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FDD Talk 2016: The Chili’s Grill & Bar Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on December 5, 2016

in Casual-Dining Restaurant Franchise, FDD Talk 2017: Food Franchises, Franchise Earnings



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Chili's Restaurant Photo by carlossalinas

In this FDD Talk 2016 post, you’ll learn the following:

  • Section I – Background information on the Chili’s Grill & Bar franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Chili’s Grill & Bar franchise, based on Item 7 of the company’s 2016 FDD
  • Section III – Presentation and analysis of Chili’s Grill & Bar’s financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:
  • average sales, gross profit, total operating expenses, total non-controllable expenses, restaurant contribution, depreciation, and EBITDA for the 12-month period ended June 29, 2016 of the 805 company-operated Chili’s Restaurants that were open for at least 30 months before June 29, 2016

Section I – Background Information

Larry Lavine was the man behind the vision of Chili’s Grill & Bar. He basically just wanted to create a casual full-service, sit-down dining concept where friends and family could hang out and enjoy the flavors of Tex-Mex style food.

The first location was in Dallas, TX where Lavine converted an old post office on Greenville Avenue in the Vickery Meadows area. By the early 1980s, there were nearly 30 locations and Lavine sold the company to Norman Brinker. It is now owned and operated by Brinker International, which also owns the Maggiano’s Little Italy chain.

Headquartered in Dallas with more than 1,600 locations in 32 different countries (of which more than 800 are company-owned), here’s how Chili’s keeps serving more than a million people each and every day:

Lunch Combos

Chili’s offers 15 different lunch combos for only $6, $7, or $8 that include the choice of soup or salad. Lunch combos include Grilled Chicken or Pork Fajitas, Bacon Avocado Chicken Sandwich, Lunch Double Burger, Ranchero Chicken Top Shelf Tacos, Pork Carnitas Tacos, Smoked Chicken Quesadillas, Classic Turkey Toasted Sandwich, Big Mouth Bites (mini burgers), Bacon Ranch Chicken Quesadillas, California Turkey Club Toasted Sandwich, and more.

The Broader Menu

The big-picture menu at Chili’s features a number of categories, including Appetizers, Salads/Soups/Chili, Sandwiches and Handhelds, Craft Burgers, Fajitas and Enchiladas, Fresh Mex Bowls, Burritos, Tacos and Quesadillas, Ribs and Steaks, Chicken and Seafood, Lighter Choices, Sides, and Desserts. There’s really something for everyone.

St. Jude’s Commitment

Since 2004, Chili’s has been a go-to fundraiser for the St. Jude Children’s Research Hospital. This year Chili’s made a six-year $30 million commitment to St. Jude.

Chili’s raises the funds in part from a number of efforts: The Create-A-Pepper campaign in which customers and their children make a donation to the effort and then receive a pepper coloring sheet to decorate a pepper and share it on social media; adding a donation to their check using the tabletop tablet on every restaurant table; purchasing a Create-A-Pepper T-shirt, koozie, or crazy straw (a percentage goes to St. Jude); or eating at a Chili’s on St. Jude’s Day, which is September 21.

Veterans Day Incident

Some people believe there’s no such thing as “bad” publicity, but Chili’s might not agree with that sentiment. The chain provides free meals to veterans on Veterans Day each year, but the manager of the Cedar Hill, TX location took away veteran Ernest Walker’s meal after at least one customer questioned whether or not Walker was a true veteran (he is).

Kelli Valade, President of Chili’s Grill & Bar, issued a formal apology three days after the incident.

Chili’s Delivery Service

Very few full-service sit-down chains do delivery, and although Chili’s is bucking that trend, it’s only for large orders. The minimum order that qualifies for delivery at Chili’s is $125, so it’s clearly geared towards large groups.

They’re keeping costs under control this way, and also by not contracting with third-party delivery services – employees are using their own vehicles to make deliveries.

Section II – Estimated Costs

  • Please click here for detailed estimates of Chili’s Grill & Bar franchise costs, based on Item 7 of the company’s 2016 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2016 FDD) and Analysis



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