The Chick fil A Franchise Model Is For The Birds

So the message here is to fully investigate ANY franchise opportunity, and go into it with eyes wide open. Make sure it is the right opportunity for you (as it is for these franchisees).

I’ve spent much of the last three decades in franchising accumulating several rewards and this year’s National Association of Entrepreneurship’s NAE 250 award. I’ve done consulting work and training for thousands of businesses, brokers and/or franchisors and now also do franchise brokerage (I don’t represent Chick-Fil-A). Joel’s facts are correct…. there are some other opportunities that provide you real ownership (you never own a franchise – you have a license to use their brand, system, etc.)… but I don’t offer any for $5000. Joel is also correct that owning a Chick-Fil-A doesn’t have many of the advantages that other franchise concepts have… and to that degree, one can argue that they shouldn’t be considered a franchise… but is it a bad deal? Depends on what YOUR desires are.

For some this is a GREAT opportunity… VERY low investment, the opportunity to generate a six figure income, not work on Sundays (don’t underestimate this – this is often a KEY reason people who want to own a food franchise choose this concept), often work close to home, exceptionally high consumer satisfaction, repeat business, loyalty, and you have very good chance of success and stable long term income – sad to say, that’s not the case in the J-O-B environment – Those attibutes and others DO MAKE this a good opportunity for many (but not all)… maybe not the best, but FAR from the worst.

For the true entrepreneur, this may not be the best fit… but for the guy with a good work ethic, ability to manage an organization primarily consisting of young people, doesn’t want to make a large investment or risk their home, and simply likes the culture of the company… this is a viable option. There are a lot of displace executives that are losing over $10,000 a month that would be willing to invest a $5,000, $10,000 or more to get back a six figure income…. and RIGHT NOW… these Chick-Fil-A franchisees are VERY happy campers!!!!

I have to say I agree with your article completely. The Chick fil A franchise model is in no way a franchise at all. The reality of the situation is that Dan Cathy is a businessman and a smart one at that. He has figured out how to attract talented people and lock them into a “management” position by giving them an ownership title. After doing extensive research into their franchise agreements I discovered the following. First off they will only allow the “owner” to operate as a sole proprietor, they will not allow you to do business as an LLC. So now you will be exposing all of your personal assets including your home, personal bank account, vehicles and juniors college fund. So let’s say you own a successful location and do 3 million a year. A very well run business will end up with a net profit of about 20% or 600,000 So first we will subtract 15% of the gross sales for the franchise fee of 450,000 which leaves us with 150,000 then divide that in half for the rest of thier cut, which leaves the “owners” share at 75,000 not a bad living. Oh wait I forgot about old uncle Sam, as a sole proprietor the IRS does not differentiate between you and your business so guess what you are left with a huge tax liability. There is a reason they only guarantee 30,000 per year because they know you won’t be making much more than that. Oh and I forgot, expect to be putting in about 80 hours a week at a minimum to do even this well.

Thank you for your article!!! Everyone needs to know this corporation is holding the “gold cow” hostage. As a close friend of mine lost his chic fil a he had built for 20 years– over a unfounded lie. Many others have had their chic fil as taken away from them. I heard one guy had his business taken because he refused to honor an expired coupon! STAY FAR AWAY from this not christian company –they are evil.