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It costs $10k to ‘own’ a Chick-fil-A franchise

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Re: It costs $10k to ‘own’ a Chick-fil-A franchise

#151

Post by projektfu »

reaperducer wrote: post #64
lettergram wrote: post #6

Earlier quoted context omitted.

I actually don’t see it that way. Often a franchise will vet the owner, provide setup assistance, provide location recommendations, train employees, etc. That doesn’t occur in all cases, but arguably most franchises do this and it’s part of the initial fees.

Plus, the national will often pick up all or a large portion of advertising costs.

In many franchise documents I've seen, those costs are shared by the franchises and charged out separately from the royalties. Same for IT expenses and the like.

Re: It costs $10k to ‘own’ a Chick-fil-A franchise

#152

Post by el_cujo »

>found that 51% of food franchisees earn less than $50k per year and only around 7% take in $250k

Unbelievable, owning a franchise seems pretty stressful just to be taking in 50k/year. I guess once you get it off the ground with good managers you don't have to baby it as much, but still.

Re: It costs $10k to ‘own’ a Chick-fil-A franchise

#153

Post by projektfu »

codegeek wrote: post #36
Nextgrid wrote: post #2

I always found franchise initial startup costs to be predatory, as they get paid either way regardless of whether the franchisee actually succeeds. In my opinion they should be abolished and franchisors should only rely on royalties, so that they have an incentive to help the franchisee succeed if they want to make money.

You are paying for the brand, strategy, training and lot of risk factors that are mitigated due to the franchise setup. Yes, it is still risky but starting an entire business from scratch is a lot riskier. That's why you pay.

The trouble is that the royalty adds to the risk. That, and you can't change suppliers if they start playing with you.

Independent restaurants, if they hit their market, run into the same problem with landlords, who want to take the profit from exorbitant rents after the the lease expires.

Re: It costs $10k to ‘own’ a Chick-fil-A franchise

#154

Post by projektfu »

Forge36 wrote: post #13
staticautomatic wrote: post #5

Earlier quoted context omitted.

Are you being facetious?

It's a valid question. State government? Local? Federal? International agreement? The franchise brand owner had no incentive, so while it's possible to abolish them through government. It's not clear why we'd go that direction. Given the franchise brand owner takes on additional risk it's not clear why they'd move to take on risk without gain

In the US, the SBA could go a long way to abolishing them if they so chose. "No more franchises in the 7A program. Have a nice day."

Re: It costs $10k to ‘own’ a Chick-fil-A franchise

#155

Post by ksherlock »

bronco21016 wrote: post #139
Reedx wrote: post #131

Earlier quoted context omitted.

Something I've been curious about that maybe you or others here have some insight on: Do you think they'd do even better if they were open 7 days/wk? Or is taking a day off one of the things contributing to their success?

I’m sure they would. On this point. They shouldn’t be allowed in certain locations in my opinion because of this policy. Certain airports are already limited on options for eating and then they close on Sunday. It turns the airport dining experience upside down and its incredibly frustrating.

The Atlanta Falcons (Mercedes-Benz Stadium) Chick-Fil-A turns into a "Fries Up" restaurant on Sundays.

Re: It costs $10k to ‘own’ a Chick-fil-A franchise

#156

Post by chiph »

CDSlice wrote: post #122
irrational wrote: post #83

Earlier quoted context omitted.

They opened up the first one near me in a Portland Oregon suburb. The place was packed whenever they were open with drive-thru cars spilling out into the street. I thought the madness would end after a few days/weeks, but it's been years and they still have a huge draw. I went in there once just to try it. It was good, but not the best thing I've ever had. I wonder if it is nostalgia from people from the SE USA that…

Chick-Fil-A's in the SE (or at least NC) are also packed to the brim whenever it is close to a meal time. Although they don't serve the best food in the world the customer service is excellent, the food is pretty good for fast food and it is consistent in matter which location you go to, and you can get your food much faster than other places despite the massive crowds.

The one at Park Rd Shopping Center in Charlotte is going to be rebuilt as a drive-thru only location at the (rather firm, supposedly) request of the city because it's such a traffic nightmare.

https://www.charlotteagenda.com/152719/chick-fil-a-woodlawn-...

Re: It costs $10k to ‘own’ a Chick-fil-A franchise

#157

Post by tenpies »

OatsAndHoney wrote: post #62
goldcd wrote: post #53

I have myriad issues with the personal ethics of the owners of Chick-fil-A - but their model does make sense to me. They're clearly not just wanting to sell their brand - they're wanting to own their brand. The 10k is just a token - It's maybe more than you have in your clearing account, but a figure that most people could likely produce and is just an indicator that "you're serious" Important part is that they put y…

They closed immediately after they opened in the U.K. https://www.nbcnews.com/feature/nbc-out/u-k-s-first-chick-fi...

> will close after its six-month lease expires

That's certainly not immediately. Also not by decision of CFA. The local landlord folded and decided not to renew the lease, so after the initial 6 months, that CFA location would have to close.

Re: It costs $10k to ‘own’ a Chick-fil-A franchise

#158

Post by rpiguy »

rukittenme wrote: post #142
cryptoz wrote: post #115

Earlier quoted context omitted.

Editing to remove accurate but aggressive words is a common piece of advice you hear on HN. I stand by original comment and my edit. > They help 23 million people a year, without any type of discrimination. This is false. > They have at least one dorm exclusively for transgender individuals. Their charity services literally benefit millions of LGBTQ individuals every year. Good acts do not undo bad acts. > But if you…

You gave yourself three chances to defend your position and each time you failed to attempt it. I understand two things about the Salvation Army. They serve the most vulnerable in their community(-ies) and they hold religious beliefs which run against the politics of the day. That second point may give you some sense of justification. But consider this, on the Salvation Army's website, one of their top line issues is…

Could not agree more.

Re: It costs $10k to ‘own’ a Chick-fil-A franchise

#159

Post by privateSFacct »

cryptoz wrote: post #143
rukittenme wrote: post #142

Earlier quoted context omitted.

You gave yourself three chances to defend your position and each time you failed to attempt it. I understand two things about the Salvation Army. They serve the most vulnerable in their community(-ies) and they hold religious beliefs which run against the politics of the day. That second point may give you some sense of justification. But consider this, on the Salvation Army's website, one of their top line issues is…

[flagged]

Cypto -

it might be helpful if you could spell out some of the specifics of their current violent attacks on LGBTQ folks. This would make your "corporate doublethink propaganda" claims stronger.

Re: It costs $10k to ‘own’ a Chick-fil-A franchise

#160

Post by privateSFacct »

jonas21 wrote: post #146
xwowsersx wrote: post #45

> At $4.2m per store, Chick-fil-A’s average revenue is the highest of any fast-food chain in America, dwarfing both direct competitors (KFC; $1.2m) and bigger brands (McDonald’s; $2.8m) Wow, I did not know this. Why is that?

Short answer: because both Chick-fil-A and McDonald's want it that way. Longer answer: McDonald's has chosen to optimize for total revenue, while Chick-fil-A has chosen to optimize for something more like ROI on each store. This is a direct consequence of the different franchise models, where McDonald's takes a cut of sales and doesn't have an ownership stake in each location, while Chick-fil-A take a cut of both sal…

Interesting some decades ago I think McDonald's did a study that led to something called the 4 minute McDonald's universe which was a distance they found people would go for spur of the moment purchasing. Obviously impractical, but this idea of optimizing for total revenue has been around for a bit I think.
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