Golden Chick Franchise Costs $821K – $1.9M (+ 2024 Profits)

Golden Chick is a distinguished name in the quick-service restaurant (QSR) industry, renowned for its delectable chicken, fresh salads, and an array of side dishes. The brand’s inception dates back to 1967 in San Marcos, Texas, marking the beginning of a journey that would see the franchise grow significantly over the years. 

Initially founded under the name “Golden Fried Chicken,” the brand transformed in 1993 to become Golden Chick, a move that signified a rebranding aimed at propelling the franchise into the future. This transition was accompanied by enhancements to both the menu and the aesthetic appeal of the restaurants, cementing Golden Chick’s place in the industry​​. Golden Chick’s corporate headquarters are located in Richardson, Texas.

Golden Chick distinguishes itself from its competitors through its commitment to quality and innovation, particularly with its Golden Tenders®. Made from whole chicken tenderloins and marinated for 24 hours, these tenders are a testament to Golden Chick’s dedication to providing the best possible product to its customers. The franchise’s menu also stands out for offering a variety of family-style meals and homestyle sides, differing from the typical fast-food offerings in the QSR industry​​.

Type of Expenditure	Amount (Free-Standing)
Initial Franchise Fees	$30,000
Site Evaluation Fee	$0 – $2,500
Other Site Selection Assistance	$0 – $1,000
Furniture, Fixtures, and Equipment	$250,000 – $425,000
Signs and Menu Boards	$50,000 – $100,000
Initial Training Costs (travel and living expenses)	$10,000 – $25,000
Computer & POS Systems	$3,000 – $42,500
Initial Inventory/Supplies	$15,000 – $20,000
Architect/Engineer Fees	$12,000 – $42,000
Site Preparations	$192,500 – $360,000
Construction and Finish-Out Cost	$615,600 – $820,800
Professional Services	$2,500 – $7,000
Insurance	$750 – $7,500
Additional Funds	$10,000 – $30,000
Total	$1,191,000 – $1,913,000

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Initial Franchise Fee

An initial franchise fee of $30,000 is payable upon the execution of the first Franchise Agreement. For the second and subsequent agreements, the fee is 60% of the current franchise fee, which is currently $18,000.

Royalty Fee

A Weekly Royalty Fee equal to 4% of the franchisee’s Gross Revenues is required. This fee is collected weekly.

Advertising Fees

• National Ad Fund: Up to 2% of Franchisee Gross Revenues, currently set at 1%.
• Co-op: 2% of Franchisee Gross Revenues for each Co-op designated for local, regional, and/or national purposes.

Transfer Fee

• Franchise Agreement: 20% of the then-current initial franchise fee for transfers to non-existing franchisees; 10% for existing franchisees.
• Development Agreement: 25% of the then-current development fee applicable to the number of Golden Chick Restaurants identified in the Development Schedule for which Franchise Agreements have not been signed.

Renewal Fee

An amount equal to 10% of the then-current initial franchise fee is required upon renewal.

Management Fee

If the franchise is managed by the franchisor or an affiliate, a fee of 0% to 2%-5% of Franchisee Gross Revenues is applicable.

Franchise Pros and cons

The Pros:

• Real estate and construction: The brand provides real estate advisors to help its franchisees with the site selection process, restaurant designs, lease negotiations, and structure of the restaurant from scratch or converting an existing building. This helps franchisees identify the most viable location and reduce construction costs.
• Franchise support: The brand provides managerial and operational support and resources to help franchisees with a proven business model. It offers professional guidance and advice to franchisees on implementing its success tips. Franchisees also connect with other franchise owners, who share ideas on what has worked in other locations.
• Field and ongoing support: The brand supports franchisees after the grand opening to ensure they succeed and grow. It assists franchisees to streamline cost management, quality assurance, and franchise operations through field directors’ visits so that they can grow and scale their profits.
• Pre-opening training and support: The brand has a comprehensive and simplified training program to help its franchisees get up to speed on establishing and running a successful business. It trains its franchisees in proprietary recipes, hospitality, hiring and managing highly skilled staff, and inventory management. They also help the franchisees with the grand opening.
• National supply chain: Golden Chick has a well-coordinated and online national supply chain. Franchisees can order food, equipment, and inventory online at reasonable commercial prices, saving on costs and maximizing efficient supply and quality controls.
• Exclusive territory: Franchisees can benefit from an exclusive market development program. The brand designates a specific location for franchisees to operate in. During the agreement, the franchisor does not authorize other franchisees or itself to operate other Golden Chick restaurants in the area.

The Cons:

• No financing: The franchisor does not finance franchisees directly or indirectly. The franchisees must find third-party financing for start-up costs, inventory, or trade fixtures.
• Competition: The Golden Chick franchise faces a lot of competition from leading brands in the chicken industry, such as Wingstop, Church’s Chicken or even KFC
• No absentee ownership: The Golden Chick franchise does not present a passive investment opportunity. Franchisees must be involved in the decision-making and daily operations of their restaurants.
• Not a part-time business: The brand does not provide a part-time business opportunity. Franchisees need to be open as per the parent company’s operating hours.

How to open a Golden Chick Franchise

Opening a Golden Chick franchise involves several steps, designed to ensure you are a good fit for the franchise. Here are the main steps to follow to open a Golden Chick franchise.

1. Initial Research and Inquiry

• Understand the Brand: Familiarize yourself with Golden Chick’s history, menu offerings, brand values, and customer base.
• Franchise Requirements: Investigate the financial requirements, including the initial investment, franchise fees, and ongoing royalties.
• Market Analysis: Conduct local market research to ascertain demand for a quick-service restaurant (QSR) and assess competition.

2. Submit a Franchise Application

• Initial Contact: Complete and submit a franchise application form through the Golden Chick franchise website to express your interest.
• Franchise Information: Receive detailed franchise information from Golden Chick, which may include their Franchise Disclosure Document (FDD).

3. Review Franchise Disclosure Document (FDD)

• Important Details: Thoroughly review the FDD to understand the legal, financial, and operational aspects of owning a Golden Chick franchise.
• Professional Advice: Consider consulting with a franchise attorney and a financial advisor to fully grasp the implications of the franchise agreement.

4. Attend Discovery Day

• Meet the Team: Golden Chick may invite you to a discovery day event, where you’ll meet the corporate team and gain deeper insights into the franchise system.
• Visit Locations: You might also have the opportunity to visit existing franchises to observe operations and speak with current franchisees.

5. Secure Financing

• Financial Planning: Based on the investment details in the FDD, determine your total required investment and explore financing options, including loans or partnerships.

6. Site Selection and Approval

• Location Scouting: Collaborate with Golden Chick to identify a suitable location for your franchise, considering factors like traffic patterns and local competition.
• Lease Negotiation: Once a potential site is identified, you may need to negotiate lease terms, with guidance or requirements provided by Golden Chick.

7. Training Program

• Comprehensive Training: Participate in Golden Chick’s training program to learn about business operations, food preparation, customer service, and marketing strategies.

Disclaimer

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

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