Is
Chick-Fil-A
a franchise?
How many
Chick-Fil-A
franchises
are there?
What are the
Chick-Fil-A
franchise
fees?
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).
Note: The fees presented here can be found in the Item 5 of the Franchise Disclosure Document. For a complete list of all the fees borne by the franchisee, please consult the Franchise Disclosure Document.
How much does
it cost
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.
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?
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.
