Chick-fil-A shakes up fast-food

According to Chick-fil-A, 60k people apply to be operators every year — and only ~80 are selected. With a 0.13% acceptance rate, it’s harder to become a Chick-fil-A franchisee than it is to get into Stanford University (4.8%), get a job at Google (0.23%), or even become a special agent for the Secret Service (1%). Completely flipping the business model on its head!

An insightful article talking about the franchisee model in the US QSR industry and how the franchisee model for Chick-fil-A is different from the rest. Intersting fact in the article: With an acceptance rate of mere 0.13%, it is harder to become a Chick-fil-A franchisee than it is to get into Stanford University (4.8%) or get a job at Google (0.23%).

One of the most common franchise questions I get is about Chick-fil-A. I'm a bit hesitant to post this because there are far more NON-food business ownership options, but it's a good, informative piece. Hope you find it informative!

I get asked the "Chick-fil-A" question all the time as a franchise consultant. This is a great article that provides some really interesting data on a ton of fast food franchises. Long read but VERY educational. If you are interested in researching franchise ownership, check us out at FranNet.

https://lnkd.in/gWaeJGJ Unlike other franchise models, Chick-fil-A — not the franchisee — covers nearly the entire cost of opening each new restaurant (which, according to its financial disclosures, runs from $343k to $2m). The franchisee only pays the $10k franchise fee. #sales #smallbusiness #businessandmanagement

Are franchises worth the upfront costs and royalties? I've been pondering this question since reading this breakdown in the The Hustle on why Chick-fil-A's franchise fee is only $10,000 (answer: they take 15% of your sales and 50% of your net profit): https://lnkd.in/ef__R_F The story is an interesting dive into the world of restaurant franchises and how much owners pay in both royalties and building costs to have the name brand. My roadtrip stalwart McDonald's, for example, takes 4% of a franchise's revenue, according to the report. That's on top of the $1.3 to $2.2 million to open the store. The tradeoff to forking over those profits is having an already established name behind your business. I wonder if that's still enough of a draw. Did you consider opening a franchise before deciding upon your current restaurant concept? If you do own a franchise, what were the selling points and what do you think of the business model now? #LinkedInSmallBusiness #restaurants #franchises

To anyone curious about the costs of operating a fast-food franchise, this article has lots of detailed information. There are vast differences in investment requirements, financial performance, and profitability. Interestingly, by-and-large the investment requirement or financial performance (for the franchisee) is not correlated to the operator’s brand equity. Chick-fil-A stands out with a completely different pricing model in selling its franchises than the other brands. And finally this interesting tidbit: “51% of food franchisees earn less than $50k per year and only around 7% take in $250k.” #branding #pricing #marketing https://bit.ly/2R6RZLw