It Only Costs $10,000 to Open a Chick-Fil-A, But There's a Catch
For some people, owning and operating a fast food franchise is a life goal and a potentially quite lucrative business venture.
Unfortunately, owning a franchise is financially out of reach for most people, as it typically requires a rather substantial investment up front to even get started, according to a piece from Business Insider in 2014.
For several popular fast food chains — like Taco Bell, Wendy’s, KFC and McDonald’s — potential franchisees have to show that they have a net worth of at least $1.5 million or more and liquid assets of at least $750,000. All told, start-up costs can range anywhere from $1 million to $3.5 million.
Other popular restaurants, such as Pizza Hut and Subway, cost a bit less to open up but still require substantial investments of hundreds of thousands of dollars.
But there is one extremely popular fast food franchise that is initially incredibly cheap to own and operate — relatively speaking — and only costs about $10,000 up front to get your foot in the door.
That restaurant is Chick-fil-A, and they are offering an incredible deal to potential franchisees who want to operate their own restaurant — with a catch.
According to their website, outside of the initial franchise fee of $10,000, the only other requirement is that “the individual be free of any other active business ventures” and be prepared to “operate the restaurant on a full-time, hands-on basis.”
They should also be able to show that they possess a “proven track record in business leadership” and have “successfully managed (their) personal finances.”
As such, owning a Chick-fil-A restaurant is not an ideal venture for someone looking for a passive business investment that doesn’t require actual work, nor would it work for somebody seeking to own multiple restaurants, as they don’t allow multi-unit operators.
Furthermore, since Chick-fil-A covers all of the costs of construction and equipment, the parent company gets to choose the location where the new restaurant will be built.
There are some other stipulations as well that were covered in an October 2017 article by The Balance, such as the fact that franchisees won’t actually “own” the restaurant, and therefore can’t sell it or pass it along to heirs, nor will it build any equity in the company. They also must abide by the long-standing tradition of remaining closed on Sundays, barring an emergency in the community.
Also, likely to offset the low start-up cost, franchisees are required to give 50 percent of their pre-tax profits to the company, a substantially higher margin than the other aforementioned restaurants which typically only charge advertising/royalty/service fees of between 5-10 percent of gross sales.
As for the likelihood of actually acquiring a Chick-fil-A franchise, you’d better hope you are one of the 70 to 80 applicants chosen out of the 20,000 potential franchisees who apply for a restaurant every single year.
All of that said, for somebody who isn’t afraid of hard work and is looking to operate a popular fast food restaurant in a direct hands-on fashion, this could be a great opportunity.
Obviously, considering the success of the franchise, the fantastic food and their excellent reputation, the company is doing something right.
Please share this story on Facebook to let everyone know about how they could go about becoming an operator of a Chick-fil-A franchise.
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