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Franchises > Chick-fil-A

5 Things You Need to Know Before Investing in a Chick-fil-A Franchise

First of all, you shouldn't think of getting a Chick-fil-A franchise as "investing."

Chick-fil-A is one of the most successful and influential fast food chains in America. Indeed, Chick-fil-A restaurants are the most frequented fast food restaurant in 38 out of 50 states, according to a study by Business Insider and Foursquare. And QSR Magazine released a report that the average Chick-fil-A makes about $4.4 million in sales per year -- $1.7 million more than the next best restaurant, Whataburger.

So, if you're looking for an awesome investment opportunity, then Chick-fil-A sounds like a home run. But is it? Here are the five things you need to know before buying one of the chicken franchises.

Related: Our Top 10 Franchises You Can Buy

5 Things You Need to Know Before Investing in a Chick-fil-A Franchise

1. Chick-fil-A isn't an investment.

Chick-fil-A is very clear on this front: If you're thinking of getting a Chick-fil-A restaurant solely because it's a good investment, or because it could help you transition to something else down the road, then the company isn't interested in letting you run one of its restaurants. Instead, according to its website, "The Chick-fil-A franchise opportunity requires that the individual be free of any other active business ventures and operate the restaurant on a full-time, hands-on basis."

This philosophy might help Chick-fil-A reach its potential at each location, but it also means that you won't be able to work on any other sort of projects.

Related: Just How Much Does It Cost to Own a Fast-Food Franchise?

5 Things You Need to Know Before Investing in a Chick-fil-A Franchise

2. Chick-fil-A is expanding in 28 states.

Right now, Chick-fil-A has focused its growth opportunities to 28 states:

Arizona, California (especially L.A. County, Orange County, San Diego County and San Francisco Bay) Colorado, Connecticut, Florida (especially South East Florida), Georgia, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New York (especially Long Island and New York City), North Dakota, Oregon, Pennsylvania, Rhode Island, Texas, Utah, Washington and Wisconsin

This is a wide-ranging list, so unless you live in Alaska or Hawaii, it's likely that there could be opportunities near you. You can learn more about potential locations either by applying or by attending an operator event.

Related: 5 Affordable Franchises You Can Start for Less Than $10,000

5 Things You Need to Know Before Investing in a Chick-fil-A Franchise

3. Chick-fil-A is incredibly picky when choosing operators.

It isn't easy to get a Chick-fil-A franchise. According to AOL, the company only accepts about 75 to 80 new franchises each year, despite the fact it receives around 20,000 applications on an annual basis. That means about 0.4 percent of applicants get approved. By contrast, Harvard Business School accepted 11 percent of its applicants for the Class of 2019. 

In other words, Harvard Business School accepts 27.5 times more of its applicants each year than Chick-fil-A. With that in mind, consider your own history before applying. Do you have a strong background in business? Will your references give you powerful recommendations? What will make you stand out from everyone else?

Related: 5 Low-Cost Franchises You Can Start for as Little as $4,000

5 Things You Need to Know Before Investing in a Chick-fil-A Franchise

4. Chick-fil-A wants more control than other fast food restaurants.

For example, Chick-fil-A doesn't call the people who run its restaurants "franchisees." Instead, they're called "operators," which helps signify their role in the company. According to AOL, "Operators do not own or receive any equity in their businesses. The company picks the restaurant's location, and then owns the restaurant.

"Franchisees cannot sell their locations or pass them on to the next generation. Nor can they open multiple locations, which can limit franchisees' potential profits," it reports.

So, if you have the intention of buying a franchise you can later sell, Chick-fil-A isn't for you.

Related: 5 Franchises You Can Buy for Less Than $18,000

5 Things You Need to Know Before Investing in a Chick-fil-A Franchise

5. Chick-fil-A pays every startup cost.

If you've started to wonder why anyone would consider purchasing a Chick-fil-A franchise, then this is a powerful reason. Because Chick-fil-A wants to maintain ownership of the franchise, the company chooses the location, buys the real estate, constructs the restaurant and purchases the equipment.

All you have to pay is a $10,000 franchise fee

Contrast this with McDonald's, where you'll need at least $1 million to get a restaurant up and running, or Culver's, where you could need more than $4 million.

Chick-fil-A's impossibly low price tag helps make it accessible, even despite its irregular business model and low acceptance rates, and it's part of what makes it so successful.

Related: 24 Top-Ranked, Affordable Franchises You Can Buy for $25,000 or Less