Dive Brief:
- Chick-fil-A is shifting its nontraditional restaurant model and will convert a significant portion of its licensed locations to owner-operator led restaurants, the company said on its website Wednesday.
- The company will shift its college campus and other nontraditional locations to the model over the next few years, but airport locations won’t be impacted.
- Chick-fil-A said the change will improve the guest experience by allowing guests to use Chick-fil-A’s app, Chick-fil-A One Membership program and redeem branded gift cards at these locations. Team members will also be able to access Chick-fil-A’s scholarship program.
Dive Insight:
The licensed model allowed food service providers and self-operated food service providers in colleges, airports, healthcare facilities and other venues to open branded Chick-fil-A locations. However, these locations typically offer limited menu options and have lower unit volumes compared to traditional franchised-owned locations.
Licensed campus units have average sales volume just shy of $1.4 million, compared to over $9 million for traditional Chick-fil-A locations according to Chick-fil-A’s franchise disclosure document; locations in airports, hospitals and other businesses have a roughly $3.5 million AUV. The ability to access Chick-fil-A branded assets could help the nontraditional units grow average unit volumes over time.
The fast food chain had 425 licensed units in the U.S. as of the end of 2024. A majority of those units (312) are on college or university campuses and have been open for at least one year, while 97 are at airports, hospitals and other businesses, according to its FDD. Comparatively, Chick-fil-A has over 2,600 franchised locations nationwide.
“We are excited about this next chapter and believe our local ownership business model will allow us to serve and care for guests and extend the great food and hospitality of Chick-fil-A in more places, for many years to come,” the company said.
