When it comes to investing, how much do shares of Chick-fil-A cost, and how accessible are they?
Investors probably won’t be scooping up shares in Chick-fil-A anytime soon, and here’s why the fast food chain isn’t considered a hot stock purchase.
Can I Purchase Chick-fil-A Stock?
You won’t find Chick-fil-A listed among the recommended stocks for the fast food business.
To the dismay of potential shareholders, Chick-fil-A is not publicly listed. Because of this, the stock market is unable to purchase Chick-fil-A stock.
The founder of Chick-fil-A ensured that his firm would remain privately owned by having his children sign a contract to that effect before his death in 2014.
Given the absence of a contract to the contrary, Chick-fil-A might be acquired by a party to go public at some point in the future.
However, Chick-fil-A is still run by its founding family and is not publicly traded at this time.
Why Chick-fil-A Won’t Go Public
These three (3) factors suggest that Chick-fil-A will likely not be going public anytime soon:
To ensure it’s managed in a way consistent with their Christian values.
The company’s founder was a committed Christian who worried that taking Chick-fil-A public might compromise the company’s values.
If Chick-fil-A went public, investors who disagree with the Cathy family’s values might buy over the firm. Consequently, the corporation may no longer be managed according to its founder’s Christian principles. One day a week, for instance, the restaurant is closed: Sunday. Shareholders can vote for the corporation to begin Sunday hours of operation.
For this reason, the firm was never taken public during the founder’s lifetime. He instilled these same principles in his successors and even had them sign a pledge promising they would never take the firm public.
To preserve firm ownership.
The family is keen to retain control of the business. They don’t want to lose control of the firm or see their share value diminished by bringing in new investors. Since they have no plans to sell their stock to outside investors, they are able to maintain complete family control of the business.
Investors’ money is not needed.
A primary motivation for private enterprises to go public is the need to obtain capital to purchase machinery or open new markets. Therefore, they do Initial Public Offerings (IPOs) to raise capital from the public.
Chick-fil-A deserves credit for successfully managing the business in a manner that permits it to grow without the assistance of outside investors. In addition, by adopting a franchise structure, they are able to maintain oversight over the brand’s operations.
Who Owns Chick-fil-A?
Although S. Truett Cathy’s restaurant career began in 1946 with the opening of a little diner named the Dwarf Grill, the first Chick-fil-A wasn’t introduced to the public until 1967 at a shopping center in Atlanta. Despite Cathy’s death in 2014, the Truett family continues to run the Chick-fil-A empire.
Dan and Don Cathy, sons of Truett Cathy, are the current proprietors. Until last year, Dan Cathy served as CEO in his grandfather Andrew Truett Cathy’s place.
With 12 grandkids and 23 great-grandchildren, Cathy has left plenty of potential successors to carry on the family business.
How Successful Is Chick-fil-A?
Chick-fil-A, which offers only chicken-based dishes, ranked third in U.S. restaurant sales in 2019.
The menu is limited to several chicken preparations and signature waffle fries. But the firm’s commitment to its customers has helped it attract a steady stream of return customers despite its small menu.
A year ago, Chick-fil-A was voted the best fast food restaurant in the United States.
Revenues increased by 33.3%, and profits increased by a staggering 67.3% as the firm successfully negotiated the food service industry’s response to the COVID-19 epidemic.
Much of this came from payments made by franchisees, or “operators,” as Chick-fil-A calls them. The fast food chain has around 2,704 outlets as of the end of 2021. 2,235 of these Chick-fil-A restaurants were independently owned and operated by franchisees.
In 2021, franchised stores outside shopping malls in the United States brought in more than $8.1 million annual revenue.
That same year, revenues at the mall locations averaged over $3.2 million. Despite being closed on Sundays, Chick-fil-A managed to reach these sales goals. Not even McDonald’s can compare to Chick-fil-per-restaurant A’s profits in the fast food industry.
Tips for Making Money at Chick-fil-A
Although Chick-fil-A stock is not available to the general public, a select few have the opportunity to profit from the company by becoming franchisees or licensees.
Learn more about Chick-fil-franchise A’s program and product licensing possibilities below.
Franchise Operations at Chick-fil-A
Franchisees of Chick-fil-A do not own the restaurants they run for a profit, nor do they have any ownership stake in the company. They can’t sell it or give it to their kids since they don’t own the property.
Stores are franchised but remain Chick-fil-A property.
Only the most qualified operators are chosen from thousands of hopefuls to become franchisees. Franchises are not a good option for anyone looking for a passive income stream.
Operators who are actively engaged in the store’s day-to-day management are highly sought after by corporate.
The initial investment to open a Chick-fil-A restaurant is $10,000. After that, Chick-fil-A will foot the bill for everything else required to open a new restaurant. Because of this, many individuals can afford the investment needed to open a Chick-fil-A franchise.
The headquarters, however, takes a cut of the action for itself.
All Chick-fil-A franchisees are required to make the following monthly payments:
- 15% of gross receipts apart from the cost of renting a kitchen and other equipment.
- Additional running service fees equivalent to 50% of their store’s net earnings
- Land and/or retail space rent, if appropriate.
Because of this, opening a Chick-fil-A franchise may not be as profitable as one may expect.
Can We Expect an IPO from Chick-fil-A?
There is little chance of an initial public offering for Chick-fil-A in the near future. The corporation is still held privately, and its stock is not publicly traded.
Perhaps the founder never intended to sell public shares because doing so would require making changes to the firm that would go against the values held by the present owners, such as shutting down on Sundays.
A contract prohibiting the corporate office of Chick-fil-A from taking the fast food chain public is binding on the company’s leadership.
For the time being, anyone wishing to put money into fast food equities will have to go elsewhere, possibly to publicly listed corporations like McDonald’s Corp (MCD) or Wendy’s Co (WEN).
Conclusion: Is it Possible to Invest in Chick-fil-A?
It’s possible that Chick-fil-A sales climbed by $1.5 billion last year, but the fast food chain will not share any of that growth with its investors. As a result, you won’t be able to invest in Chick-fil-A for the foreseeable future.
If the firm continues to be successful under private hands, investors may never be able to acquire it.
You have to wait in line and cross your fingers at the corporate headquarters if you want to buy a Chick-fil-A franchise.
Not many people will be able to profit from Chick-fil-A as a franchisee due to the high level of competition involved.