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re: Chick-Fil-A Operator Income
Posted on 3/21/17 at 2:13 pm to LSUFanHouston
Posted on 3/21/17 at 2:13 pm to LSUFanHouston
its stupid with chick fil a model in particular, but the store itself would easily net the owner $200k in any other franchises model with the particular traffic the store I was mentioning had. Mea Culpa on not knowing chick fil a had a completely different franchise model than everyone else, that one was on me. The rest of these guys who have never run a small business are all talking out of their arse.
Posted on 3/21/17 at 3:30 pm to dabigfella
Yeah, they are a totally different kind of animal - in many ways.
CFA locations especially in high traffic area sure seem to print money. Not uncommon to see 20-30 cars in drive thru at lunch hour and get through the line in 5 min. Their prices are not very cheap, either - especially for fast food. Plus, I would imagine their labor costs are pretty high compared to other fast food places. There are always a ton of employees in the store, and given the, shall we say, demeanor of the employees, my guess is that they pay them a little better as well.
CFA also has a relatively stream-lined menu which certainly helps turnaround and out the window time.
Kind of spitballing here... but I could easily see a "busy" store running 2500 individual orders a day through. (i.e. an individual order being one combo meal, for example). Avg selling price of say $6 per meal would mean $15,000 a day in sales. If they could keep labor to 20 percent and food/materials to 30 percent, you would be looking at $7,500 a day before overhead, PPE, royalty/advertising fee, and owner draw. If you could keep that to 35% of gross - a reasonable assumption, I think, you would be looking at another $5,250, which puts you cash flowing $2,250 a day. 6 days a week gets us $13,500 a week, gets you about $700K a year in cash flow.
I think the difference in our completely hypo example are two-fold... 1) the CFA "experience" doesn't come in a true franchise way, and 2) with the CFA model, all the risk is with CFA, none with the franchise. If you are as successful in business as you say you are... you fully understand how risk is rewarded.
CFA locations especially in high traffic area sure seem to print money. Not uncommon to see 20-30 cars in drive thru at lunch hour and get through the line in 5 min. Their prices are not very cheap, either - especially for fast food. Plus, I would imagine their labor costs are pretty high compared to other fast food places. There are always a ton of employees in the store, and given the, shall we say, demeanor of the employees, my guess is that they pay them a little better as well.
CFA also has a relatively stream-lined menu which certainly helps turnaround and out the window time.
Kind of spitballing here... but I could easily see a "busy" store running 2500 individual orders a day through. (i.e. an individual order being one combo meal, for example). Avg selling price of say $6 per meal would mean $15,000 a day in sales. If they could keep labor to 20 percent and food/materials to 30 percent, you would be looking at $7,500 a day before overhead, PPE, royalty/advertising fee, and owner draw. If you could keep that to 35% of gross - a reasonable assumption, I think, you would be looking at another $5,250, which puts you cash flowing $2,250 a day. 6 days a week gets us $13,500 a week, gets you about $700K a year in cash flow.
I think the difference in our completely hypo example are two-fold... 1) the CFA "experience" doesn't come in a true franchise way, and 2) with the CFA model, all the risk is with CFA, none with the franchise. If you are as successful in business as you say you are... you fully understand how risk is rewarded.
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