Chick-fil-A
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Date Incorporation: 1967
Franchising Since: 1987
Headquarters: Atlanta, Georgia
Business Description: 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 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 (the "Licensed Sites") to sell Chick-fil-A brand products at such locations.
Franchise Offer: A Chick-fil-A Licensed Unit is a limited menu, quick-service restaurant with its primary product being a boneless breast of chicken sandwich known as a Chick-fil-A Chicken Sandwich. A Chick-fil-A Licensed Unit may or may not have a seating area. In addition to the Chick-fil-A® Chicken Sandwich, menu items at a Chick-fil-A Licensed Unit include Chick-fil-A Chargrilled Chicken Sandwich, Chick-fil-A Chargrilled Chicken Garden Salad, Chick-fil-A Nuggets, Chick-fil-A Waffle Potato Fries, freshly squeezed lemonade, and soft drinks (in some locations). Other optional menu items, including a variety of breakfast products, may be added upon Chick-fil-A's prior written approval. Chick-fil-A locations are required to be closed on Sundays and Christmas Day.
Financial Assistance: Neither Chick-fil-A, nor any affiliate of Chick-fil-A, either directly or indirectly, offers any financing arrangements to Licensees. Chick-fil-A does not receive any direct or indirect payments for placing financing, nor does Chick-fil-A guarantee the Licensee’s obligations to third parties. Chick-fil-A does not offer financing of equipment or offer expenditures that require the Licensee to waive notice, confess judgment or waive a defense against Chick-fil-A. Whether Licensees can obtain financing will depend on a variety of factors, including their own creditworthiness, the type of security they can offer, the policies of lending institutions, and the availability of commercial credit generally.
Training and Assistance: Licensee Operational Training is conducted at the Licensee’s assigned Operator Consultant's operating Chick-fil-A Restaurant, and generally lasts a minimum of one week. The actual location and length of the program varies from time to time. The program currently utilized by Chick-fil-A covers most aspects of operation, food preparation, labor scheduling, accounting, maintenance, purchasing, policies and certain other applicable topics. The training program must be completed to Chick-fil-A's satisfaction by at least two of the on-site, leadership level employees. Chick-fil-A intends, though is not obligated, to prepare and offer various seminars and conferences to Licensees from time to time in addition to its initial training program.
Territory: The Operator will be granted the right to operate one Chick-fil-A Licensed Unit at one specific Licensed Site location designated by Chick-fil-A. The Licensee will not receive an exclusive or protected territory, express or implied. The Licensee may face competition from other licensees or franchisees, from outlets that Chick-fil-A or affiliates own and/or operate, or from other channels of distribution or competitive brands that Chick-fil-A or affiliates control.
Term of Agreement and Renewal: The length of the initial term is to be determined by Chick-fil-A prior to the execution of the License Agreement based on a variety of factors including, without limitation, Chick-fil-A's assessment of the licensing opportunity, the nature of die Licensed Site, the extent of the Licensee’s ability and contractual right, if any, to operate the Licensed Unit at the Licensed Site for a defined or otherwise predictable period of time, and Chick-fil-A's past economic and operational experiences at similar licensed site locations. There is no right to extend or renew. In the exercise of its sole and exclusive business judgment, Chick-fil-A may decide, but is under no contractual obligation, to offer the Licensee a new license agreement to operate the Licensed Unit for an additional period of time beyond the expiration of the initial License Agreement.
Obligations and Restrictions: The License Agreement requires the Licensee at all times during the term of the License Agreement, and at the Licensee’s own cost, to use diligent efforts to advance the reputation of Chick-fil-A, and Chick-fil-A brand products and to develop and enhance consumer awareness of Chick-fil-A brand products and Chick-fil-A's proprietary marks. The Licensee must maintain at least two management-level employees at each Licensed Site whose duties include the Chick-fil-A Licensed Unit and who have attended, and completed to Chick-fil-A's satisfaction, Chick-fil-A's training program. Managers and supervisors of Chick-fil-A Licensed Units are required to enter into a confidentiality agreement. Chick-fil-A requires the Licensee to offer and sell only the Chick-fil-A brand products and other items that Chick-fil-A has approved.
Total Number of Units: Over 1,615 locations
Investment Tables:
Initial Investment:
| Name of Fee | Low | High |
|---|---|---|
| Opening Inventory/ Paper Supplies | $6,300 | $40,750 |
| Utensils and Other Small wares | $3,000 | $7,000 |
| Equipment/Signage | $40,000 | $125,000 |
| Build-out | $25,000 | $500,000 |
| Architectural Drawings | $2,000 | $20,000 |
| Additional Funds | $1,000 | $77,000 |
| Total Estimated Initial Investment | $80,200 | $770,300 |
Ongoing fees
| Type of Fee | Amount |
|---|---|
| License Fee | 10% of Gross Receipts |
| Additional Training | $500 per employee |
| Handling Fee | 7% of the purchase price for equipment and/or signage |
| Audit | Total amount of any underpayment plus 12% per annum interest |
| Indemnification | Will vary under the factual circumstances |
| 1 Additional Manual(s) | $500 |
| Late Payment Charge | 12% per annum interest on all amounts 30 days overdue |
Year of FDD: 2012
The above information has been compiled from the FDD of Chick-fil-A.
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