Chick-fil-A’s BRILLIANT Business Model

Summary

• Chick-fil-A's model is unique because it owns the land, building, and business, which gives them significant control over operations.

• They partner with operators, similar to franchisees, but with more control since Chick-fil-A can terminate these partnerships. Operators need to invest only $10,000 to start.

• Each year, 10,000 applications are reviewed, but only about 100 spots are available, reflecting the selective nature of their process. Applicants need 3-5 years of experience at Chick-fil-A to qualify.

• The average Chick-fil-A location generates over $4 million in sales, with better margins than other franchises.

• Chick-fil-A earns more by leasing locations to operators and taking 15% off the top line in food sales, plus a 50/50 split of profits with operators.

• On average, operators make about $200,000 annually, while Chick-fil-A as a corporation earns approximately $900,000 per location from top-line cuts and profit sharing, not including real estate gains.

• Chick-fil-A's success is attributed to a slow and steady growth strategy that has made them unbeatable in their market.

Video

How To Take Action

I would suggest implementing a strategic system that maximizes control and efficiency, drawing inspiration from Chick-fil-A. Own as much of your business infrastructure as possible. If you're just starting, this might be challenging, but aim to at least control critical aspects of your operations to remain adaptable and resilient.

Partner with others strategically. Chick-fil-A’s model of partnering with operators after a thorough vetting process can be mirrored by building strong, well-vetted partnerships or teams. Select partners who align with your values and long-term vision, ensuring a consistent approach to business operations.

Consider low-cost, high-impact improvements. Like Chick-fil-A’s practice of rigorous selection, apply strict criteria when selecting employees or partners. Even if you're not reviewing thousands of applications, be selective and deliberate about who joins your team to ensure high performance and alignment with your business goals.

Aim for high efficiency and margins in your operations. Study your business processes and look for areas where you can streamline or reduce costs while maintaining quality. Invest time into understanding what your top performers are doing well and replicate those methods wherever feasible.

Adopt a slow and steady growth mindset. Be patient and deliberate in your expansion plans. Just as Chick-fil-A's success stems from its controlled growth, focus on sustainable, smart growth rather than rapid, unfocused expansion. Building consistently high quality and strong customer relations over time can create a loyal customer base, leading to long-term success.

Full Transcript

well Chick-fil-A is a amazing model because Chick-fil-A owns the dirt the building and they own the business and so then they partner with what they call operators like they're franchises but they're not franchises because they can fire you and all you have to do is put $10,000 in and they pick out of like 10,000 applicants a year for like a 100 spots it's a 2-year vetting process you have to have already worked at a chickf for like 3 to 5 years in order to be qualified for it the sales I think it's it's over 4 million per location I think it's 4.8 here's what's even crazier they have better margins than any other franchise and so since they own the dirt and the land in the building the business pays them back right cuz they lease it and then corporate gets a 15% rip on Top Line in food and then they split 50/50 The Profit with the operator after they took off all the Top Line the average operator makes $200,000 a year but they're making 15% on that and then half of the excess profit 700,000 a year off Top Line and then the other two so they're making like 900,000 a year per location not including the mortgage the appreciation on the building everything Chick-fil-A did the slow and steady and now they're unbeatable