Posted on 11/20/2019 10:17:28 AM PST by BDParrish
There is a lot that Chick-fil-A has done right. Earnings per store or AUV's (average unit volumes) are at the top of the QSR50 at 4.4 million. To put that into perspective the average unit volume of a Subway store is a paltry $422,000...
...3. You own nothing and build no equity. This one is huge. In a typical franchise arrangement after you have spent years working hard and building up a business when it's time to retire or move on you can typically sell that business or pass it on to your family. Successful franchises can be worth millions. In the case of Chick-fil-A however you own nothing and because you have no equity in the business you have nothing to sell. Ownership is always retained by corporate - not you. So are you really an owner? Its interesting that on Chick-fil-A's own website they they don't refer to franchisees as owners but as "operators" - and many states have tried to have Chick-fil-A re-classify operators as employees not franchise owners and therefore entitled to employee benefits.
...5. Low earnings. Now Chick-fil-A is quite secretive regarding their facts and figures so information is difficult to come by, but it appears that the general consensus is that owners receive between 5%-7% of the gross. So let's put that in perspective at 5% if your store does 1 million you would recieve $50,000, 2 million you receive $100,000, at 3 million $150,000 and at 4 million you would receive $200,000. So that would put the average store owner Chick-fil-A earnings at $200,000 per year at 5% and $240,000 per year at 6%. Now a quarter million a year is a pretty good salary, but from a franchise ownership perspective only receiving 6% of the gross is quite low.
(Excerpt) Read more at franchise.city ...
Don’t worry, Cathy Truett himself told my friend who is an operator, that they have 40,000 applicants to select their 100 or so stores each year. Buy in is immaterial, income is unlimited as you split your profits with them. You don’t need to be worth anything it is the long character evaluation you have to pass and have excellent personal financial responsibility. Thousands are begging to get in, stupid article. They prefer people without $3 million in liquid assets like McDonalds so you have an appreciation tonteam with them to build your business. Like I said, stupid article.
The most POSITIVE aspect to this company is the “turnover rate” , for ANY company or store to keep 40% on average of its employees within that industry is unheard of . For that number alone you can see why they want to have the personal who get 200k-300k a year to be on site as opposed to just popping in every once in a while to grab some profit ....think about it . If you want the WHOLE enchilada yourself start a restaurant business and see how tough and time consuming it is laet alone dealing with a general public that will beat and kill for a “chicken sandwich!” (Popeyes of course)
CFA will fail. They just caved in. Their product is not that good.
The CFAs by me are always crowded. Every time I go there is a line of cars around the bldg. And they have employees taking orders from cars way before they get to a speaker. CFA is a frikkin gold mine.
I always go inside though. And there is always a line of people too.
Thanks. The chicken that we had was rubbery, wet, and had little flavor and it had a thinly sliced tomato on top. Maybe some lettuce? Maybe the bacon would help.
A bun would have added flavor and might have made the sandwich appealing. More mayo might have helped, too.
CFA really blew it my view. They had a loyal base and good growth every year. The perception is they caved to the militant creeps and it will make 0 difference with them meanwhile their loyal base is really shaken from what I can see and nothing is more shaky then fast food chain preferences.
Um...
Reason number umptyfratz: Fast food sux
RE: Top Six Reasons NOT to Get a Chik-Fil-A Franchise.
REASON #1: The name of the franchise is often mis-spelled :)
Yeah right. They have already been around more than half a century. You failed your prediction already.
My first inclination was to respond on the cherry-picked excerpt but after reading the full article, I came away with a different opinion that what I would have said otherwise.
This is a very well-run franchise and yes, it is more accurate to call the franchisees "operators" as opposed to "owners."
However that may be the key to success. By "marrying" the operators to the stores, the stores are going to be much better run. Contrast that to other franchises that allow absentee owners to hire their own operators while they sit on a beach in the Caribbean, allowing the store to go to seed.
The 5-7% of gross sales is a pretty sweet deal for the operator considering the average annual gross at a Chick-Fil-A is $5.3 million. This translates to an average annual income to the operator of around $318,000 a year. Not a bad deal for the operator who only has to pony up $10,000 upfront - with Chick-Fil-A assuming the rest of the up-front costs (well over $2 million).
Chances are however you will never get one. Apparently there are thousands of people in line ahead of you waiting for a franchise.
I'm not a fast food guy - my low-carb keto-style diet pretty much prohibits it. But the few times I've been in a Chick-Fil-A, they were clean, the employees were happy and friendly and I got a real positive vibe. Sort of like how McDonalds used to be when Ray Kroc was still alive.
I looked into franchising many years ago including Dunkin Donuts, Mailboxes Etc (now UPS Store), and Subway. The biggest hangup for me was the massive turnover of the employees and the overall unreliability of the ones you had. That was the biggest complaint that other franchisees had about their businesses. Also, an involved franchisee puts over 100 hours a week into it. It really does become your life unless you have the big bucks to hire people to run it for you.
Glad I never got into it.
I have a friend that is a UPS Store franchisee. He says that he bought a job.
I haven’t tried eating their sandwich without bread. I can’t imagine it being very good.
Cobb salad with spicy cold-grilled chicken and avocado ranch dressing. Just sayin’... :)
Love, O2
A small business consultant colleague always advised his clients of that pitfall and worked to steer them away from that choice.
“ Yeah right. They have already been around more than half a century. You failed your prediction already.“
Eh. You’re probably correct. Still, bad business decision. They will not gain anything by caving.
Reading comments from the new COO of chick-fil-a, who engineered the new company stance on charitable donations, Chick-fil-a might be the new spokesman for lgbtq causes.
On my! I did not see my mis-spelling until you showed me! Thanks, and sorry, (blush).
Thank you very much. I do appreciate you perspective!
I agree. Poor decision but I’m sure it’s not their first. Chic fila are good people and they are on our side. They will correct this in time.
Thank you for your excellent thoughts! I had a tough time excepting the article. Glad for what you said. 300 word limit for excerpts, I tried to stir you up you know?
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