The first Chick-fil-A restaurant opened in 1967 in Atlanta’s Greenbriar Mall. The menu offered just a few classics, including the now-famous chicken sandwich, which sold for $0.59.
Today, the chain employs 120,000 people in 2,300 restaurants across 47 states. It first opened its doors to New Yorkers in October 2015, at the corner of 6th Avenue and 37th street in midtown Manhattan. This fall, I spent a day on the job with the team there to see what what it was like.
The owner and operator of this location, Oscar Fittipaldi, ran a Philadelphia-based Chick-fil-A for five years before being selected to open the first Manhattan-based franchise. He’s no longer affiliated with the Philly location, as Chick-fil-A prohibits most franchisees from opening multiple restaurants.
Landing the gig was no easy task: Chick-fil-A receives about 60,000 franchise inquiries per year, the company tells CNBC Make It and, of those applicants, only 75 to 80 are selected to open new locations. That’s an acceptance rate of less than 1 percent.
“I don’t have a specific formula [for] why people are selected to become franchisees,” says Fittipaldi, who spent 21 years as a merchant marine and ship captain before changing careers. “But one of the things that I would look [for] typically is: character, chemistry and competency.
“We need to make sure that the Chick-fil-A franchisees, when they come to the organization, they have a perfect chemistry with our brand.”
You don’t need experience working at Chick-fil-A to be selected — or even in fast food, the company website notes: “While some Chick-fil-A operators come from the restaurant industry, most have entirely different backgrounds. … There’s no cookie-cutter previous experience among our selected operators.”
Nor do you need much cash: Operators pay an initial fee of $10,000, a fraction of what it costs to open most fast-food chains. McDonald’s, for example, requires that franchisees have at least $750,000 in liquid assets, the Fiscal Times reports.
It’s significantly cheaper because Chick-fil-A pays for all start-up costs, like real estate and equipment, and then leases everything to its operators for an ongoing fee.
All operators have the same contractual agreement, the company tells Make It: Each month, the operator pays the company a percentage of gross sales for things like equipment and business services, plus a percentage of net profits as a franchise fee.
And operators don’t build equity in the business: Chick-fil-A owns every restaurant, meaning that operators can’t sell their location or pass it on to the next generation. Operators can’t open multiple locations, either. That’s arguably a key to the chain’s success: By limiting franchisees to one restaurant, the individuals can operate on a full-time, hands-on basis.
As Fittipaldi puts it, “We’re very unique in what we do. So the selection process is quite challenging for everyone.”
Source: Yahoo Finance UK