Why Chick-fil-A is the Best Fast-Food Concept But an Average Franchise Opportunity, According to One Industry Expert Discover the secrets behind Chick-fil-A's phenomenal success as a fast-food giant and why its franchise model, while unique, may not fit every entrepreneur's vision.
By Ryan Zink •
Key Takeaways
- Chick-fil-A distinguishes itself by concentrating on a limited menu, ensuring high-quality food and exceptional customer service.
- Chick-fil-A's franchise model presents unique challenges, including the inability of franchisees to sell their business or own more than one location.
- This model offers low entry costs and a share in profits but limits growth opportunities and lacks an exit strategy for investors.
Opinions expressed by Entrepreneur contributors are their own.
Chick-fil-A, a renowned fast-food establishment with an 80-year legacy, is celebrated for its fan-favorite cuisine, top-notch service, and memorable 'my pleasure' experiences. However, its franchise opportunity comes with a unique twist. In this article, we'll dive into what makes Chick-fil-A an exceptional fast food concept while only being an average franchise opportunity.
Unwavering focus
Chick-fil-A's secret sauce lies in its unwavering focus. Just like aiming a rifle precisely at a target, Chick-fil-A hones in on a few key aspects it knows it can excel at, and it does so brilliantly. This approach is similar to being a "rifle" rather than a "shotgun" in business. It's all about hitting one bullseye rather than several random targets.
Before we get into what makes Chick-fil-A an exceptional concept, let's rewind a bit and explore the history of this iconic brand.
The birth of Chick-fil-A
In 1946, the founder, Truett Cathy, began his journey with a restaurant he named the Dwarf House — it wasn't even named Chick-fil-A yet. Cathy was on a quest to perfect the chicken sandwich, a pursuit that spanned a whopping 18 years. Finally, in 1964, he achieved chicken sandwich perfection with a simple combination of bread, chicken, butter, and pickles.
He trademarked the name Chick-fil-A, with the "A" signifying grade A quality. Chick-fil-A was born, and the same mouth-watering chicken sandwich we enjoy today is a testament to Cathy's unwavering commitment to excellence.
Related: 5 Things You Need to Know Before Investing in a Chick-fil-A Franchise
The Chick-fil-A experience
When you think of Chick-fil-A, what comes to mind? Great food served quickly, impeccable service, and, of course, that ever-present smile. "My pleasure" seems to be the anthem of Chick-fil-A employees, making every visit a delightful experience. Chick-fil-A has set the standard for what a fast-food restaurant should be.
Just as Southwest Airlines is known for online flights and Ritz-Carlton for five-star service, Chick-fil-A stands out as a brand that instantly conveys its mission. It's a brand that speaks for itself, one where you understand precisely what they do.
Non-stop growth
Chick-fil-A isn't just a successful fast-food chain; it's an industry titan. It currently reigns supreme as the highest-grossing fast food chain globally. But here's the intriguing part: others have followed its model and are thriving too. Names like Raising Cane's and In-N-Out Burger have embraced Chick-fil-A's philosophy of doing less but doing it exceptionally well.
Chick-fil-A's remarkable achievement includes an unprecedented 60 years of non-stop business growth since the first store opened in 1967. The impact of this extraordinary journey is evident in the fact that Chick-fil-A averages over $5 million per location. That's more than what McDonald's and Burger King combined can claim.
Related: 24 Interesting Facts You Should Know About Chick-fil-A
Chik-fil-A's culture
These five reasons combine to drive Chik-fil-A's success:
Food Quality: Chick-fil-A's menu is intentionally limited, focusing on what they do best. This streamlined approach ensures top-notch quality and a loyal customer base.
Customer Experience: Chick-fil-A's employees are trained to create exceptional experiences for customers. The core four principles - make eye contact, smile, speak enthusiastically, and stay connected - are the foundation of their service excellence.
Belief in Something: Closing on Sundays, even when it could mean more revenue, shows Chick-fil-A's commitment to its values. This choice has created a fiercely loyal following.
Building a Strong Brand: Chick-fil-A has built an iconic brand over eight decades, standing as a shining example for other restaurants.
Profit Margins: With an average profit margin of around 30%, Chick-fil-A franchisees can expect substantial returns on their investment.
The catch(es)
Now, you might wonder, with such stellar success, why isn't Chick-fil-A considered the ultimate franchise opportunity? Two crucial factors set it apart from the traditional franchise model.
1. Lack of Exit Value: Chick-fil-A franchisees do not have the opportunity to sell their business or its assets. Once they're done, they're out. There's no exit strategy, which is a significant drawback for those seeking long-term investment.
2. Limited Growth: Chick-fil-A franchisees can only own one location. While this laser focus aligns with the brand's philosophy, it hinders those aspiring to scale and grow their franchise empire.
Related: Why Chick-fil-A Employees Never Say 'You're Welcome'
Still a dream for many
Despite these limitations, Chick-fil-A offers an enticing proposition for a specific group of individuals. Here's why:
Low Entry Cost: The initial investment is a mere $10,000, with virtually no risk involved.
Profit Share: Chick-fil-A franchisees typically earn around 5-7% of the business's profits. Considering an average location's revenue, this translates to a substantial income. However, there's a significant caveat: The competition to become a Chick-fil-A franchisee is fierce. With more than 50,000 applicants annually and only a handful of new locations opening, the odds of being selected are less than 1%.
Chick-fil-A undeniably boasts one of the best fast-food concepts in the world. It has mastered the art of focus, quality and customer service. Yet, when it comes to franchise opportunities, it falls short due to the absence of exit value and limited growth potential. While Chick-fil-A may be a dream come true for some fortunate individuals, it may not align with the aspirations of those seeking scalable and long-term franchise investments.
