Why It's So Inexpensive To Open Your Own Chick-Fil-A Franchise

Drive-thru lines alone show that owning a fast food franchise can be super profitable. That being said, purchasing your own Wendy's, Taco Bell, Sonic, or KFC requires a serious financial commitment. Some fast food giants require franchise applicants to have a net worth of more than a million dollars before their application will even be considered (Wendy's requires that applicants have a net worth of $1 million to get started with only the application process). Many would-be restaurant franchisees shy away from this career move due to steep initial investment requirements.

Chick-fil-A, however, is different. The corporation allows franchisees to purchase and run one of their chicken franchises for just $10,000, and doesn't have a net worth requirement, meaning anyone who can cough up $10 grand can apply. But what's the difference between Chick-fil-A and other franchises that creates such a stark contrast in start-up fees? 

Chick-fil-A covers almost the entire cost of opening a new restaurant. In most other franchises, the franchisee is responsible for getting the restaurant up and running — using funds from their own pockets. For comparison's sake, it's rumored that it costs between $1.2 million and $3.5 million to open a Sonic. Opening a Wendy's can run franchise owners between $2 million and $3.5 million, and opening costs for a Jack in the Box restaurant can cost between $1.5 million and $3.3 million.

There are many things to consider when opening a Chick-fil-A, such as choosing a city where the restaurant is popular — like this U.S. state that has the most Chick-fil-A locations — or a destination where Chick-fil-A is not common but desired like in the U.K. Of course each city comes with its own costs, but this chain restaurant is one of the best options for first-time restaurateurs. With no minimum net worth requirement and covered opening costs, it makes sense why many people choose to franchise with Chick-fil-A.

However, while it's comparatively inexpensive to open your own Chick-fil-A, corporate takes a much larger percentage of your earnings than other franchise set-ups. All franchises require royalty fees — a percentage of net sales that's paid to corporate to cover the use of the business name, trademarks, etc. Chick-fil-A reportedly requires franchisees to pay 15% of their sales — and 50% of their net profits — back to corporate. In comparison, Wendy's requires franchisees to pay 5% of sales (as well as an additional percentage to cover advertising). 

In some ways, owning and operating a Chick-fil-A location has some commonalities with running a chain restaurant. Chick-fil-A owners are required to work full-time at their location, which is different from requirements for some other franchises (Dominos and Jersey Mike's, for example, allow semi-passive ownership). While long-term profit from owning a Chick-fil-A may be different than profits incurred from owning other franchises, the start-up costs of getting your foot in the door are much lower. This means that for many who want to own a restaurant, it's a no-brainer to get started with a Chick-fil-A.