- For KFC, the cost of opening a franchise is $2M dollars, but you get to keep a 95% of your sales.
- For Chick-fil-a, the cost of opening a franchise is only $10K (Chick-fil-a buys the land and equipment), in exchange for 50% of revenue and only 15% of net profit.
Why the difference?
In lieu of wealthy investors, Chick-fil-a selects franchisees who are involved in their local communities. The company’s aim, says a spokesperson, is to find people who are willing to be “highly involved” in day-to-day operations. (While not a stated requirement, adhering to “Christian values” also doesn’t hurt an applicant’s chances).
“You run every aspect of the restaurant six days a week,” says Jeremiah Cillpam, a Chick-fil-a franchise owner in Los Angeles. In return for 60-hour work-weeks, an operator might take home 5-7% of revenue (around $150-$250k per year). ...
In essence, Chick-fil-a operators aren’t truly business owners — or even franchisees in the traditional sense.
“When people start a business, they want flexibility and real ownership,” says Kenny Rose, CEO of Semfia, a firm that educates people on franchise investing. “But as a Chick-fil-a franchisee, you’re basically just working a traditional management job.”