for franchisees. The training is conducted by Chick-fil-A's professional training staff and covers various subjects including orientation to Chick-fil-A training/business, ServSafe®, People Strategy, Brand, Marketing & Public Relations, and Menu Education.

The training program includes both classroom training at Chick-fil-A’s corporate headquarters in Atlanta, Georgia, and "On the Job" training at company operated restaurants and/or franchised restaurants of other franchised operators.

Franchisees are also required to train any managerial personnel they hire to assist in operating their franchised Chick-fil-A Restaurant business, and they may use Chick-fil-A’s proprietary operations and training manuals and materials for this training.

Does

Chick-Fil-A

provides

territory

protection?

Franchisees are granted the limited right to operate a Chick-Fil-A Restaurant at a specific location designated by Chick-Fil-A. The rights granted are limited to the franchised business location and any additional business locations designated under an Additional Business Amendment to the Franchise Agreement.

If Chick-Fil-A offers the opportunity to operate a food truck as an extension of an existing Chick-Fil-A Restaurant location, the food truck can only be used and operated at locations registered and approved by Chick-Fil-A.

This means that while franchisees have a specific location to operate, they do not have a broader exclusive territory, and their operations are confined to the designated and approved locations.

Can a

Chick-Fil-A

franchise

be run as

a passive

investment?

Chick-fil-A requires franchisees to directly supervise their franchised restaurant business.This requirement is aimed at ensuring that the franchisee dedicates their full time and personal best efforts to operate the franchised Chick-fil-A Restaurant business, thereby keeping free from conflicting enterprises or any other activities that would interfere with the operation of the franchised restaurant.

This setup essentially means that Chick-fil-A does not allow for a passive investment model where the franchisee can recruit an acting manager to run the day-to-day operations while they are not actively involved.

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