Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Chick fil A Franchise Costs (2013 FDD)

by Franchise Chatter on January 12, 2014

in Chicken Franchises,Franchise Costs,Sandwich Franchise



Franchise Chatter Membership Information

Detailed Estimates of Chick fil A Franchise Costs Based on Item 7 (Estimated Initial Investment) of Chick fil A’s 2013 Franchise Disclosure Document

Chick fil A Franchise

  • Chick fil A’s principal business is the development of a chain of retail quick-service restaurants specializing in a boneless breast of chicken sandwich. Most of these restaurants are operated by franchised operators who are independent contractors.
  • Chick fil A also operates various Chick fil A and other restaurants itself from time to time and may do so in the future through its affiliates and subsidiaries.
  • Chick-fil-A Sandwich Photo by roboppyChick fil A also licenses and continues to offer licenses to prospective Chick fil A licensees from time to time who have access to locations such as schools, workplaces, universities, airports, hospitals, and other similar locations to sell Chick fil A brand products at such locations. Chick fil A offers its licenses under a separate Disclosure Document.
  • Chick fil A Restaurants are established in free-standing locations as well as in non-free-standing locations, including mall and in-line units, non-traditional locations (“satellite units”) and locations which are drive thru only.
  • Mall units are generally located in shopping malls and shopping centers.
  • In-line units are generally located in shopping centers, office buildings, and downtown areas.
  • Satellite units are generally located in office buildings, big box stores, and downtown areas, and may feature and serve only a limited number of menu items and may be (but are not necessarily) established in connection with an existing Chick fil A Restaurant.
  • Although Chick fil A and its franchised operators market Chick fil A brand products broadly, the franchisor finds that the typical Chick fil A customer is in the 18-44 age group.

Chick fil A Franchise Costs

Estimate of Initial Investment

1.  Initial Fee:  $5,000

  • Once you have paid the $5,000 of working capital, if you are offered the opportunity to operate an additional franchised Chick fil A Restaurant business, no additional initial fee payment is required unless, at Chick fil A’s election, you are required to execute a new, separate then-current form of Operator Agreement for such additional franchised Chick fil A Restaurant business.
  • Although the $5,000 working capital listed above is the only initial out-of-pocket investment you will be required to make, the following expenditures will reduce the actual profits of your franchised Chick fil A Restaurant business and will affect the amount of your income.

Estimate of Additional Expenditures

  • The following chart describes the costs of initial investment for a free-standing unit, mall unit, satellite unit, and drive-thru only unit.
  • These amounts are deducted from the Gross Receipts of your franchised Chick fil A Restaurant business as expenses.

1.  Opening Inventory:  $16,000 to $81,000

2.  First Month’s Rental of Equipment:  $750

3.  First Month’s Lease/Sublease of Premises:  $1,900 to $36,200

  • This amount depends on where your franchised Chick fil A Restaurant business will be located, the size of the premises, and other factors.

4.  Additional Funds:  $137,000 to $1,076,000

  • This amount reflects the costs you can expect to pay in your first three months of operation and includes your expenses, as well as the cost of repairs, maintenance, and utilities, but does not include your draw.
  • In formulating these figures, Chick fil A has relied on profit and loss statements of operator and Chick fil A operated Restaurants opened during the fiscal year ended December 31, 2012. The exact amount required for additional funds will vary from operation to operation and cannot be estimated with certainty for your franchised Chick fil A Restaurant business.

5.  Total Estimate of Additional Expenditures:  $155,835 to $1,198,500

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