The pandemic has been weird for restaurant stocks. Large chain family-oriented places have seen a predictable downturn thanks to restrictions on in-house dining, but many fast food and other delivery places have seen a lot of increased activity.
Some of the best publicly traded restaurants in the world have managed to have a good run in the past 1-2 years.
Chick-fil-A is one of the most popular fast food brands in the US and has cultivated a loyal customer base thanks to its unique flavored chicken, strong customer service, and famous misspelling cow ads.
Chick-fil-A also has an estimated annual revenue of over $1 billion and it is estimated that it will become the 3rd largest fast food chain in the country by 2021, behind McDonald’s and Starbucks.
Many people wanting to invest in fast food might have their eye on Chick-fil-A stock.
So we put together this article on Chick-fil-A stock, whether you can buy it, and how you can profit from Chick-fil-A performance.
Can You Buy Chick-fil-A Stock?
The short answer is: no, you cannot buy Chick-fil-A stock. Chick-fil-A is not a publicly-traded company, so the owners do not sell equity in the form of shares.
In fact, before the original owner and founder passed away in 2014, he made his children and heirs to the company sign a contract that they would never go public with the company.
This means that the current owners cannot sell shares of the company to the public on the stock market.
Normally, taking a company public is a great way to drum up capital and spending for projects and expansion. But, going public also comes with a lot of downsides too.
When companies go public, the original owner might lose a lot of control over what happens, and they may be pressured by shareholders to take certain business actions.
With a publicly-traded company, it is possible that investors could practically take over the entire company, which would destroy Chick-fil-A’s unique business and cultural identity.
Clearly, staying private has not had much impact on Chick-fil-A’s growth (they manage to clear over $10 billion a year) so the owners do not feel any need to take the company public.
Unfortunately, that means that there is no way to invest in Chick-fil-A stock. It is a shame too because Chick-fil-A stock would do extremely well.
They managed to become one of the largest chains in the country with completely private ownership, so imagine how well they could do if they were publicly traded.
Who Owns Chick-fil-A?
Chick-fil-A was first founded way back in 1946 in Atlanta by a man named S. Truett Cathy. The company originally was run under the brand name Dwarf House and was known for its hamburgers and steaks.
There are still 12 named Dwarf House locations in the country where you can grab a burger or strip steak.
Dwarf House changed names to Chick-fil-A in 1967 and switched the menu focus to their most popular item, the chicken sandwich.
Today, the chicken sandwich and waffle fries combo is one of the chain’s most popular items, responsible for approximately 50% of revenue.
The name “fil-A” part of the name is a play on the words “fillet” and “Grade A” quality meat.
Cathy was a devout Christian and is the reason why Chick-fil-A is never open on Sundays, a tradition that has continued to this day.
That’s kind of inconvenient news if you want one of their sandwiches after church service!
In 2014, S. Truett Cathy passed away and ownership of the company passed to his heirs. The current Chairman and CEO is Dan Cathy and the Vice President is Bubba Cathy.
Chick-fil-A’s ownership is entirely in the Cathy family and no one else has any controlling say in how the company operates.
Chick-fil-A is a remarkably successful company, but they have not been without controversy.
The company has come under public scrutiny due to its history of donating to charities whom critics say contribute to anti-LGBT causes.
Cathy himself had also made several public statements declaring his beliefs that same-sex marriage is immoral. Chick-fil-A has since said that they no longer donate to such organizations, but some people question the veracity of their claim.
However, despite these controversies, the company has managed to generate an enormous amount of goodwill.
Chick-fil-A is known for donating leftover food to local charity programs and the company has been known to provide free food to the public during crises or emergencies.
Many people also greatly appreciate the publicly professed Christian values of the owners.
Chick-fil-A Stock Price?
Since Chick-fil-A is not a publicly-traded company, it does not have a ticker symbol or stock price. As such, Chick-fil-A doesn’t have a stock price.
Unfortunately, it is unlikely that Chick-fil-A will ever go public. The founder made his heirs sign a contract forbidding them from doing so, and the current owners have repeatedly expressed their wishes to keep the company entirely in the hands of the family.
One of the major reasons the company will not go public is that they do not want the interest of shareholders to impinge on the company’s Christian values.
For example, if the company went public and the Cathy family lost control, those in control could start opening on Sundays.
That does not mean that there is no way to profit from Chick-fil-A, however, You can still make money off the business by opening a franchise location.
For $10,000, you can open a franchise and profit from the company’s activities. $10,000 sounds like a lot at first but that is dirt cheap compared to some other companies.
For example, franchising costs for McDonald’s is around $1 million.
The company does limit franchising though. Franchise owners can only operate one location and they must abide by strict company policy and inspections.
There is a very good reason why Chick-fil-A has received praise for its friendly staff and smooth operation; the company takes these values incredibly seriously.
This is why they limit franchising to one location. They want owners to focus on one store and make it the best possible.
Franchising is very profitable as well. According to data from Franchise City, the average Chick-fil-A franchise owner can pull in around $200,000 a year.
That is a pretty sweet ROI if you ask us. The only tricky part is the Chick-fil-A is highly selective about franchise owners.
About 20,000 people inquire to become franchise owners each year, but only about 80 actually get selected. That’s less than half a percent of inquiries.
Either way, the super cheap costs are a major reason to check out franchising opportunities for Chick-fil-A. Given that the average fast food franchise cost is about $30,000, the $10,000 bill for Chick-fil-A is way more tolerable (and probably more profitable as well!).
The one major downside is that the higher-ups take a pretty big chunk of any location revenue. Chick-fil-A will take 15% of all monthly sales, which is almost 3 times higher than most other fast food franchises.
Chick-fil-A has to take this chunk because they want to make back their investment. Normally, when you open a franchise, the company requires the franchise owner to cover the cost of real estate and materials.
This is one reason why most franchise programs require you to have liquid cash reserves.
Chick-fil-A covers all those start-up costs and only makes you pay the initial $10,000 franchising fee, so they need to take a larger portion of monthly sales to recoup those costs.
To put things into perspective, it can cost up to $2 million to get a single Chick-fil-A location up and running, so the company is definitely going to get its return on that investment.
How Much is Chick-fil-A Worth?
Chick-fil-A’s estimated net worth is about $15 billion. The average Chick-fil-A unit (store) pulls in around $4 million in revenue each year, which is way higher than most other chains.
Overall, there are much fewer Chick-fil-A locations than other major chains like McDonald’s or Wendy’s but each individual Chick-fil-A location pulls in a huge amount of money.
That is why you always see the line for the drive-through spilling out into the road and around the block. The company CEO Dan Cathy has an estimated net worth of $6.06 billion.
Chick-fil-A manages to pull in huge profits but also manages to treat workers fairly. Average hourly wages for positions are much higher than the industry average, and full-time employees are eligible for health, vision, and dental insurance.
Full-time employees are also eligible for short and long-term disability insurance. Employees also get employer-provided pension plans for retirement.
According to many sources, Chick-fil-A spends a lot of time training employees and invests a lot in them.
Chick-fil-A also manages such high revenue and profit margins because their food is a bit more expensive than the average fast food joint.
For example, the average cost of a Chick-fil-A sandwich is about $6 and a combo meal with fries and a drink can cost between $10-$14.
Other places like McDonald’s or Burger King have dollar menus so it’s less likely they will hit such high revenue targets.
Of course, Chick-fil-A can only afford to sell their chicken so high because it’s really good and people absolutely adore it.
Chick-fil-A Competitors You Can Invest In
MCD – McDonald’s
Almost everyone in the world has heard of McDonald’s and probably no other fast food chain has as much name brand recognition as this burger giant.
McDonald’s stock is pretty much always a good buy, especially in the past year thanks to several successful product launches.
McDonald’s stock has been trending recently because the company will soon unveil their online MyMcDonald’s loyalty program in late 2021.
Like all restaurants, McDonald’s stock took a hit the past year due to COVID, but the company managed to recover and still manages well thanks to online and delivery sales.
YUM – Yum! Brands
Yum! Brands is the conglomerate owner behind national fast food chains KFC, Pizza Hut, and Taco Bell. Collectively. Yum! Operates over 50,000 locations in over 150 countries.
Yum! has completely managed to recover its pandemic losses and has recently hit an all-time high at over $120 a share.
Yum! has seen revenue losses the past 2 years due to re-franchising efforts, but the company’s P/E multiple has been steadily rising in tandem. Q3 2020 saw a great recovery for Yum! stock after switching to a delivery model.
QSR – Restaurant Brands International
QSR is the conglomerate behind Burger King, Tim Hortons, and Popeyes, among other chains. The company operates over 27,000 locations in 100 countries.
QSR stock has been showing great short-term signals lately with strong revenue generation from their major brands and good dividend payouts.
SHAK – Shake Shack
Shake Shack is another retail investor favorite for a while and still is a good buy, despite a handful of recent problems.
Shake Shack saw Q1 2021 revenue drop due to shortfalls from switching over to a digital model.
Online and digital sales have been growing rapidly so it is likely that the company will present much better revenue figures for Q2 and Q3 2021.
CMG – Chipotle
Chipotle stock has skyrocketed in the past 6 months due to excellent earnings over the back half of 2020. Share prices are up nearly 50% from last year and sales and revenues remain incredibly high.
Chipotle’s digital platform and delivery services have been credited with the excellent performance through the pandemic, and the stock is an excellent buy going into the near future.
Can You Buy Chick-fil-A Stock? Final Thought
Ultimately, no, you cannot buy Chick-fil-A stock and it is unlikely you ever will be able to. The company will remain in private hands for the foreseeable future.
But, you can still profit off of Chick-fil-A by opening a franchise location.
- See How The 1% ACTUALLY Builds Wealth
- 4 Cryptos That Are Screaming Buys. Rare setup in the crypto markets could send them soaring
- Motley Fool Issues Rare “All In” Buy Alert! All In Stock Buy Signal Has Beaten The Market By 6X
- Millennial Millionaire: What most people over 50 don’t understand about stocks