Chick-Fil-A is one of the best known names in franchising, and they have a business model that is very unique to the franchise world. For starters, they are closed on Sundays (14.2% of the year). For perspective, compare that to McDonald's which requires their franchisees to be open 24/7/365! Secondly, they are unabashed purveyors of the Christian faith. This alone makes them stand out, since it's typical of corporate America to steer away from making public stances on "controversial" topics, such as religion.
Last year, over 60,000 people applied to open a Chick-fil-a! 60,000! And they only awarded 120! So, why is the demand so high? According to their website
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Our franchised Operators are the backbone of the Chick-fil-A chain. Chick-fil-A, Inc. stands ready to support each franchisee and to honor our heritage by fostering their dreams. Taking that commitment seriously, we are looking for long-term partners who are a good fit–and we know our Operators are, too.
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So, is the term "partner" applicable when describing the relationship between Chick-Fil-A and the franchisee? Honest Abe vs. Chick-Fil-A... Who will emerge victorious?
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The Numbers
- Startup costs for Honest Abe Roofing are typically lower than those of the franchise systems reviewed, but not in this case. The franchise fee for Chick-fil-A is only $10,000! Compare that to the $35,000 Franchise Fee that Honest Abe Roofing has and Chick-fil-A jumps out to an early lead. Chick-fil-A's total cost of opening ends with the franchise fee! the franchisee will not spend another dime of their own money before opening.
- Royalty fees are a bit complicated. Chick-fil-a does not really charge any royalties. The royalty fee for Honest Abe is only 7%, which is low compared to other systems, but it's still higher than the 0% that Chick-fil-a has. Chick-fil-a is extending it's lead! *[But wait! Chick-fil-A may not charge a royalty, but they do get their money! The structure is set up so they get all of the money from purchases of the franchise and they split the net profits with the franchisee]
- Item 19 of the Chick-fil-A Franchise Disclosure Document states that in 2017 the average location did $5.2 million in gross sales. Compare that to the $8.1 million that Honest Abe Roofing reports in Item 19 of our F.D.D. and you have a clear winner in the revenue category.
- It's neck and neck. We'll have to look at differences between the business models themselves to determine a winner here.
Business Differences
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Chick
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- As a franchisee you will be expected to work in the business daily. And, by work, they mean WORK. You're expected to help the kitchen staff during the lunch rush and keep the books, hire employees and make sure the bathrooms are clean. You are also prohibited - in most cases - from owning any other businesses during your time as a Chick-fil-a franchisee.