Chick fil a Stock – Here’s What You Need to Know!

One of the largest chains of fast-food restaurants in the United States , Chick fil a stock specializes in chicken sandwiches. It has its headquarters in College Park, Georgia. 

As the founder, S. Truett Cathy, held Christian beliefs, many of the company’s values are influenced by these beliefs. One of these values was that the company’s restaurants remain closed on Sundays.  

It has grown to an enormous size, competing with McDonald’s and Dominos. This fact intrigues the investors to look for a chance to invest in this company, enquiring about the chick fil A stock price, chick fil A stock symbol, etc. Let us see the ways of investing in the company in detail.

Chick-fil-A: Beginning

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Cathy, the chain’s former Chairman and CEO, opened his first restaurant, the Dwarf Grill (now the Dwarf House), in 1946. Chick-fil-A was founded in 1961 as a result of Cathy’s discovery of a pressure-fryer (can cook chicken sandwiches faster than regular hamburgers). Cathy registered the Chick-fil-A trademark following this discovery.

Between 1964 and 1967, over fifty restaurants were serving the sandwich, including Waffle House and Houston Astrodome concession stands. 

In 1967, Chick-fil-A first opened a stand-alone outlet at the Greenbriar Mall food court, in a suburb of Atlanta. Further, this caused the sandwich to be removed from other restaurants. 

The Speciality: Chicken Sandwich

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It’s hard to choose between the chicken sandwich at Chick-fil-A and Popeyes; Popeyes has a pretty good recipe too, but Chick-fil-A gets the nod. This is because the serving takes place on toasted buttered buns with dill pickle chips, boneless chicken breast seasoned to perfection, freshly breaded and pressure cooked in 100% refined peanut oil.

The Mobile App

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During repeated market testing, Chick-fil-A’s app has proven to be the best around. Ordering, payment, and pickup are convenient, and there have been virtually no pickup issues reported. Although the rewards are pretty good, there aren’t any exclusive deals or coupons that you would miss out on if you didn’t use the app. Make sure you let the app know you’ll be there ahead of time to avoid waiting, especially during peak hours.

Chick-fil-A’s Recipe to Growth

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Chick-fil-A’s business strategy focuses on providing excellent customer service and promoting a small menu. Its business model remains focused on chicken sandwiches, despite competitors expanding their menu offerings to attract new customers. 

Each Chick-fil-A restaurant remains Chick-fil-A’s property. The company selects the location and builds each restaurant. To become an operator, Chick-fil-A franchisees need only $10,000 to invest. Operator selection takes place carefully, and the selected ones have to undergo a rigorous training program. This interview and training process can take months. 

The Reason for Popularity Among Investors

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500k customers gave Chick-fil-A the highest ratings in various categories, making it the number one restaurant brand in America for six straight years in the 2020 American Customer Satisfaction Index

Even when they are open only six days a week, Chick-fil-A generates higher revenue per location than any other food chain. Higher prices for the popular items on the menu is one of the reasons for higher profits. Chick-fil-A has relatively similar input costs as their competitors, but they have built up an enormous pricing power and demand, which allows them to earn fat profits. 

These facts create a great potential for the company to soar high on the stock markets, making investors intrigued for investing in the chick fil A stock. Unfortunately, you cannot invest in a chick-fil-A stock directly.

The Company’s top management has a conservative approach towards the work-culture of the company. This prevents the company from going public or accepting outside investors. The owners and top management are wary of the outside investors changing the rules of the company, which may go against their catholic beliefs. One such situation can be the tempting opportunity of opening restaurants on Sundays.  

However, there are other alternatives to earn money from the Quick Service restaurant businesses than a chick fil A stock. Let us discuss them in detail. 

Chick fil A Franchise

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Source: bizjournals.com

One of the key ways to earn money from the brand, Chick-fil-A, is to own its franchise. This is the best viable option available as the company is not public and is owned solely by the Cathy family. 

The cost to open a McDonald’s is about $1 million, and to open a Culver’s is $4 million. By contrast, Chick-fil-A covers all costs. It buys the property, builds the infrastructure, and provides the equipment, all for only $10,000. 

Franchises of Chick-fil-A are extremely profitable, but franchisees are not shareholders. To maintain central control over the company, Chick-fil-A constraints franchisees to own a maximum of one restaurant. An estimated 40,000 franchisee applications are submitted to Chick-fil-A each year, of which 100 to 115 are accepted. Thus, Chick-fil-A accepts a mere 0.2.5% of franchise applicants. This shows that it is even more difficult to get a Chick-fil-A franchise than getting admission into Harvard!, says The Washington Post’s article. 

It goes without saying that ordinary individuals cannot own a Chick-fil-A franchisee. Here is a solution to that problem.

Invest in the Competitors

McDonald’s

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Source: mcdonalsusa.com

Although Chick-fil-A is a lucrative business, it is not the only one that can be used by investors to earn huge profits. As of December 31, 2020, McDonald’s (MCD) reported annual gross profits of $11.115 billion, annual revenues of $21.077 billion, along with an operating income of $9.07 billion. 

McDonald’s seems to have the right ingredients in place to succeed. Same-store sales in the U.S. are rising, and promotional activity could support the growth. The international picture has improved, though COVID-19 could still present a challenge. The fast-food giant has traditionally had somewhat bland earnings and sales growth, but investors seem to be piqued by improving results. Its symbol is MCD on the New York Stock Exchange(NYSE).

As a proven money-maker that pays an attractive dividend, McDonald’s offers investors a good value. McDonald’s paid a dividend of $1.29 on November 30, 2020. Thus, MCD can serve as a good alternative to the chick fil a stock.  

Also Read: Options of Trading: Buy To Open vs. Buy To Close

Dominos

chick fil a stock

Source: Dominos.com

With a focus on one food, Domino’s replicates Chick-fil-A’s model of focusing on special food: pizza. 

As of December 31, 2019, Domino’s reported an annual operating cash flow of $496.96 million and an annual ending cash flow of $438.92 million. Domino’s reports an annual operating cash flow and gross profit of $629.41 million and $1.403 billion, respectively, again serving as a great alternative to a chick fil a stock.

Due to its quarterly dividends, Domino’s can be profitable for investors. Its symbol is DPZ on the New York Stock Exchange(NYSE).

Although the top competitors, Dominos and McDonald’s are not the only ones. There are other investment options for a chick fil a stock, such as Chipotle or KFC. 

Conclusion

Chick fil A stock has no stock price as it is not traded publicly. It is privately owned by the family members of its founder, S. Truett Cathy. These family members are his three sons, each holding a value of approximately $1.5 Billion, totaling the worth of the company to $4.5 Billion. It is famous for its catholic Christian beliefs and a work culture based on those beliefs. Despite being closed on Sundays, Chick-fil-A is one of the biggest fast-food chains in the United States.

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