Huntsville/Madison Development News (County Line: high school, restaurants, grocer)

[TN2HSV]

Originally Posted by bmrisko

I got some insider info 2nd hand from someone who oversees CFA franchises in the area and at the time CLR did not have the sustained all-day traffic volume that CFA looks for in a location. Same goes for Madison Blvd.

Their volume requirement must be a LOT higher than other fast foods (Sonic, DQ, McD's, etc.) Guess that's why they are always so busy!!! If a place is busy, people think it's something great and want to go get some themselves. If it's not so busy, the cache wears off. Guess that's why CFA likes to keep their stores insanely busy all the time. Not a bad strategy, but a pain for customers.

[dijkstra]

Originally Posted by TN2HSV

Their volume requirement must be a LOT higher than other fast foods (Sonic, DQ, McD's, etc.) Guess that's why they are always so busy!!! If a place is busy, people think it's something great and want to go get some themselves. If it's not so busy, the cache wears off. Guess that's why CFA likes to keep their stores insanely busy all the time. Not a bad strategy, but a pain for customers.

Well I would think it is really because of all the strict requirements they put on franchisees. I read their requirements once just out of curiosity and while their upfront entry costs are cheap at only $10,000 for a franchise, they really rip the franchisee a new one over the long haul. Chik fil A picks the location, buys the land and builds the building and then leases the property to the franchisee. So the franchisee basically pays the loan for them and Chik fil A builds equity in the property plus it will increase in value. Then Chik fil A charges I believe 15% right off the top and then 50% of profit. LOL! Then they do not allow the restaurant to be open on Sunday which is often one of the busiest days for restaurants so there went potential profit. They also typically do not allow a franchisee to operate more than one location which basically makes it so they almost have to work in the store themselves regularly and they pretty much pressure them to be involved in community activities as well as church.

So anyway, after all that rambling, my point is that for their system to work and keep the franchisees under their thumb the way they want, they have to limit the amount of stores in an area and keep them busy otherwise, the franchisees would not make any money. If you are wondering why I called them "franchisees" through all of this instead of the owner, it is because they are not owners......they really own nothing.

[TN2HSV]

Originally Posted by dijkstra

Well I would think it is really because of all the strict requirements they put on franchisees. I read their requirements once just out of curiosity and while their upfront entry costs are cheap at only $10,000 for a franchise, they really rip the franchisee a new one over the long haul. Chik fil A picks the location, buys the land and builds the building and then leases the property to the franchisee. So the franchisee basically pays the loan for them and Chik fil A builds equity in the property plus it will increase in value. Then Chik fil A charges I believe 15% right off the top and then 50% of profit. LOL! Then they do not allow the restaurant to be open on Sunday which is often one of the busiest days for restaurants so there went potential profit. They also typically do not allow a franchisee to operate more than one location which basically makes it so they almost have to work in the store themselves regularly and they pretty much pressure them to be involved in community activities as well as church.

So anyway, after all that rambling, my point is that for their system to work and keep the franchisees under their thumb the way they want, they have to limit the amount of stores in an area and keep them busy otherwise, the franchisees would not make any money. If you are wondering why I called them "franchisees" through all of this instead of the owner, it is because they are not owners......they really own nothing.

Interesting. Thanks!

[djmaxwell]

Originally Posted by dijkstra

keep the franchisees under their thumb the way they want,

Nobody's forcing them to be a franchisee, so it isn't like they are being oppressed.

[lindy112]

Originally Posted by dijkstra

Well I would think it is really because of all the strict requirements they put on franchisees. I read their requirements once just out of curiosity and while their upfront entry costs are cheap at only $10,000 for a franchise, they really rip the franchisee a new one over the long haul. Chik fil A picks the location, buys the land and builds the building and then leases the property to the franchisee. So the franchisee basically pays the loan for them and Chik fil A builds equity in the property plus it will increase in value. Then Chik fil A charges I believe 15% right off the top and then 50% of profit. LOL! Then they do not allow the restaurant to be open on Sunday which is often one of the busiest days for restaurants so there went potential profit. They also typically do not allow a franchisee to operate more than one location which basically makes it so they almost have to work in the store themselves regularly and they pretty much pressure them to be involved in community activities as well as church.

So anyway, after all that rambling, my point is that for their system to work and keep the franchisees under their thumb the way they want, they have to limit the amount of stores in an area and keep them busy otherwise, the franchisees would not make any money. If you are wondering why I called them "franchisees" through all of this instead of the owner, it is because they are not owners......they really own nothing.

We have a good friend who went through the whole process but, in the end, he turned down the franchise because CFA would only award him one if he retired from the Army and our friend wasn't ready to do that yet. The selection process takes at least a year and there are many levels of interviews. You are right in that the franchisee never really owns the business. In fact, if they decide they no longer want to run the store, they just walk away and CFA passes it on to someone else.


Once you've been selected as a franchisee, you're giving 3-4 location options (don't remember if you get to at least choose the geographic area or not). If none of them are appealing to you and you say "no thanks," it's over .. you have to start the process all over again.

[dijkstra]

Originally Posted by djmaxwell

Nobody's forcing them to be a franchisee, so it isn't like they are being oppressed.

You are absolutely correct. My point is that as a franchisee for CFA, you are really just their ***** not an actual business owner. You have every opportunity to take it or leave it but there are a hundred other ways to make more money as an entrepreneur while making your own decisions and making far better income. To each his own though.

Originally Posted by lindy112

We have a good friend who went through the whole process but, in the end, he turned down the franchise because CFA would only award him one if he retired from the Army and our friend wasn't ready to do that yet. The selection process takes at least a year and there are many levels of interviews. You are right in that the franchisee never really owns the business. In fact, if they decide they no longer want to run the store, they just walk away and CFA passes it on to someone else.


Once you've been selected as a franchisee, you're giving 3-4 location options (don't remember if you get to at least choose the geographic area or not). If none of them are appealing to you and you say "no thanks," it's over .. you have to start the process all over again.

That is exactly it, they call all the shots and you really just have to follow along. Some may consider it an opportunity because you somewhat are self-employed. However, you really are on their chain.


I have wondered what kind of income a CFA franchisee actually makes (their share of the profits) because it if it is less than $250,000 a year minimum, CFA is really sticking it to them. They own everything, so when you decide to retire, you basically have equity in nothing......you don't actually have a business to sell.

[Tourian]

It is called risk/reward. When is the last time you have seen a CFA close? For someone who just wants to dabble and make a safe investment it is an easy win without a lot of stress.

For others...you can go all in with a Wall Street Deli, Roly Poly Sandwiches or a Quiznos or whatever a risk it with a brand that might not make it through no fault on your own.

Not being open on Sunday is a positive quality to many people. If you don't like their terms you can bounce.

[TurkeyRuben]

Talk to Norman Dull at the Madison location AND THEN make your subjective statement that it's an "easy investment without a lot of stress."

[dijkstra]

Originally Posted by Tourian

It is called risk/reward. When is the last time you have seen a CFA close? For someone who just wants to dabble and make a safe investment it is an easy win without a lot of stress.

For others...you can go all in with a Wall Street Deli, Roly Poly Sandwiches or a Quiznos or whatever a risk it with a brand that might not make it through no fault on your own.

Not being open on Sunday is a positive quality to many people. If you don't like their terms you can bounce.

I currently own and have owned multiple businesses one of which was a restaurant. The restaurant business is by far the most stressful, annoying, time consuming and hardest to make a profit of anything I have ever been involved. It wasn't Chik Fil A but it is still the same business of selling people products that only totals to less than $10 per person with low margins. Your overhead is a huge burden to overcome which means you have to herd a ton of people through the place because you are only really make $2 or $3 off each one at best. It doesn't help that you are trying to find employees at basically minimum wage and fast food used to use a lot of teenagers but now they are so lazy and have such poor work ethic, finding one that will show up and not move at a snails pace or stay off their phone long enough to take an order is almost like finding a unicorn. lol The labor force for manual labor right now just plain sucks.

Not being open on Sunday adds to the burden to overcome the overhead as well as Chik Fil A being elbow deep in your pockets. I looked at their terms and I did "bounce" right on my way and didn't consider it again. lol

Originally Posted by TurkeyRuben

Talk to Norman Dull at the Madison location AND THEN make your subjective statement that it's an "easy investment without a lot of stress."

Exactly, really pick any Chik Fil A franchisee and pick their brain.

[Tourian]

So you understand that a CFA has a leg up on the competition in that you are virtually guaranteed a successful franchise. They keep a lot off the top for the price of that. They teach you how to do it. Train you how to do it. And you agree to do it their way or you don't run one if their stores. Not being open on Sunday is not going to keep you from being successful. That's really all there is to it.