The unconventional model behind Chick-Fil-A's success, the economics of Chick-fil-A. Are
you super interested in Chick-fil-A and how they make so much money. As an entrepreneur
and someone that studies business, Chick-fil-A and their franchise model is absolutely mind
boggling. There's so much you can learn about it. There's so many hidden things
that they do that is so different and they have weathered some crazy storms that I'm
going to tell you about in this video, and we're going to decipher how to steal
all of the good things that Chick-fil-A does so that we can do it too. Let's go.
We're going to do a deep dive into Chick-fil-A, this privately owned company where you cannot
buy stocks or it is not publicly traded. I'm going to share with you all of their secrets
on why they are still privately held and how to accomplish that for yourself. We're going to take
a serious look at the Chick-fil-A franchise model and their success and why their franchises
are more profitable than McDonald's and last but not least, I'm going to share with you the secret
sauce to their success that any entrepreneur can do in their business. There are so many amazing
things about Chick-fil-A. So did you know that all of Chick-fil-A's restaurants are owned by
Chick-fil-A, meaning that people that buy into the franchise are what we called operators. They
are not actually franchise owners per se, because corporate Chick-fil-A owns all of the franchises.
Literally, they put all of the restaurants together, they design all of the restaurants,
they decide where they're going to be, and the people that buy into the franchise are really
just working for the company as operators. Now, they are definitely considered owner operators,
but they are expected to work in the business and really be operators and not just be franchise
owners like a lot of other companies. Usually when it comes to franchises, people that are wealthy
have money they will buy into the franchise. This is a great way for the company like Chick-fil-A
to raise money to open new stores. It's through their franchisees that they get the money to open
new stores, but Chick-fil-a's model is so much different. They do not let any of the owners
actually own the restaurants. They own all of them and they keep a tight control on a lot of things.
So let's get into that part. Chick-fil-A has a very rigorous interview process for all of their
owner operators. Like I mentioned before, usually if you are a company, you say, I want to franchise
my company. Okay, you are actually looking for investors. So when you sell a franchise,
you are actually having an investor give you money and they're going to own that restaurant.
It's a great cash flow or influx of cash to the corporate company because the owner operator
will pay you a franchise fee and they will also pay you royalties, meaning they will send you a
portion of their profits every single month or every single year. That is the franchise model,
and it's very lucrative for both parties because you have already, as the corporation created a
brand that is well known. You usually have commercials, billboards, and people will just
go into those restaurants or your business because of what you've established. This is
amazing for someone that wants to be a franchisee, an owner, because they get your brand recognition,
they get your systems, your softwares, your way of doing things, and they really just get a turnkey
business that they can just plug and play. They can just get your business and go. So it's been
a very amazing thing in the US system where franchises have become a great way to get a
business. You literally can just buy a business in a box. If someone buys a McDonald's, they get that
entire business almost because they don't have to create how they're going to come up with a menu or
what the prices should be or what the restaurant should look like. They really get all of that
from the corporation. So it's an amazing system for both parties, but Chick-fil-A has completely
flipped this franchise model on its head, and we're going to talk about that right now. Whoa,
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back to this video. So Chick-fil-A has completely flipped the franchise model on its head. Because
the owner of Chick-fil-A is a very devout Christian. He has put into this business a
lot of what he wants and his values into that business and into the owner operators and the
interview process. Basically, if you are not a Christian person or someone that kind of follows
a lot of the different teachings and values that the owners of Chick-fil-A have set forth,
they usually do not approve those people as an owner operator. It is such a company that
is built on family values and religious values, although they do not specify that you have to be
of a certain faith or a certain religion in order to have a Chick-fil-A franchise, they do make
it very clear that it is a part of the interview process and that there is like a moral code and a
value system to the people that they are choosing to be owner operators. Additionally, as you may
already know, chick-fil-A is closed on Sundays because the owners value their Christian beliefs.
They close on Sunday and the restaurant gives everyone a chance to all of their employees,
their staff to go to church, and that's really what the company's owners would like for all of
us to do on Sunday. So that's why we're not getting Chick-fil-A that is very different
because in most cases as a restaurant, you want to be open every day, especially on
the weekends. Saturday and Sunday are the weekends, and that's when most restaurants,
especially fast food restaurants get a ton of their business. However, this has not affected
Chick-Fil-A's bottom line in any way, shape or form, and I'm going to share with you some other
things they do to really boost their profits. Number one, Chick-Fil-A has a very simple menu,
and this is a lesson that any entrepreneur can learn and use in their business. The reason why
they keep a very simple menu so that they are efficient, they know that they have, let's say,
lower skilled workers in their restaurant. They don't have people with MBAs and quantum physics
degrees and things like that. Usually it's a lot of lower skilled workers, again, really polite,
great people, but not a high skill set like rocket engineers. You get what I mean? So
the processes that they set up are very simple so that they are efficient, meaning that they
can plug and play low-skilled workers, and it can still get the same result. This way,
you can have people in your business that don't have high degrees. Think of it, for example,
in my business, I'm able to hire a lot of virtual assistance from the Philippines, for example,
and many of them only get paid three or four or $5 US. Now, that may not be a lot in US dollars,
but it's a lot in Philippines. Additionally, for some of the things that I have them doing,
I don't need someone with a college degree or a master's degree. Maybe I just have them answering
the phones or sending emails, and so I can spend less money on that if I keep my processes simple,
meaning I have to create templates for my employees. I need to give them scripts that
they can follow. If I make a simple process, I can plug in low skilled employees and still get a very
efficient result. So that is amazing lesson that you can learn from Chick-fil-A. They keep a very
simple menu. They don't have a lot of fluff, and they are able to use low skilled workers and have
a very efficient process. Now, let's keep going because again, major lessons about Chick-fil-A.
Number two, slower service, but better service. This is amazing lesson that you can learn from
Chick-Fil-A. You do not have to be the fastest and get everything done the fastest in order to
be competitive. They are competitive because they have better service. Now, statistically speaking,
you would think that Chick-Fil-A's drive through lines because we see all those people out there
with tablets and things like that, that they are so much faster, but the truth of the matter is
it actually takes you longer to get through the Chick-Fil-A drive-through that almost every other
fast food. However, it's a better experience, okay? Think about that for example, you have
someone at the car talking to you, being very friendly and polite, so you don't even realize
that it took you longer to get through that line, and that is how they have created a competitive
advantage. They have not tried to be the fastest. They actually know that they are not the fastest,
and that is not why they are bringing the people out there with the tablets. Yes, it does help to
speed them up, but the major reason why they do that is for better customer service. Think about
that. The process to become an owner operator, the process that Chick-Fil-A uses to find their
owner operators is so much different than Dunkin' Donuts, McDonald's, burger King, and so many of
the other nationally known restaurant franchises like Chick-fil-A is so different. Literally,
Chick-Fil-A gets over 8,000 applications per year to become an owner operator, and they only approve
about 130 applications per year. So let's think about that for a second. Those acceptance rates
are actually lower than Stanford and Harvard, meaning you have a better chance of getting
into Stanford than you do of owning a Chick-fil-A franchise. Is that not mind blowing? As someone
that went to good schools but did not go to an Ivy League school? Did not go to Stanford? I can
tell you it is really difficult to get into those schools and to think that to own a Chick-fil-A,
even if I have millions of dollars right now, I probably would not get one is really just mind
blowing. So let's think about that for a second. Chick-fil-A has been very deliberate on who they
want to own their franchises and how they want their franchises to be run. They've spent many,
many years transforming and changing their interview process to get the exact people that
they want that fit their belief system and their work ethic, and the whole nine to run
their franchises and doing so has created a system where Chick-Fil-A's just do not fail. Basically,
they make more money than a McDonald's on average. I'm literally going to show you a graph right here
where the average Chick-Fil-A is making about 5 million, and you can see that McDonald's is
only at about $2 million. Additionally, it only costs $10,000 to get a Chick-Fil-A franchise. Yes,
their franchise fee is only $10,000 and it has been sold for many, many years. McDonald's
franchise fees, on the other hand, are closer to $1.3 million. Yes, okay, so not only do you have
to pay them a franchise fee of nearly a hundred thousand dollars, they have royalty and they have
investment asset requirements, meaning if I want to McDonald's, I have to show them I have at least
a million, sometimes 2 million, 5 million, depends on the market that you're in. I have to prove to
you that I have millions of dollars in assets before you consider it. Yet for a Chick-fil-A
franchise, that is not as important. They want to know that you will run the business the way that
they want it run and stick to their values. That's what's important to them. Whoa, so now we're to
our last point, and this is the point that makes Chick-Fil-A so different. Let's talk about the
controversy. Chick-fil-A has come under fire from the LGBTQ community, obviously bisexual,
transgender gays like that whole community because they have invested their money in a lot of their
foundations to anti-gay type of organizations. They've actually been known to give money to
groups that talk about gay conversion, meaning if you're gay, you can go to church and kind of
pray it away. Just some super controversial stuff that I do not agree with. I'm going to be really
honest with you guys. I'm going to tell you my opinion. Noelle does not agree with those things,
however, you get to decide what it is that you do in your business, and so the big lesson here,
if you're watching me right now, you get to be an entrepreneur, and that's the big
lesson that you get to take. Your business does get to have your values in it. Now,
do we have to agree with everyone's values or support their companies or their businesses,
or even admire what they're doing in their business, but not admire some of the things that
they've done with the profits? That's okay. The big lessons for any entrepreneur though is to know
that you get to create your own ways and you can learn a lot from the Chick-fil-A franchise model.
There's much to be learned from how they are doing things. There's some very successful things that
they do in their business that I absolutely think that you should do too. However, there's certain
things that they get involved with that I do not think should be pushed upon the major community,
but this is a great conversation. Again, comment below and let me know what you think about the
Chick-Fil-A franchise model. Let's talk about it, and more importantly, don't forget to get your
North One Business Checking account. All right? Just before we head out of here, do not forget
to click the link below and get your business checking account from North One Banking. It is an
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Use my Noelle link. All right. I just want to make sure that you have all of the resources, all of
the tools, and all of the knowledge that you need to be successful. This is Noelle, to your success.