#Franchises

Expand your business by finding owners, not investors

Chick-fil-A reinvented the fast food franchise model by focusing on finding fully committed owners, which they call Operators, who will be present every day to maintain high quality standards. But to do find the best people, Chick-fil-A first removed the need for any large upfront costs on the Operator's part. This allowed Chick-fil-A to select new owners based on character and values, rather than the size of their wallets.

The Operator's Agreement for Chick-fil-A works like this:

• The Operator makes an initial low and fully refundable investment of $10,000.
• Chick-fil-A supplies the Operator with everything that is needed. They select the location, build the restaurant, and purchase the equipment.
• The Operator is committed to a single store and is not allowed to have other businesses on the side.
• The Operator pays Chick-fil-A 15% of gross sales, plus 50% of net profits.
• Everything else is left up to the Operator. He or she is now the CEO, manager, president, and treasurer of the business and is in charge of all operations.

Out of 20,000 applications submitted each year, Chick-fil-A selects only .4%. Their high standards come from a desire to make each relationship last for life, and with less than a 5% turnover rate, in an industry where 30-40% is common, they are succeeding.

Say no to franchises in order to stay more connected with your customers

Although franchising is a quick and easy way to raise capital, "Schultz viewed franchisees as middlemen standing between Starbucks and its customers."