I always found franchise initial startup costs to be predatory, as they get paid either way regardless of whether the franchisee actually succeeds. In my opinion they should be abolished and franchisors should only rely on royalties, so that they have an incentive to help the franchisee succeed if they want to make money.
It's a valid question. State government? Local? Federal?
International agreement?
The franchise brand owner had no incentive, so while it's possible to abolish them through government. It's not clear why we'd go that direction. Given the franchise brand owner takes on additional risk it's not clear why they'd move to take on risk without gain
Given how much it costs to open the restaurant itself, it seems like the franchise fee (for most franchises) is an odd thing to focus on. If I'm going to be spending $1.6M-$2.3M just to build a Taco Bell location, I'm honestly not going to be too concerned about the $30k franchise fee I need to pay corporate up-front. It's a drop in the bucket.
Regardless, corporate is always incentivized to help their franchisees succeed; they wouldn't really have a business without them, and of course they want their cut of sales/profits to be a higher absolute value.
For Chik-fil-A, yes, since corporate fronts all the money and owns the location and improvements; there, you're maybe a little more than an employee-manager, but not by much. For most others, not so much, since you own the result of your initial investment.
I actually don’t see it that way. Often a franchise will vet the owner, provide setup assistance, provide location recommendations, train employees, etc. That doesn’t occur in all cases, but arguably most franchises do this and it’s part of the initial fees.
In many franchise documents I've seen, those costs are shared by the franchises and charged out separately from the royalties. Same for IT expenses and the like.
If you dont want to pay you join a different franchise or start your own restaurant. I fail to see the issue. Nobodys putting a gun to your head to open up a CFA restaurant.
A predatory option can be present with a choice to join it. People can choose to not take such a deal but those who did, they got the worse of the deal by large margins.
Even if they did choose that option, doesn't mean that deal was fair to them.
Yes. All it takes is a modestly good marketing strategy and legalese muddying the water enough to not make it completely obvious until it’s too late to back out or too complicated to advise to others.
I can't really follow your logic there. In my mind for something to be predatory it should be your pretty much only option while promising you the world, an end to your tough situation. If you have a choice and you end up worse off, you just got into a bad deal is all. The deal is fair because both parties thought it was a good deal, no one was forced or desperate. There was no scam involved either (everyone got what they were promised). I can't see how that can be predatory, or even unfair.
What about a used car salesman lying about the quality of the lemon they are selling someone? The target audience for a cheap used car may be desperate and not know a lot about cars. There may be multiple used car lot options around, that doesn't change the fact that many of them are predatory in their sales tactics.
Also Quiznos collapsed and was blamed for one franchisees eventual suicide due to their predatory tactics that locked franchise owners into paying high ingredient costs that they could not make a profit on.
Is it really predatory? For many owners of a Chick-Fil-A, the money is life-changing, and would take 3-5 other franchise restaurants to equal their level of income as a CFA operator.
How is it predatory? For $10k you get a complete Chick-fil-A restaurant, without having to pay for any of the building or start-up costs. Sure, that means corporate will take a much bigger cut of your sales/profits, but that seems fair, since they're taking on most of the risk. I mean... it's $10k. Tell me where else you can start a restaurant from scratch for only $10k and retain 50% of the profits? As someone who has invested in a (non-franchise) restaurant before, this is potentially pretty attractive, if you want to run a franchise.
Even for a more "traditional" franchise, where the franchisee is responsible for all the start-up costs, even $50k is small peanuts compared to the full cost to bring the restaurant up from scratch. Calling that "predatory" feels like a gross exaggeration.
I recall subway had "low" startup costs and it resulted in too many locations.
What incentivizes the new location to do due-diligence in picking a good location? If this is placed into the chain owner: What's the difference between a franchise vs single owner?
Chick-fil-A corporate determines all new locations. Corporate cares about the success of their locations because they own the lot, own the building, own the equipment, own just about everything and lease it back to the operator. If an operator violates the franchise agreement they get evicted and or lose their equipment and can no longer operate. It's how Chick-fil-a is able to maintain quality and control. Ever wonder why a Chick-fil-a location doesn't buck corporate and open on Sundays? Because they'd lose everything they need to run their business.
Opening a Subway franchise is a great way to ensure you'll always be employed -- at a 50+ hour per week job earning about $40k per year. The business model and royalty rate generally require the owner to be an unpaid, full-time employee for the store to turn a profit.
They have a brand image to uphold. If anybody were to be able to open up a franchise and run it badly (ie, have rats running around), this would have a serious negative image on the whole brand and would sway people away from eating at the same branded joints again, even though other joints are run by different people.
As such, it is necessary to vet the potential franchisee to ensure they're going to support and improve your brand image rather than damage it. Requiring a "deposit" as such is part of this, as the franchisee will need to at least recover the amount invested by providing good service.
And yet people choose to buy franchises rather than start their own independent shops. Proliferation of franchises indicates that this is mutually beneficial.
Also, bear in mind that the franchise's corporate brand reputationsuffers when a franchise fails, so there's inherently some risk sharing.
Not commenting on franchising, but I'd point out that, for example, loan sharks are "mutually beneficial" and exist across societies, but they can still be quite predatory.
It is a bit unfair to compare loan sharks to business models liek franchises. Loan sharks can lend you money for anything even if you want to go spend it on something useless that doesn't create any value. Starting a Franchise business creates value even if it may not be highly profitable for someone. I wouldn't call Franchise model predatory even though I am personally not a fan of it because I like complete freedom in starting/running a business. Personally, I wouldn't do franchise (I am too much of a free bird to be caged) but calling it predatory is too much.
>people choose to buy franchises rather than start their own independent shops //
[Agreeing] There are massive costs (relatively speaking) for an independent involved in just learning/optimising the supply chain. With a franchise you, presumably, can skip this which gives a huge head start.
Also if it's a brand chain then you have the benefit of brand level advertising (which works at a different psychological level to shop/activity/product advertising) which should be more efficient per "lead".
Sure - and franchises are actively marketed, by a commission sales force and any number of people who get a 'finders fee' should you happen to sign up through their channel. There is an active push to herd people into franchises.
They tend to target unemployed middle-aged managers, since that audience is often driven by ego to "be the boss" and has the disposable funds to pony up a large setup fee. I was aggressively targeted when I was laid off last year.
What they didn't know - until we got on the phone - is I'm the target prospect from hell. I certainly have the funds; however, I got them via two decades of finance and strategy work. Old habits die hard. Due Diligence? Don't mind if I do...
I was polite but I laid out my expectations in financial terms based on investments in businesses of similar size. Actual deals which I had managed. Made it clear I had the funds to deliver if they could meet my goals in writing.
When the axe finally fell, My boss walked my resume over to a sister company in the same private equity group. Had an offer within a few weeks. He gets maximum internet good guy points.
However, in the meantime, I wound up speaking with a diverse assortment of scum, villainy, and ineptitude.
There's nothing "predatory" about assuring that your business partner actually has enough capital to operate a business. The startup costs may be significantly lower for a freestanding restaurant but you also have to shoulder the burden of marketing and establishing a customer base. A national chain doesn't just sit on its ass and collect money from franchisees. The costs of marketing and R&D are enormous but in the franchise model these things are offloaded from the individual restaurant to the parent company.
The parent company has no interest in that location ever closing. They're not house flippers or day traders. They rely on stable long-term income, not random tiny spikes a few times a year. Franchise fees are barely even a blip on the radar of a company like McDonald's.
You are paying for the brand, strategy, training and lot of risk factors that are mitigated due to the franchise setup. Yes, it is still risky but starting an entire business from scratch is a lot riskier. That's why you pay.
The trouble is that the royalty adds to the risk. That, and you can't change suppliers if they start playing with you.
Independent restaurants, if they hit their market, run into the same problem with landlords, who want to take the profit from exorbitant rents after the the lease expires.
When you pay franchise costs you also get a lot of know how and ready built supply chain. Those things are probably worth it.
It is fried chicken after all - hardly a challenging item to cook, but to perfect it as a recipe, scale and process for "Nextgrid's artisan non franchised fried chicken" will take probably more than $10k and worse of all will take a lot of time in which you will be paying rent and salaries.
Chick fil a at least can be run pretty passively. I got to know an owner at a local franchise. He owned other franchises and gas stations, had a massive house in a gated community, and had time to lecture at a very good business school in town.
He had managers on every shift running day to day so he never really needed to visit the store, but he did a couple times a week anyway to show face with the staff and even step onto the line and bag orders if it got swamped while he was there, simply to lighten the load on the staff.
If this had been an independent restaurant, he might have been doing things like cooking in the back 12 hours a day to lower his payroll. Predatory is not the word I would use for most franchises these days; passive income is the word I would use.
Not sure if you are implying this is not such a great deal but that's what it sounded to me.
Maybe from the perspective of a tech person in silicon valley that's not great. But in comparison with pretty much any other job out there this is stellar.
He's also forgetting that a huge number of these are in "normal" America with much lower costs of living and no state income tax. That kind of money goes much farther there.
You can't really compare it to "any other job", since a franchise owner needs to front (or be able to raise via loans or investment) a cool million or two just to get started.
$150k-$250k/year is a fairly nice ROI for even $2M (though taking on loans or investment changes the math), but the calculation gets a little murkier when you factor in additionally needing to work 60 hours/week, six days/week to keep it coming in.
Put another way, if you already have access to $2M, $150k-$250k/year might not seem all that attractive when compared to what you've done prior to that.
As described in the article, Chick-fil-A (not the franchisee) covers all costs except for the $10k franchise fee, in exchange for a much higher share of revenue than competing restaurants. I'd hope that competitors' franchisees make more than $150k-$250k/year in exchange for their $2M upfront/borrowed + 60 hours/week.
Yes but at some point, if you have the right brains and vision, you can slowly replace yourself in the business, even if not completely. In a job no matter where, you stop working, your income goes to 0. Period.
When I worked at Chick-fil-A, I knew quite a few operators that worked less than 40. This is where Chick-fil-A’s ownership model helps them. Managers who want to be operators will work for less than they can earn other places for a chance at being an operator, because CFA tends to hire internally.
"Most" is a broad term. I know in the Dallas are, a few stores are "owned" as one-of-two, and at least a few as one-of-three. In the cases I know about, someone had to "own" a successful stores for several years before they were allowed to try for a second.
I think either of these acceptance rates are computed by casting the widest net possible. Nevertheless I have to believe Chick-Fil-A has a very rigorous process for hiring managers, who in turn know how to hire good workers; I have never once encountered the typical surly fast food worker at any of their restaurants.
Same. I ate at a food court that had a Chick Fil A and the Chick Fil A employee refilled everyone's drinks at our table even though they weren't all bought at Chick Fil A. That's just not normal for fast food workers.
I think either of these acceptance rates are computed by casting the widest net possible.
Quote the opposite. In a Forbes (or similar business publication) last month it stated that Chick-Fil-A is very selective about who it allows to have a franchise. It gets something like 20,000 applications each year but only awards a few franchises.
Apparently the biggest factor in getting a franchise is whether the owner has a demonstrated history of investment and involvement in the community.
By casting the widest net I mean they are including everything possible in the denominator: perhaps everyone who does the first stage of the process. I know way too many people from my small social circle, who got jobs at Google, to believe that only 2 in 1000 serious applicants gets in.
Misleading headline? It costs $10k only compared to hundreds of thousands with other franchises. CFA covers all initial costs and simply takes much more in profit sharing than others.
From the article. Already knew, but this summarizes the food business so beautifully.
“As a fast-food franchise owner, you’re often fighting a war for pennies,” says Rose. “Food is the most competitive industry known to man: It has the highest investment level of any industry, the highest failure rate, and the lowest margins.”
I was in Vegas a few months ago and saw construction signs for a new Chick fil A at Planet Hollywood on the Strip. Can only imagine how profitable that location would be.
My biggest takeaway from this is that Wendy's standards are surprisingly high. Why do they require a net worth of $5 million when most seem to top out at $1 million? Is it a way of ensuring a lower closure rate as people with $5 million net worth are less likely to go bankrupt and shut down the restaurant?
What's even more weird to me is that they have these high franchise standards, but apparently they don't seem to hold the franchises to high standards (at least not the stores I visit). They're always dirty / unkempt.
Are there any viable franchises that are hands off? Like you put in the investment, hire manager(s) and earn revenue as the owner without having to invest a lot of time on the day to day operation?
Oh man. That's a loaded question. Short answer no, long answer noooooooo.
With years of work you might get close. Finding good people and aligning incentives so you retain them is not easy.
Most franchisees that try and be hands-off from the start crash and burn. Which makes sense, really. If it were a lucrative passive investment, the franchisor would just throw some money at it and keep all the profits.
> At $4.2m per store, Chick-fil-A’s average revenue is the highest of any fast-food chain in America, dwarfing both direct competitors (KFC; $1.2m) and bigger brands (McDonald’s; $2.8m)
Most organizations lose 30% - 50% of their "mojo" with each layer of separation from an "engaged stakeholder". Generally meaning someone with equity or substantial profit sharing.
I'd also bet that the majority of their owners only own one business, which means they are even more engaged.
Compare that with the typical master franchise operator, who may be running multiple locations and multiple brands. Unless they have an awesome process and technology team, their operational efficiency is probably a full order of magnitude below the typical highly engaged Chick-fil-A...
Fantastic food that is higher quality than the typical chains. Served fast and close to the same prices. Individually owned and operated with tight franchise oversight. Also the faux Twitter outrage has helped give them more popularity.
All of the old chains have launched bigger/better/more expensive food options but it's hard to compete since their reputation and existing customer base knows them for a certain price and quality.
> Politics aside, the food is awesome, fast, and polite.
Is it though? I really don't get it. Chick-fil-A's entire menu consists of unremarkable chicken sandwich variations, and unremarkable... everything else. It's just not very good - at least compared to other fast food options. It doesn't stand out to me. I can't figure out why it stands out to so many other people.
I think the push-back against them from LGBTQ activists is really pretty silly. Even still, I know many bleeding hearts who are perfectly aligned with such activists and who regularly patronize Chick-fil-A (but jokingly call it "hate-chicken" or something similar) - but they keep going, and keep spending their money there. Why?!?
I think it is pretty good, especially compared to stuff like McDonald's or other fast food. They also have amazing customer service and are consistently fast at getting you your food. I'm curious which fast food chains you think taste better, I'd like to give them a try.
To me, its just another fast-food chicken sandwich, I guess. IMHO, the sandwiches from every other major chain, including McDonald's, Wendy's, and Burger King are pretty similar. Nothing differentiates the Chick-fil-A sandwich from the others, that would cause me to wait in the long, traffic-stopping lines that form at their restaurants at meal times. It really baffles me.
If you go to McDonalds or Carl's Jr, there's a big difference between a $1 and $5 burger. Chick-fil-a doesn't have that bottom tier and starts at higher prices with the associated quality. So yea, you can get similar food at the existing chains but it's just not their focus.
Name a fast food chain besides popeyes that can pull off a better spicy chicken sandwich. Even chick fil a's isn't heavenly (my preference is for a thai take on the sandwich from a local place albeit 3x the cost), but it is head and shoulders above any other chain in that market.
There is also something powerful about the spicy chicken sandwich in particular. Every brewpub offers some nashville styled whatever cut of chicken these days. Popeyes is still selling out their sandwiches a half year after release. Howling rays is still getting people to wait for over an hour for a chicken sandwich, and crashed the postmates website when trialed delivery for one day a few months ago.
> Name a fast food chain besides popeyes that can pull off a better spicy chicken sandwich.
shrug... every other chain that offers one? I guess this is all subjective, but I don't taste any quality difference between Chick-fil-A and other fast food chain chicken sandwiches. It seems like hype to me.
Chic fil a offers actual chicken cuts. The nuggets and tenders are actually ripped pieces of breasts, the sandwiches are actual filets that are seasoned and breaded in the store the day you ordered it.
You go to a wendys or a mcdonalds and order a dozen nuggets, you will see they come in exactly 4 shapes—ground whatever parts of chicken pressed into a mold of one of 4 randomly chosen shapes, breaded and flash frozen at a factory, and flash fried in store. Taste is subjective of course, but the quality of meat difference here is actually pretty objective.
I'd argue that for a fast food chicken sandwich (especially the "spicy deluxe" variant), theirs is pretty good, but these are matters of taste.
If I go to a CFA, I can count on the food being a certain, consistent quality. I have eaten a lot of CFA over the years, and I've had a low-quality piece of chicken (e.g. tough, full of gristle, etc.) maybe once. Compare this with "chicken" served at milkshake and burger fast food joints, which is mostly made from parts and not whole meat. I've gotten violently ill from KFC before and have since desisted from buying their food, and my local Popeyes has such bad service that no one goes - I think DoorDash is singlehandedly keeping them in business. Even Bojangles in the South or Hardee's/Carl's Jr. have given me real clunkers of sandwiches and chicken before. Chick-fil-A is consistently good quality in comparison. When I'm done with a meal at CFA, I never feel like I'm going to spend the next few hours wondering I need to begin praying to the porcelain gods.
The other killer feature is the service and efficiency. I don't hesitate to get in a long CFA line, because I know it will clear soon. This is another aspect of consistency that is just underrated. If I get in a long line at, say, McDonald's, it may clear one 5 mins or 30. With CFA, I know it'll very likely be done in 10 mins.
The third really big differentiating factor for me is that when you get something you expect to be fresh from CFA, it is consistently fresh. I have not experienced wilting lettuce, "gelling" tomatoes or carrots that have been left too long at CFA. At any other fast food joint, that is a regular experience, even the ones that are too posh to have a drive-thru. Their fresh fruit is the same thing - consistently high quality and tasty. Same goes for lemonade and iced tea (theirs really is the best in the business; and for those not from the South, you can always ask for diet or unsweetened versions of fresh drinks). My son actually gets upset at me when I accidentally get him a side of waffle fries from CFA rather than the fruit cup, since the quality is so good.
The last part is that they seem to really treat their employees well. CFA tends to start their employees at higher wages than almost any other fast food chain, and they give them extensive training in how to operate the store and treat customers. I've heard employees - both Christian and not - say that having a guaranteed day off once a week is wonderful. The restaurants are clean and the workers seem to take pride in doing good work. It's just a good atmosphere. It seems like the kind of job that gives low-skill people the actual skills they need to be productive citizens and employees when they're looking for something beyond food service.
If I were to put it all in statistical terms, along almost any measure dimension, CFA has an above-average mean and extremely low variance. Other fast food places have optimized certain dimensions like this as well: McDonald's for example has extremely consistent - and mediocre - quality and a very consistent low price point. None of them match the breadth of consistency as well as CFA does.
Every time I've been in a CFA in the past few years it's been absolutely packed, but their system is efficient enough that the wait time is only a few minutes and the service is friendly.
"Average" is a meaningless measure when the denominator is different.
Fewer stores targeting higher revenue areas, often where they are exclusive local operator. It's like Mac vs PC. You can get higher revenue per store if you limit your market size.
I also think their counter workers are some of the best.
Maybe because of the religious ethos they promote.
They actually care about making you happy.
Have you seen the video of the McDonalds worker assaulting a customer because they complained about cold food.
They are the worst.
I also think the size of their chicken sandwich is the key.
Not press-meat but a true 6 ounce breast filet.
The other fast food stores use junky meats.
"Oh yes let us not forget they have a double lanes drive through.
During the busy periods they put order takers outside in line to take orders."
In-N-Out was doing those a decade ago, easily. It was my first memory of eating at one, the line spilled out to the highway exit ramp, and they had people there outside running down the lanes and the street to take orders.
Virtually every McDonald's around me (Minneapolis area) has double drive through lanes. I've been to a number in the area that has people outside taking orders (during the summer at least) during lunch.
> Not press-meat but a true 6 ounce breast filet. The other fast food stores use junky meats.
Maybe not even junk "meats" at all.
"Those results were averaged: the oven roasted chicken scored 53.6 per cent chicken DNA, and the chicken strips were found to have just 42.8 per cent chicken DNA. The majority of the remaining DNA? Soy."
They opened up the first one near me in a Portland Oregon suburb. The place was packed whenever they were open with drive-thru cars spilling out into the street. I thought the madness would end after a few days/weeks, but it's been years and they still have a huge draw. I went in there once just to try it. It was good, but not the best thing I've ever had. I wonder if it is nostalgia from people from the SE USA that is driving all the business.
Chick-Fil-A's in the SE (or at least NC) are also packed to the brim whenever it is close to a meal time. Although they don't serve the best food in the world the customer service is excellent, the food is pretty good for fast food and it is consistent in matter which location you go to, and you can get your food much faster than other places despite the massive crowds.
The one at Park Rd Shopping Center in Charlotte is going to be rebuilt as a drive-thru only location at the (rather firm, supposedly) request of the city because it's such a traffic nightmare.
Honestly, the obnoxious lines at this location and others around the city are one of the reasons I really hate the chain. It's typical fast food garbage - lines spilling out into the street for that crap is just so stupid.
Odd that you would hate a chain for being successful, especially if they are taking steps like redesigning their stores to help fix the problem. Also I would have to disagree with calling Chick-Fil-A fast food crap. That's more like value menu McDonald's burgers and Chick-Fil-A is a step above that (in both price and quality) IMO
Let's not forget that their mobile app is one of the best "restaurant" apps I've ever used. It's easy to use, informative, and provides real rewards (free food). I even use it while I'm in the actual store (sometimes) to purchase food when the line is super long.
The draw is that it's the only fast food place besides popeyes that can make a decent spicy chicken sandwich for only $4.
The wendy's spicy sandwich costs more while being cafeteria food tier and is barely seasoned. BK and mcdonald's offerings aren't much better. Not sure who else is even in this spicy chicken game, but it is a massive game to get into. There is a reason why popeyes still can't keep their sandwiches from selling out instantly, and howling ray's has an hour wait on a good day. Good spicy chicken sells itself.
Howlin' Ray's is not relevant (only one current location open), and it is definitely not your typical fast food layout (drive through or easy parking). It's in the Far East Plaza.
It hits square in the middle of the “healthy” fast food market. It is perceived to be slightly more upscale and less bad for you than the traditional burger chains.
It is literally the default choice for soccer moms ferrying kids among afternoon activities.
It goes in cycles. Remember only a few years ago when eggs were an epidemic, killing Americans daily.
Dietary science really was awful, and probably still is comparatively weak. I think it's getting better though; I'm pretty convinced that sugars are bad.
I'm an industrial engineer, so these sorts of questions fascinate me.
My intuition is their revenue is so much higher because of a mix of higher service people are willing to pay for (almost casual versus definitively fast food), higher average cost per person, and cheaper inputs (chicken versus beef price per pound).
# Speed of Service
I've ordered Chick-fil-a and literally been handed my food before the credit was done processing. That's not the norm, but was surprising. They get fast casual pricing while still being able to complete orders in a fast food
#Cost per Person
Chick-fil-a doesn't have a value menu. As a quick reference, look at the menu prices for Chick-fil-a [1] and McDonald's [2]. It's not a perfect datasource, but it roughly aligns with what I've seen.
At McDonald's you can get 2 cheeseburgers for $2. The cheapest sandwich at Chick-fil-a is listed at $3. Chick-fil-a doesn't have a "value menu" or "dollar menu" like other fast food chains do.
# Menu Simplicity
Chick-fil-a does a better job of keeping their menu simple. While it's not a direct effect on revenue, it would help training and there would probably be bigger containers of ingredients and fewer to reach over (reducing completion time).
Compare the unique ingredients between McDonald's [3] and Chick-fil-a [4]. There are way more combinations with McDonald's than Chick-fil-a. Additional complexity to be dealt with behind the scenes (though I've heard they make it dead simple to learn how to make the food). Taco Bell can (or used to be) be noted for only having about 8-10 ingredients which were mixed and matched into their entire menu!
One reason might be that in the US, there are close to 14,000 McDonald's locations, but only close to 2,400 Chick-Fil-A locations. If you want McDonald's you have almost 6 different locations to consider for every 1 Chick-Fil-A.
In other words, the "per store" metric isn't as impressive when you look at the number of stores.
An average like this doesn't necessarily mean the high end is good, it can also mean the absence of a low end dragging it down. An average like this means selectivity, avoiding out-of-the-way or oversaturated neighborhoods that would see less business.
Their prices are absurd for what you're getting. The regular CFA sandwich here (chicken, pickles, toasted butter bun) is $4.29 each. I can go to Gus Jr. (a local option) and get the same chicken sandwich (same amount of chicken, same bun with butter) with more pickles and lettuce, for $0.99.
Short answer: because both Chick-fil-A and McDonald's want it that way.
Longer answer: McDonald's has chosen to optimize for total revenue, while Chick-fil-A has chosen to optimize for something more like ROI on each store. This is a direct consequence of the different franchise models, where McDonald's takes a cut of sales and doesn't have an ownership stake in each location, while Chick-fil-A take a cut of both sales and profits, and has ownership of the physical location.
As dave5104 mentioned, there are over 14,000 McDonald's locations in the US vs around 2,000 Chick-fil-As. McDonald's has saturated the market to the point that individual McDonald's locations cannibalize the sales of other nearby locations.
For example, there are 14 McDonald's locations within a 5-mile radius of where I live. If you closed down half of them, total revenue would probably drop some, but not anywhere near half. Many people who wanted McDonald's would just travel a little bit further to get to one. As a result, per-store revenue would go up. Per-store profit would go up by an even greater percentage since there are fixed costs per location. And if you closed the right number (which might be more or less than half), total profit would go up as well.
This would be great for franchisees, but from McDonalds' perspective it's worse since total sales would decrease, and that's what they're getting a cut of. Chick-fil-A's model, where they take a cut of both sales and profits aligns their interests more with their franchisees.
Interesting some decades ago I think McDonald's did a study that led to something called the 4 minute McDonald's universe which was a distance they found people would go for spur of the moment purchasing. Obviously impractical, but this idea of optimizing for total revenue has been around for a bit I think.
And it's not limited to mcdonalds. Starbucks is getting notorious for this. Here is an area by me with three starbii:
https://goo.gl/maps/qR2XLLVYmqiyrHtLA
One in the vons, directly across the street from one in the ralphs, and if you head north on vermont in this street view you will hit a burger king. Today that is a freestanding starbucks. Three starbucks locations in less than a square mile.
Sounds familiar except for the walking part; as a rule we don't walk much in Houston because the city is not designed for it and it's also sauna levels of hot and humid much of the year.
I have myriad issues with the personal ethics of the owners of Chick-fil-A - but their model does make sense to me.
They're clearly not just wanting to sell their brand - they're wanting to own their brand.
The 10k is just a token - It's maybe more than you have in your clearing account, but a figure that most people could likely produce and is just an indicator that "you're serious"
Important part is that they put you through the grinder to make sure you're the person they want to run their store. To be honest just looks like a regular job interview - with the exception that they charge you to join the company, but you get a cut of the profits.
Not even sure if they're in the UK yet, but you can see the converse with Subway that keeps appearing all over the place, despite not having any customers.
That's certainly not immediately. Also not by decision of CFA. The local landlord folded and decided not to renew the lease, so after the initial 6 months, that CFA location would have to close.
10k seems low because the true cost is baked into all the sundry branded material and foodstuff you need to buy from cfa corporate. Chicken, straws, cups, salt, mop bucket soap—I wouldn't be surprised if the true cost of being a franchisee was more or less the same as any other major chain franchise.
Honestly, until now I always thought that chick-fil-A would do like wraps with chickpeas in from the name. I wonder how little they realise their brand holds weight in the UK. I know I'm only a single datapoint, but a lot of these american fast food names that haven't come to the UK already have quite a hurdle to jump.
Could you please elaborate on why those groups aren't "anti-gay"? I've never heard of "Fellowship of Christian Athletes", but the Salvation Army is absolute anti-gay.
For me personally, the phrase "anti-gay group" muddies the waters because although Salvation Army (1) does (or did) have some anti-gay policies, and (2) is a "group", its main purpose is to be a food or shelter charity; not to pursue the disenfranchisement of gays through say, political compaigning.
To illustrate, I might refer to an organization under religion X as an "anti-women religious group" because perhaps religion X had some policy on women's activites that I believed were sexist; then for me "anti-women religious group" would be a technically correct phrase in that X is "anti-women" and "a religious group", but the phrasing would probably be objectionable to practitioners of the religion who don't see those particular policies as fundamental to their religion, and perhaps didn't even consider the policies sexist in the first place.
In general, I don't think I often see this loose use of terminology applied to other cases; like I don't think people call Nike a pro-child-labor company, although if that were the topic of discussion I might say Nike uses child labor. To me it's about avoiding ambiguity.
There's no reason to try to make this complicated. You either treat gay people with equality or you don't. If you don't treat them as equals you are anti-gay.
If your primary goal is to harm gays you are a hate group.
I think there’s plenty of nuance here. Taking your position consistently, would you be comfortable referring to any christian X as “anti-gay X” or any muslim Y as “anti-women Y”? I think the label would be out of place in most cases, and needlessly divisive.
Please do not spread such dangerous falsehoods like stating that they have not been anti-gay. These false ideas can get people hurt. Salvation Army has a very long, very intense history of going out of its way to harm LGBT people.
They help 23 million people a year, without any type of discrimination. They have at least one dorm exclusively for transgender individuals. Their charity services literally benefit millions of LGBTQ individuals every year.
But if you want to call that "extremely", "violently", or "intensely" anti-gay then I certainly can't stop you.
Editing to remove accurate but aggressive words is a common piece of advice you hear on HN. I stand by original comment and my edit.
> They help 23 million people a year, without any type of discrimination.
This is false.
> They have at least one dorm exclusively for transgender individuals. Their charity services literally benefit millions of LGBTQ individuals every year.
Good acts do not undo bad acts.
> But if you want to call that "extremely", "violently", or "intensely" anti-gay then I certainly can't stop you.
Of course! I am right about this regardless. Salvation Army's discrimination and intentional pain caused to LGBT is real, even if you've never felt it yourself or wish to pretend it doesn't happen.
The fact that this is even a conversation at all should be sufficient evidence that their discrimination has in fact hurt LGBT people in particular.
You gave yourself three chances to defend your position and each time you failed to attempt it.
I understand two things about the Salvation Army. They serve the most vulnerable in their community(-ies) and they hold religious beliefs which run against the politics of the day.
That second point may give you some sense of justification. But consider this, on the Salvation Army's website, one of their top line issues is serving LGBTQ community.
That strikes me as odd for an organization described by you as "extremely, violently anti-gay". It seems to me that the Salvation Army is not against an LGBTQ person. They may disagree with their choices but are perfectly happy to alleviate their homelessness, addiction, hunger, poverty, etc.
Are you not able to discern the difference between political disagreement and violence? Are the Salvation Army not the pinnacle of what it means to be tolerant? They're willing to serve those whom they disagree with. In my mind, they're exactly what is required to have a pluralistic society.
Salvation Army has spent almost centuries causing active harm to LGBT community. That notice on their website is brand-new and their actions recently indicate that they are likely to continue going out of their way to cause harm to LGBT people.
The corporate doublethink on their website is propaganda and does not reflect the reality of who they are. I do not believe that a 150+ year old organization with a strong history of the people involved being extremely hateful to LGBT people is in a total turnaround - they have refused to admit their wrongdoing in any reasonable way and have also made public statements recently that the will continue to donate to anti-LGBT people.
Providing good services to some while rejecting others for simply being who they are does not come across as a good, kind, or deserving of praise in any way. Their good deeds have been selective in who receives them and their language for groups they don't like borders on genocidal.
The Salvation Army is not a force for good in the world. It is a hateful religious group who has a public and strong recent history of causing direct harm to people who need help the most.
it might be helpful if you could spell out some of the specifics of their current violent attacks on LGBTQ folks. This would make your "corporate doublethink propaganda" claims stronger.
You can't really use the century thing, most western organisations had views which most progressives would view as abhorrent today.
Section 28 in the UK was only 40 years ago, when the UK government was descriminating, and only repealed less than 20 years ago. When you put the beside your 150 years, you're coming across as lacking in even a basic understanding of history.
Attitudes change. And those attitudes changed only very recently for almost the whole of the western world.
My family recently watched the entire boxed set of 'Quantuum Leap'. The series was consistently, unapologetically progressive. (It had pro-abortion episode, sympathetic gay characters, etc.) One Christmas episode had an evil rich guy who was trying to close down....... the local Salvation Army building.
It is simply amazing how intolerant some people are. Yesterday's progressives are today's horrible bigots in the eyes of some. (Really. Ask Monty Python!)
This connection seems negligently tenuous. Does an organization having a great public image automatically eliminate the possibility of it doing bad things for all future time?
On the contrary, it's merely one of the defining features of the caricature used in bad-faith attacks on the over-general "social justice left". In reality, the conflation is rare, but high profile when it happens (as expected).
I want to characterize this as a “motte and bailey” response but I think it’s more complicated than that. I’m sure a lot of people who are sympathetic to the social justice movement don’t actually believe or are exposed to the more radical ideas like this, but the core of the movement absolutely operates this way. For example, most of the rationale for regulating “hate speech” explicitly conflates “hate speech” with violence; meanwhile, non-hateful dissent with the ideology is simultaneously characterized as “hate speech”, thus transitively conflating political disagreement with violence.
> They serve the most vulnerable in their community
This is kinda part of the problem. Because Salvation Army is in this business, it's an excuse for others to not be - and especially so for governments, since "just leave it to the charity" is a very common take on welfare on the conservative right. So then when they discriminate, the people they discriminate against often have nowhere else to go. They have to either accept the religious mores forced on them in exchange for food and roof over their head, or they starve. And SA knows that full well when they turn such people away from their kitchens and shelters.
And no, they aren't a pinnacle of tolerance. There are numerous recorded instances of them refusing to alleviate the homelessness and hunger on the basis that acceptance of LGBTQ is counter to their religion.
The Salvation Army is a church, and is regulated as a church. They can inquire about your religious or personal beliefs when hiring or before providing services.
They threatened to close in NYC if they had to support gay partner's benefits in the city.
There's a laundry list of discriminatory behavior from the Salvation Army, it's patently absurd to say they operate "without any form of discrimination".
> They threatened to close in NYC if they had to support gay partner's benefits in the city.
FYI, while true as a historical matter (this was done in 2010 according to a google search), I believe this is outdated. https://www.wsj.com/articles/progressives-ambush-the-salvati... notes in 2019: ‘Yet the organization says it doesn’t consider sexual orientation in hiring and now provides “the same benefits to opposite-sex and same-sex couples.”’
They are a church as you note and I’m not sure what their doctrine for their followers is. On the other hand, isn’t it anti-religious bias to attack someone for donating to a church? In US law, religion is protected on the same level as any other protected characteristic (sex, race, etc.) due to the long history of discrimination against minority religions for their political or moral views.
In general attacking CFA for donating to a mainstream christian church seems only a step away from demanding that followers of Christianity who attend or donate to their churches must be fired from their jobs or otherwise discriminated against...
I haven't seen any evidence that they've _continued_ to donate money, just that they said "OK, we might keep donating" as a way to calm down people who were angry by the announcement.
This article (and all the others I've read) only talks about donations that happened 2 and 3 years ago.
With 50% of profits / 15% of gross, they really own the store, and they're charging you $10,000 to apply for a job interview to manage it. It's a "franchise" in name only.
I know several CFA owner-operators, and this article is mostly on point.
Some of the comments I’ve seen are a bit off. 2 of the 3 owner-operators I know have multiple locations, although this is rare. Income estimates are a bit low for typical stores I’d be surprised if any owner operator of a freestanding unit is below $250k. Also, the estimates of worked hours are a bit high. All the owner operators I know have great work-life balance, this is a function of how well they hire and train their general managers.
There are also some significant advantages to non-ownership that are win-win for both the company and operators. CFA provides significant support beyond what other franchisers do: IT, capex for renovation, and training. CFA is incredibly focused on efficiency in their stores. If you’ve seen a freestanding store recently, you’ve probably seen it be renovated to allow for double drive through lanes and a walkthrough parlor for pickup. That’s not the type of thing many franchisees at other companies have the cash (or willingness) to do.
Extremely well put. I completely concur. My first cousin is in the process of getting his “own” store now. While it has been a grind (he often worked the mythical 100+ hour week while in the Leadership Development Program) it will pay off handsomely.
The best part of Chic-Fil-A (in my opinion) is not the food but their total devotion to the customer. The level of service you receive at a Chic-Fil-A freestanding store is unparalleled at virtually all other fast food joints (with the occasional exception of In-N-Out ((maybe the hyphens add to greater service?)) and most restaurants in general.
Haha you know, I think you are onto something! But the main thing is that most fast food businesses (and businesses in general) are so focused on revenue that their employees and customers suffer.
I recently used a self-serve machine at Taco Bell (love the dreadful beef chalupa) and had a poor experience. The machine was too low for my height and unadjustable. Poor design really brings out the worst in the fast food experience.
Wow. Touchscreen experience brings out the worst in an industry that sells junk food, and relies on not paying taxes and fighting fair wages to stay afloat.
I don't eat at Chic fil a because I had a manager tell me my opinion is wrong and basically they don't care about the customers opinion. So it appears to me that they have absolutely zero devotion to the customer.
This doesn't really seem worth it by any measure: "In return for 60-hour work-weeks, an operator might take home 5-7% of revenue (around $150-$250k per year)." That comes out to around $50 - $83/hour, a nice wage but isn't going to bring any vast amount of wealth
Something I've been curious about that maybe you or others here have some insight on: Do you think they'd do even better if they were open 7 days/wk? Or is taking a day off one of the things contributing to their success?
On this point. They shouldn’t be allowed in certain locations in my opinion because of this policy. Certain airports are already limited on options for eating and then they close on Sunday. It turns the airport dining experience upside down and its incredibly frustrating.
I think it lends to their success. First there is a bit of a lack of supply feeling. I think it drives people to go because it’s closed on Sundays, even if those same people had no real intention to go on Sunday. People are weird like that.
I also think every Sunday off helps them find and retain better workers.
> I think it drives people to go because it’s closed on Sundays, even if those same people had no real intention to go on Sunday.
that's interesting - and you also see this FOMO in all aspects of life, and some clever/insidious marketing can create this artificial scarcity to drive up demand.
I actually used to work there back in highschool before all the controversy in recent years with the bigoted owners. They'd totally make more money and they know it, just look at how much demand there is already to sustain a staff of around a dozen even for closing shifts (when mcdonalds et al would cut staff to two and close the dining room). I've only seen In n Out with similar staff sizes and latent demand, no one else in the fast food industry is close imo.
My typical shift was 4-close, and right around 4:15 demand would be a constant car after car until close, every single day. Demand was so high we had a term called 'wrap around' where the line of cars in the drive thru would wrap entirely around the store. This would be the case from 4:30-6 every single day I worked there, and this was only a mid sized suburb in the midwest in a strip mall with every other chain restaurant you can imagine, so they were dominating competition.
CFA is giving up significant revenue by closing on Sundays. There might be marginal benefits, but those are absolutely dwarfed by the revenue they have given up. Saturdays are the highest revenue day at most CFAs I know of, and I would guess that Sunday would match it or be right below it, were they to be open.
>> That’s not the type of thing many franchisees at other companies have the cash (or willingness) to do.
I'd point out McDonald's as a major exception to this. In the past decade, MCD has completely razed and rebuilt from dirt a huge number of its freestanding stores. Yes the franchisees have complained and not all are down with the program but the new stores are generally far more comfortable and pleasant than the old-style, (yet iconic) red-roofs. I imagine far more profitable as well.
When I was a teenager, I was told by a manager that the shake machine at McDonald’s cost more than I make in a year now. The amount of credit you’re operating under as a franchise owner... I don’t know how they sleep at night.
There are high demands on reliability: the equipment is expected to run 10-24 hours a day for years, without harming the operator or leaking oil onto customer's food.
I read comments like this as anthropomorphizing the machine - it's not like the machine has to remember to not harm the operator or not to leak.
Anyway, I don't find this a compelling argument against allowing mechanical failures. Manufacturers these days understand the trade-offs between cost to manufacture, part reliability, and tolerance of failure.
(That said, mechanical failure might not even be a problem with the machines. It could just be the need to claim their offline so that staff can service other customers better.)
> Anyway, I don't find this a compelling argument against allowing mechanical failures. Manufacturers these days understand the trade-offs between cost to manufacture, part reliability, and tolerance of failure.
I fully agree - my point was not to anthropomorphize machines. However, as you said, manufacturers understand the trade-offs, and for "industrial-grade" products, they prioritize having longer Mean time to failure compared to consumer goods. MTTF is sometimes baked into the contract/warrantees since any downtime is money lost - McDonald's can't take the fry machine offline and continue serving 95% of their meals
I did a little experiment at my local mcdonalds last time I got hit with that "ice cream machine is out" nonsense. It happened on a night shift with 1 person at the register and 1 in the back. I showed up the next day with full staff and what do you know, the machine had been fixed in those 12 hours.
Or more likely, the two high schoolers working that night shift did not want to get swamped and behind having to add 2 minutes to every single order in their queue when they have to step away from what they are doing for the rest of the orders and make a shake. Rather than do that and have to be working from behind all night, the shake machine becomes 'broken' for that shift, and there aren't going to be any brown nosing managers working night shift anyway to put their foot down.
>found that 51% of food franchisees earn less than $50k per year and only around 7% take in $250k
Unbelievable, owning a franchise seems pretty stressful just to be taking in 50k/year. I guess once you get it off the ground with good managers you don't have to baby it as much, but still.
Fundamentally it is a different employment model.
The 10k fee is to inspire commitment and weed out non-serious candidates.
After that, the new manager is essentially on commission.
This allows CFA to find people who are ambitious irrespective of current wealth.
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[ 3.2 ms ] story [ 238 ms ] threadInternational agreement?
The franchise brand owner had no incentive, so while it's possible to abolish them through government. It's not clear why we'd go that direction. Given the franchise brand owner takes on additional risk it's not clear why they'd move to take on risk without gain
Regardless, corporate is always incentivized to help their franchisees succeed; they wouldn't really have a business without them, and of course they want their cut of sales/profits to be a higher absolute value.
Also a common area of abuse. There was a sandwich shop chain in the US where this got very ugly a few years ago...
https://www.restaurantbusinessonline.com/financing/brief-his...
Also Quiznos collapsed and was blamed for one franchisees eventual suicide due to their predatory tactics that locked franchise owners into paying high ingredient costs that they could not make a profit on.
Even for a more "traditional" franchise, where the franchisee is responsible for all the start-up costs, even $50k is small peanuts compared to the full cost to bring the restaurant up from scratch. Calling that "predatory" feels like a gross exaggeration.
What incentivizes the new location to do due-diligence in picking a good location? If this is placed into the chain owner: What's the difference between a franchise vs single owner?
Even for a Subway. Earning back $350,000 takes a lot of sandwiches.
Apparently too many subways has caused bully by Subway the corporation of franchisees over good locations.
This naturally means it's very hard to qualify for one.
As such, it is necessary to vet the potential franchisee to ensure they're going to support and improve your brand image rather than damage it. Requiring a "deposit" as such is part of this, as the franchisee will need to at least recover the amount invested by providing good service.
Also, bear in mind that the franchise's corporate brand reputationsuffers when a franchise fails, so there's inherently some risk sharing.
[Agreeing] There are massive costs (relatively speaking) for an independent involved in just learning/optimising the supply chain. With a franchise you, presumably, can skip this which gives a huge head start.
Also if it's a brand chain then you have the benefit of brand level advertising (which works at a different psychological level to shop/activity/product advertising) which should be more efficient per "lead".
They tend to target unemployed middle-aged managers, since that audience is often driven by ego to "be the boss" and has the disposable funds to pony up a large setup fee. I was aggressively targeted when I was laid off last year.
What they didn't know - until we got on the phone - is I'm the target prospect from hell. I certainly have the funds; however, I got them via two decades of finance and strategy work. Old habits die hard. Due Diligence? Don't mind if I do...
I was polite but I laid out my expectations in financial terms based on investments in businesses of similar size. Actual deals which I had managed. Made it clear I had the funds to deliver if they could meet my goals in writing.
They ran like hell.
However, in the meantime, I wound up speaking with a diverse assortment of scum, villainy, and ineptitude.
https://resumeskills.us/talent/shortage
The parent company has no interest in that location ever closing. They're not house flippers or day traders. They rely on stable long-term income, not random tiny spikes a few times a year. Franchise fees are barely even a blip on the radar of a company like McDonald's.
Independent restaurants, if they hit their market, run into the same problem with landlords, who want to take the profit from exorbitant rents after the the lease expires.
It is fried chicken after all - hardly a challenging item to cook, but to perfect it as a recipe, scale and process for "Nextgrid's artisan non franchised fried chicken" will take probably more than $10k and worse of all will take a lot of time in which you will be paying rent and salaries.
He had managers on every shift running day to day so he never really needed to visit the store, but he did a couple times a week anyway to show face with the staff and even step onto the line and bag orders if it got swamped while he was there, simply to lighten the load on the staff.
If this had been an independent restaurant, he might have been doing things like cooking in the back 12 hours a day to lower his payroll. Predatory is not the word I would use for most franchises these days; passive income is the word I would use.
I think I'd rather just get a job at Google.
Maybe from the perspective of a tech person in silicon valley that's not great. But in comparison with pretty much any other job out there this is stellar.
$150k-$250k/year is a fairly nice ROI for even $2M (though taking on loans or investment changes the math), but the calculation gets a little murkier when you factor in additionally needing to work 60 hours/week, six days/week to keep it coming in.
Put another way, if you already have access to $2M, $150k-$250k/year might not seem all that attractive when compared to what you've done prior to that.
Most people work far more for less and would love to have their own business with this much potential earnings and low startup cost.
In most cases, they aren’t permitted to “own” multiple locations. They aren’t permitted to run any other business.
Quote the opposite. In a Forbes (or similar business publication) last month it stated that Chick-Fil-A is very selective about who it allows to have a franchise. It gets something like 20,000 applications each year but only awards a few franchises.
Apparently the biggest factor in getting a franchise is whether the owner has a demonstrated history of investment and involvement in the community.
(vs $1.2 million for KFC and $2.8 million for McDonald's)
“As a fast-food franchise owner, you’re often fighting a war for pennies,” says Rose. “Food is the most competitive industry known to man: It has the highest investment level of any industry, the highest failure rate, and the lowest margins.”
https://www.businessinsider.com/in-n-out-employee-pay-2018-1
* Store managers earn an average yearly salary of more than $160,000, more than what the typical tech worker in Silicon Valley makes for the year.
* High wages for fast-food workers can lead to increased productivity, less employee turnover, and bigger profits in the long run.
[1]https://www.thebalancesmb.com/most-popular-food-franchises-a...
[2]https://www.thebalancesmb.com/wendy-s-franchise-review-13503...
Also the Arby's--kids got sick 2x at the local Arby's.
We don't even eat a lot of fast food, just occasionally when we need to get out of the house and go someplace nearby in the winter.
With years of work you might get close. Finding good people and aligning incentives so you retain them is not easy.
Most franchisees that try and be hands-off from the start crash and burn. Which makes sense, really. If it were a lucrative passive investment, the franchisor would just throw some money at it and keep all the profits.
Wow, I did not know this. Why is that?
Most organizations lose 30% - 50% of their "mojo" with each layer of separation from an "engaged stakeholder". Generally meaning someone with equity or substantial profit sharing.
I'd also bet that the majority of their owners only own one business, which means they are even more engaged.
Compare that with the typical master franchise operator, who may be running multiple locations and multiple brands. Unless they have an awesome process and technology team, their operational efficiency is probably a full order of magnitude below the typical highly engaged Chick-fil-A...
And generally better for you than the major chains...
I'm not really sure what MacDonald's actually serves anymore... much less any of the others...
Is it though? I really don't get it. Chick-fil-A's entire menu consists of unremarkable chicken sandwich variations, and unremarkable... everything else. It's just not very good - at least compared to other fast food options. It doesn't stand out to me. I can't figure out why it stands out to so many other people.
I think the push-back against them from LGBTQ activists is really pretty silly. Even still, I know many bleeding hearts who are perfectly aligned with such activists and who regularly patronize Chick-fil-A (but jokingly call it "hate-chicken" or something similar) - but they keep going, and keep spending their money there. Why?!?
The food just isn't special or particularly good.
There is also something powerful about the spicy chicken sandwich in particular. Every brewpub offers some nashville styled whatever cut of chicken these days. Popeyes is still selling out their sandwiches a half year after release. Howling rays is still getting people to wait for over an hour for a chicken sandwich, and crashed the postmates website when trialed delivery for one day a few months ago.
shrug... every other chain that offers one? I guess this is all subjective, but I don't taste any quality difference between Chick-fil-A and other fast food chain chicken sandwiches. It seems like hype to me.
You go to a wendys or a mcdonalds and order a dozen nuggets, you will see they come in exactly 4 shapes—ground whatever parts of chicken pressed into a mold of one of 4 randomly chosen shapes, breaded and flash frozen at a factory, and flash fried in store. Taste is subjective of course, but the quality of meat difference here is actually pretty objective.
If I go to a CFA, I can count on the food being a certain, consistent quality. I have eaten a lot of CFA over the years, and I've had a low-quality piece of chicken (e.g. tough, full of gristle, etc.) maybe once. Compare this with "chicken" served at milkshake and burger fast food joints, which is mostly made from parts and not whole meat. I've gotten violently ill from KFC before and have since desisted from buying their food, and my local Popeyes has such bad service that no one goes - I think DoorDash is singlehandedly keeping them in business. Even Bojangles in the South or Hardee's/Carl's Jr. have given me real clunkers of sandwiches and chicken before. Chick-fil-A is consistently good quality in comparison. When I'm done with a meal at CFA, I never feel like I'm going to spend the next few hours wondering I need to begin praying to the porcelain gods.
The other killer feature is the service and efficiency. I don't hesitate to get in a long CFA line, because I know it will clear soon. This is another aspect of consistency that is just underrated. If I get in a long line at, say, McDonald's, it may clear one 5 mins or 30. With CFA, I know it'll very likely be done in 10 mins.
The third really big differentiating factor for me is that when you get something you expect to be fresh from CFA, it is consistently fresh. I have not experienced wilting lettuce, "gelling" tomatoes or carrots that have been left too long at CFA. At any other fast food joint, that is a regular experience, even the ones that are too posh to have a drive-thru. Their fresh fruit is the same thing - consistently high quality and tasty. Same goes for lemonade and iced tea (theirs really is the best in the business; and for those not from the South, you can always ask for diet or unsweetened versions of fresh drinks). My son actually gets upset at me when I accidentally get him a side of waffle fries from CFA rather than the fruit cup, since the quality is so good.
The last part is that they seem to really treat their employees well. CFA tends to start their employees at higher wages than almost any other fast food chain, and they give them extensive training in how to operate the store and treat customers. I've heard employees - both Christian and not - say that having a guaranteed day off once a week is wonderful. The restaurants are clean and the workers seem to take pride in doing good work. It's just a good atmosphere. It seems like the kind of job that gives low-skill people the actual skills they need to be productive citizens and employees when they're looking for something beyond food service.
If I were to put it all in statistical terms, along almost any measure dimension, CFA has an above-average mean and extremely low variance. Other fast food places have optimized certain dimensions like this as well: McDonald's for example has extremely consistent - and mediocre - quality and a very consistent low price point. None of them match the breadth of consistency as well as CFA does.
The spices on the chicken taste weird to me...
Fewer stores targeting higher revenue areas, often where they are exclusive local operator. It's like Mac vs PC. You can get higher revenue per store if you limit your market size.
Have you seen the video of the McDonalds worker assaulting a customer because they complained about cold food. They are the worst.
I also think the size of their chicken sandwich is the key. Not press-meat but a true 6 ounce breast filet. The other fast food stores use junky meats.
During the busy periods they put order takers outside in line to take orders.
They have so serious efficiencies. I like that.
During the busy periods they put order takers outside in line to take orders."
In-N-Out was doing those a decade ago, easily. It was my first memory of eating at one, the line spilled out to the highway exit ramp, and they had people there outside running down the lanes and the street to take orders.
Maybe not even junk "meats" at all.
"Those results were averaged: the oven roasted chicken scored 53.6 per cent chicken DNA, and the chicken strips were found to have just 42.8 per cent chicken DNA. The majority of the remaining DNA? Soy."
https://www.cbc.ca/news/business/marketplace-chicken-fast-fo...
https://www.charlotteagenda.com/152719/chick-fil-a-woodlawn-...
Honestly though, my guess is probably consistent customer service- everyone seems to be happy- and consistently high quality food.
Also, where else would I get waffle fries?
The wendy's spicy sandwich costs more while being cafeteria food tier and is barely seasoned. BK and mcdonald's offerings aren't much better. Not sure who else is even in this spicy chicken game, but it is a massive game to get into. There is a reason why popeyes still can't keep their sandwiches from selling out instantly, and howling ray's has an hour wait on a good day. Good spicy chicken sells itself.
It is literally the default choice for soccer moms ferrying kids among afternoon activities.
It’s sort of like how folks won’t eat pork.
Dietary science really was awful, and probably still is comparatively weak. I think it's getting better though; I'm pretty convinced that sugars are bad.
My intuition is their revenue is so much higher because of a mix of higher service people are willing to pay for (almost casual versus definitively fast food), higher average cost per person, and cheaper inputs (chicken versus beef price per pound).
# Speed of Service
I've ordered Chick-fil-a and literally been handed my food before the credit was done processing. That's not the norm, but was surprising. They get fast casual pricing while still being able to complete orders in a fast food
#Cost per Person
Chick-fil-a doesn't have a value menu. As a quick reference, look at the menu prices for Chick-fil-a [1] and McDonald's [2]. It's not a perfect datasource, but it roughly aligns with what I've seen.
At McDonald's you can get 2 cheeseburgers for $2. The cheapest sandwich at Chick-fil-a is listed at $3. Chick-fil-a doesn't have a "value menu" or "dollar menu" like other fast food chains do.
# Menu Simplicity
Chick-fil-a does a better job of keeping their menu simple. While it's not a direct effect on revenue, it would help training and there would probably be bigger containers of ingredients and fewer to reach over (reducing completion time).
Compare the unique ingredients between McDonald's [3] and Chick-fil-a [4]. There are way more combinations with McDonald's than Chick-fil-a. Additional complexity to be dealt with behind the scenes (though I've heard they make it dead simple to learn how to make the food). Taco Bell can (or used to be) be noted for only having about 8-10 ingredients which were mixed and matched into their entire menu!
[1] https://www.fastfoodmenuprices.com/chick-fil-a-prices/
[2] https://www.fastfoodmenuprices.com/mcdonalds-prices/
[3] https://www.mcdonalds.com/us/en-us/full-menu.html
[4] https://www.chick-fil-a.com/OrderFood
I don't think I've ever seen a bad Chick-fil-A...
In other words, the "per store" metric isn't as impressive when you look at the number of stores.
Longer answer: McDonald's has chosen to optimize for total revenue, while Chick-fil-A has chosen to optimize for something more like ROI on each store. This is a direct consequence of the different franchise models, where McDonald's takes a cut of sales and doesn't have an ownership stake in each location, while Chick-fil-A take a cut of both sales and profits, and has ownership of the physical location.
As dave5104 mentioned, there are over 14,000 McDonald's locations in the US vs around 2,000 Chick-fil-As. McDonald's has saturated the market to the point that individual McDonald's locations cannibalize the sales of other nearby locations.
For example, there are 14 McDonald's locations within a 5-mile radius of where I live. If you closed down half of them, total revenue would probably drop some, but not anywhere near half. Many people who wanted McDonald's would just travel a little bit further to get to one. As a result, per-store revenue would go up. Per-store profit would go up by an even greater percentage since there are fixed costs per location. And if you closed the right number (which might be more or less than half), total profit would go up as well.
This would be great for franchisees, but from McDonalds' perspective it's worse since total sales would decrease, and that's what they're getting a cut of. Chick-fil-A's model, where they take a cut of both sales and profits aligns their interests more with their franchisees.
One in the vons, directly across the street from one in the ralphs, and if you head north on vermont in this street view you will hit a burger king. Today that is a freestanding starbucks. Three starbucks locations in less than a square mile.
They're so close that I've switched locations depending on the length of the line. Sometimes both are packed though.
https://www.chron.com/business/article/One-on-corner-there-a...
https://www.youtube.com/watch?v=FRz3vfRFfs4
They're clearly not just wanting to sell their brand - they're wanting to own their brand.
The 10k is just a token - It's maybe more than you have in your clearing account, but a figure that most people could likely produce and is just an indicator that "you're serious"
Important part is that they put you through the grinder to make sure you're the person they want to run their store. To be honest just looks like a regular job interview - with the exception that they charge you to join the company, but you get a cut of the profits.
Not even sure if they're in the UK yet, but you can see the converse with Subway that keeps appearing all over the place, despite not having any customers.
https://www.nbcnews.com/feature/nbc-out/u-k-s-first-chick-fi...
(article dated October)
That's certainly not immediately. Also not by decision of CFA. The local landlord folded and decided not to renew the lease, so after the initial 6 months, that CFA location would have to close.
Americans say fil-eh British say fill-it.
Salvation Army. The Fellowship of Christian Athletes.
Calling those groups "anti-gay" and protesting a fast food restaurant for donating to them is absurd.
To illustrate, I might refer to an organization under religion X as an "anti-women religious group" because perhaps religion X had some policy on women's activites that I believed were sexist; then for me "anti-women religious group" would be a technically correct phrase in that X is "anti-women" and "a religious group", but the phrasing would probably be objectionable to practitioners of the religion who don't see those particular policies as fundamental to their religion, and perhaps didn't even consider the policies sexist in the first place.
In general, I don't think I often see this loose use of terminology applied to other cases; like I don't think people call Nike a pro-child-labor company, although if that were the topic of discussion I might say Nike uses child labor. To me it's about avoiding ambiguity.
If your primary goal is to harm gays you are a hate group.
There is no ambiguity here.
Of course not! There are many Christian groups that treat women and gays with equality.
The Christian groups that treat gays as lesser people are absolutely anti-gay, though. They may not be hate grouped but they are absolutely anti-gay.
Please do not spread such dangerous falsehoods like stating that they have not been anti-gay. These false ideas can get people hurt. Salvation Army has a very long, very intense history of going out of its way to harm LGBT people.
Nice edit.
They help 23 million people a year, without any type of discrimination. They have at least one dorm exclusively for transgender individuals. Their charity services literally benefit millions of LGBTQ individuals every year.
But if you want to call that "extremely", "violently", or "intensely" anti-gay then I certainly can't stop you.
> They help 23 million people a year, without any type of discrimination.
This is false.
> They have at least one dorm exclusively for transgender individuals. Their charity services literally benefit millions of LGBTQ individuals every year.
Good acts do not undo bad acts.
> But if you want to call that "extremely", "violently", or "intensely" anti-gay then I certainly can't stop you.
Of course! I am right about this regardless. Salvation Army's discrimination and intentional pain caused to LGBT is real, even if you've never felt it yourself or wish to pretend it doesn't happen.
The fact that this is even a conversation at all should be sufficient evidence that their discrimination has in fact hurt LGBT people in particular.
I understand two things about the Salvation Army. They serve the most vulnerable in their community(-ies) and they hold religious beliefs which run against the politics of the day.
That second point may give you some sense of justification. But consider this, on the Salvation Army's website, one of their top line issues is serving LGBTQ community.
That strikes me as odd for an organization described by you as "extremely, violently anti-gay". It seems to me that the Salvation Army is not against an LGBTQ person. They may disagree with their choices but are perfectly happy to alleviate their homelessness, addiction, hunger, poverty, etc.
Are you not able to discern the difference between political disagreement and violence? Are the Salvation Army not the pinnacle of what it means to be tolerant? They're willing to serve those whom they disagree with. In my mind, they're exactly what is required to have a pluralistic society.
The corporate doublethink on their website is propaganda and does not reflect the reality of who they are. I do not believe that a 150+ year old organization with a strong history of the people involved being extremely hateful to LGBT people is in a total turnaround - they have refused to admit their wrongdoing in any reasonable way and have also made public statements recently that the will continue to donate to anti-LGBT people.
Providing good services to some while rejecting others for simply being who they are does not come across as a good, kind, or deserving of praise in any way. Their good deeds have been selective in who receives them and their language for groups they don't like borders on genocidal.
The Salvation Army is not a force for good in the world. It is a hateful religious group who has a public and strong recent history of causing direct harm to people who need help the most.
it might be helpful if you could spell out some of the specifics of their current violent attacks on LGBTQ folks. This would make your "corporate doublethink propaganda" claims stronger.
Section 28 in the UK was only 40 years ago, when the UK government was descriminating, and only repealed less than 20 years ago. When you put the beside your 150 years, you're coming across as lacking in even a basic understanding of history.
Attitudes change. And those attitudes changed only very recently for almost the whole of the western world.
It is simply amazing how intolerant some people are. Yesterday's progressives are today's horrible bigots in the eyes of some. (Really. Ask Monty Python!)
This conflation is one of the defining features of the social justice left.
This is kinda part of the problem. Because Salvation Army is in this business, it's an excuse for others to not be - and especially so for governments, since "just leave it to the charity" is a very common take on welfare on the conservative right. So then when they discriminate, the people they discriminate against often have nowhere else to go. They have to either accept the religious mores forced on them in exchange for food and roof over their head, or they starve. And SA knows that full well when they turn such people away from their kitchens and shelters.
And no, they aren't a pinnacle of tolerance. There are numerous recorded instances of them refusing to alleviate the homelessness and hunger on the basis that acceptance of LGBTQ is counter to their religion.
The Salvation Army is a church, and is regulated as a church. They can inquire about your religious or personal beliefs when hiring or before providing services.
They threatened to close in NYC if they had to support gay partner's benefits in the city.
There's a laundry list of discriminatory behavior from the Salvation Army, it's patently absurd to say they operate "without any form of discrimination".
FYI, while true as a historical matter (this was done in 2010 according to a google search), I believe this is outdated. https://www.wsj.com/articles/progressives-ambush-the-salvati... notes in 2019: ‘Yet the organization says it doesn’t consider sexual orientation in hiring and now provides “the same benefits to opposite-sex and same-sex couples.”’
They are a church as you note and I’m not sure what their doctrine for their followers is. On the other hand, isn’t it anti-religious bias to attack someone for donating to a church? In US law, religion is protected on the same level as any other protected characteristic (sex, race, etc.) due to the long history of discrimination against minority religions for their political or moral views.
In general attacking CFA for donating to a mainstream christian church seems only a step away from demanding that followers of Christianity who attend or donate to their churches must be fired from their jobs or otherwise discriminated against...
https://www.therainbowtimesmass.com/chick-fil-a-backpedals-o...
Chick-fil-a did not stop its anti-LGBTQ policies, they only pretended to do so for a few weeks last year.
This article (and all the others I've read) only talks about donations that happened 2 and 3 years ago.
Some of the comments I’ve seen are a bit off. 2 of the 3 owner-operators I know have multiple locations, although this is rare. Income estimates are a bit low for typical stores I’d be surprised if any owner operator of a freestanding unit is below $250k. Also, the estimates of worked hours are a bit high. All the owner operators I know have great work-life balance, this is a function of how well they hire and train their general managers.
There are also some significant advantages to non-ownership that are win-win for both the company and operators. CFA provides significant support beyond what other franchisers do: IT, capex for renovation, and training. CFA is incredibly focused on efficiency in their stores. If you’ve seen a freestanding store recently, you’ve probably seen it be renovated to allow for double drive through lanes and a walkthrough parlor for pickup. That’s not the type of thing many franchisees at other companies have the cash (or willingness) to do.
The best part of Chic-Fil-A (in my opinion) is not the food but their total devotion to the customer. The level of service you receive at a Chic-Fil-A freestanding store is unparalleled at virtually all other fast food joints (with the occasional exception of In-N-Out ((maybe the hyphens add to greater service?)) and most restaurants in general.
I recently used a self-serve machine at Taco Bell (love the dreadful beef chalupa) and had a poor experience. The machine was too low for my height and unadjustable. Poor design really brings out the worst in the fast food experience.
Mmk
https://medium.com/@cfatechblog/bare-metal-k8s-clustering-at...
https://medium.com/@cfatechblog/edge-ai-in-a-smarter-chick-f...
On this point. They shouldn’t be allowed in certain locations in my opinion because of this policy. Certain airports are already limited on options for eating and then they close on Sunday. It turns the airport dining experience upside down and its incredibly frustrating.
I also think every Sunday off helps them find and retain better workers.
that's interesting - and you also see this FOMO in all aspects of life, and some clever/insidious marketing can create this artificial scarcity to drive up demand.
My typical shift was 4-close, and right around 4:15 demand would be a constant car after car until close, every single day. Demand was so high we had a term called 'wrap around' where the line of cars in the drive thru would wrap entirely around the store. This would be the case from 4:30-6 every single day I worked there, and this was only a mid sized suburb in the midwest in a strip mall with every other chain restaurant you can imagine, so they were dominating competition.
I'd point out McDonald's as a major exception to this. In the past decade, MCD has completely razed and rebuilt from dirt a huge number of its freestanding stores. Yes the franchisees have complained and not all are down with the program but the new stores are generally far more comfortable and pleasant than the old-style, (yet iconic) red-roofs. I imagine far more profitable as well.
Grown up me still doesn't understand why the equipment costs that much, except that it's small production runs and captive audience.
Anyway, I don't find this a compelling argument against allowing mechanical failures. Manufacturers these days understand the trade-offs between cost to manufacture, part reliability, and tolerance of failure.
(That said, mechanical failure might not even be a problem with the machines. It could just be the need to claim their offline so that staff can service other customers better.)
I fully agree - my point was not to anthropomorphize machines. However, as you said, manufacturers understand the trade-offs, and for "industrial-grade" products, they prioritize having longer Mean time to failure compared to consumer goods. MTTF is sometimes baked into the contract/warrantees since any downtime is money lost - McDonald's can't take the fry machine offline and continue serving 95% of their meals
Or more likely, the two high schoolers working that night shift did not want to get swamped and behind having to add 2 minutes to every single order in their queue when they have to step away from what they are doing for the rest of the orders and make a shake. Rather than do that and have to be working from behind all night, the shake machine becomes 'broken' for that shift, and there aren't going to be any brown nosing managers working night shift anyway to put their foot down.
Unbelievable, owning a franchise seems pretty stressful just to be taking in 50k/year. I guess once you get it off the ground with good managers you don't have to baby it as much, but still.
This allows CFA to find people who are ambitious irrespective of current wealth.
But as far as I know it doesn’t seem to happen? Can you really predict what will be profitable that accurately?