Chick-fil-A is a true anomaly in the fast food world. In an industry dominated by mega-franchisees operating dozens or even hundreds of locations, Chick-fil-A has built a $10 billion business on the backs of small-scale owner-operators, each running a single restaurant. The company‘s unique franchise model empowers these operators to build thriving businesses and make a positive impact in their communities, all while maintaining strict brand standards and delivering exceptional customer experiences.
As a retail and consumer expert with over two decades of experience studying franchise systems, I‘ve long been fascinated by Chick-fil-A‘s approach. In this deep dive, I‘ll share my insights on what makes the Chick-fil-A franchise model so special, and why it has been a key driver of the company‘s remarkable growth and success.
A Closer Look at the Numbers
First, let‘s set the stage with some key facts and figures. Chick-fil-A is the third-largest fast food chain in the United States by sales, with over 2,600 locations across 47 states, Washington D.C., and Canada. In 2020, the company generated $4.3 billion in systemwide sales, despite being closed on Sundays – a policy rooted in founder Truett Cathy‘s Christian faith.
While that topline number is impressive on its own, what‘s even more remarkable is how Chick-fil-A achieves it. The company‘s average unit volume (AUV) – a key metric measuring sales per restaurant – is $4.2 million, more than three times the fast food industry average of $1.2 million. In fact, Chick-fil-A‘s AUV is higher than any other fast food chain, including McDonald‘s ($2.9 million), Burger King ($1.4 million), and KFC ($1.2 million).
| Chain | 2020 Systemwide Sales (Billions) | Locations | Average Unit Volume (Millions) |
|---|---|---|---|
| Chick-fil-A | $4.3 | 2,600 | $4.2 |
| McDonald‘s | $93.3 | 39,020 | $2.9 |
| Burger King | $10.0 | 7,081 | $1.4 |
| KFC | $4.7 | 3,946 | $1.2 |
Source: Technomic Top 500 Chain Restaurant Report (2021)
So how does Chick-fil-A generate such high volumes with a relatively small footprint? The answer lies in its unique franchise model, which prioritizes quality over quantity and empowers operators to build best-in-class restaurants.
The Chick-fil-A Way
Unlike most fast food chains, Chick-fil-A does not sell territorial rights or multi-unit development deals to franchisees. Instead, it selects individual owner-operators for each restaurant through a highly competitive application process. These operators pay an initial franchise fee of just $10,000 – a tiny fraction of the hundreds of thousands or even millions required by most major chains.
In exchange for this low upfront investment, Chick-fil-A franchisees enter into a unique partnership arrangement with the company. The franchisor covers all startup costs – including real estate, construction, and equipment – and rents the restaurant to the operator for 15% of sales. Operators then keep 50% of pre-tax profits, with the remainder going back to Chick-fil-A corporate.
This model has several key advantages for both franchisees and the franchisor. For operators, it lowers the barrier to entry and allows them to launch a turnkey business with minimal personal financial risk. Chick-fil-A‘s rigorous selection process and hands-on training program also set franchisees up for success by ensuring they have the skills and mindset to thrive in the company‘s high-performance culture.
For Chick-fil-A corporate, the model provides maximum control over real estate selection, restaurant design, and brand standards. By maintaining ownership of properties and partnering with handpicked operators, the company can ensure consistent quality and customer experience across its entire system. This level of control is rare in the franchise world, and has been a key factor in Chick-fil-A‘s ability to scale rapidly while maintaining its renowned service and hospitality.
Franchisee Success Stories
Of course, a franchise model is only as good as the results it produces for franchisees. And on this front, Chick-fil-A‘s track record is second to none. The company boasts one of the highest franchisee satisfaction rates in the industry, with 92% saying they would recommend Chick-fil-A to others according to a 2020 survey by Franchise Business Review.
Much of this satisfaction stems from the strong unit economics and growth potential that Chick-fil-A franchisees enjoy. With average annual revenues of $4.2 million per restaurant, operators can generate significant income even after accounting for fees and profit-sharing. And because Chick-fil-A corporate provides ongoing support and resources – from marketing and technology to food safety and employee training – franchisees can focus on running great restaurants rather than getting bogged down in administrative tasks.
But for many Chick-fil-A franchisees, the rewards of the business go far beyond financial success. Take Jimmer Szatkowski, a Chick-fil-A operator in Bradenton, Florida. Szatkowski took over a struggling mall location in 2011 and quickly turned it around, generating double-digit sales growth and industry-leading customer satisfaction scores.
Even more impressive than the restaurant‘s performance, however, was the impact Szatkowski had on his team and community. He implemented a service scholarship program that provided over $450,000 in tuition assistance to his employees, and became a leader in the local Chamber of Commerce and nonprofit scene. In 2019, Szatkowski was recognized with Chick-fil-A‘s highest honor, the Symbol of Success award, for his embodiment of the company‘s values and commitment to serving others.
Szatkowski‘s story is just one of many examples of how Chick-fil-A franchisees are empowered to build thriving businesses while making a positive difference in the lives of their employees and communities. It‘s a testament to the power of the Chick-fil-A franchise model, which attracts high-caliber owner-operators and gives them the tools and resources to achieve remarkable results.
An Unmatched Support System
Behind every successful Chick-fil-A franchisee is a robust support infrastructure that ensures consistent quality, service, and profitability across the system. The company provides comprehensive training and ongoing professional development for operators and their teams, covering everything from food safety and guest service to leadership and business management.
New franchisees go through a multi-week onboarding program that includes classroom instruction, hands-on practice in a training restaurant, and mentorship from experienced operators. They also receive ongoing support from a dedicated Franchise Business Consultant who provides coaching, conducts regular evaluations, and helps with problem-solving and goal-setting.
In addition to training and consulting, Chick-fil-A offers a suite of tools and resources to help franchisees run efficient, profitable restaurants. The company‘s proprietary point-of-sale system and back-office software provide real-time data on sales, labor, food costs, and other key metrics, allowing operators to make informed decisions and optimize their business.
Chick-fil-A also leverages its scale to provide franchisees with competitive advantages in purchasing and supply chain management. The company‘s Supply Chain Cooperative buys ingredients and packaging in bulk, securing high-quality products at low prices for operators. And because Chick-fil-A has a limited menu and tight control over product specifications, it can drive efficiencies and consistency across the entire system.
Perhaps most unique to Chick-fil-A‘s franchise support model is its commitment to operator personal development. The company offers extensive leadership training programs, executive coaching, and peer networking opportunities to help franchisees grow as leaders and individuals. It also fosters a strong culture of service and giving back, with many operators serving on local boards, leading community initiatives, and mentoring at-risk youth.
This holistic approach to franchisee support not only drives business results, but also creates a sense of purpose and fulfillment for operators. As Chick-fil-A CEO Dan Cathy puts it: "Our goal is not just to be the best in the world, but the best for the world. That starts with our franchisees, who are the heart and soul of Chick-fil-A."
Innovation and Future Growth
As Chick-fil-A looks to the future, innovation and technology will play an increasingly important role in its franchise model. The company has been investing heavily in digital ordering, delivery, and drive-thru enhancements to improve speed, convenience, and accuracy for guests. It is also testing new restaurant designs and service models, such as ghost kitchens and mobile-only locations, to reach more customers in more places.
For franchisees, these innovations bring both opportunities and challenges. On the one hand, they provide new revenue streams and ways to grow the business. Digital ordering and delivery have been a lifeline for many restaurants during the pandemic, and are likely to remain popular options even as dining rooms reopen. Likewise, smaller-format locations could help Chick-fil-A expand into dense urban markets and non-traditional venues like airports and universities.
At the same time, new technologies and service models may require additional training, support, and investment from franchisees. Integrating digital systems with in-restaurant operations can be complex, and may strain staffing and workflows. And as Chick-fil-A expands into new markets and formats, it will be important to maintain the brand standards and customer experience that have been core to its success.
Fortunately, Chick-fil-A‘s franchise model is well-suited to navigate these challenges. The company‘s tight control over operations and its collaborative partnership with franchisees allow it to roll out changes in a coordinated, systematic way. And its focus on operator training and support ensures that franchisees have the skills and resources they need to adapt and thrive in a changing market.
As David Farmer, Chick-fil-A‘s VP of Restaurant Experience, explains: "Our franchisees are our secret sauce. They bring the Chick-fil-A brand to life in their communities, and they are the ones who will lead us into the future. Our job is to support them, equip them, and empower them to succeed no matter what challenges come our way."
Conclusion
In conclusion, the Chick-fil-A franchise model is a rare breed in the fast food industry. By combining a highly selective operator recruitment process, a unique partnership structure, and a robust support infrastructure, the company has built a system that empowers franchisees to achieve remarkable results.
Chick-fil-A‘s success is a testament to the power of prioritizing quality over quantity, investing in people and relationships, and staying true to core values. It‘s a model that has not only driven impressive financial returns, but also created opportunities for franchisees to build fulfilling businesses and make a positive impact in their communities.
As the company continues to grow and evolve, it will undoubtedly face new challenges and opportunities. But with its strong foundation and its commitment to franchisee success, I believe Chick-fil-A is well-positioned to thrive in the years ahead.
For aspiring entrepreneurs and industry leaders alike, the Chick-fil-A story offers valuable lessons on what it takes to build a truly exceptional franchise system. It‘s not just about the chicken sandwiches – it‘s about the people, the purpose, and the unwavering dedication to excellence that permeates every level of the organization.
As a long-time admirer of Chick-fil-A, I‘ll be watching with interest to see how the company‘s franchise model evolves and adapts in the coming years. One thing is for sure: With a system built on empowerment, service, and shared success, Chick-fil-A is poised to continue defying convention and setting the standard for fast food franchising.
