Chick-fil-A Stock: 5 Great Fast-Food Investments

Chick-fil-A stock is worth $4.5 Billion. But it has no stock symbol & is not on the stock market. Here are 5 ways you can profit from Chick-fil-A

Unfortunately, you cannot buy Chick-fil-A stock. Chick-fil-A is a privately held company, meaning it does not trade on any stock exchange and has no stock ticker symbol or stock price.

Learn about Chick-fil-A, its history, its success, and five great investing alternatives.

Chick-fil-A Stock: 5 Great Fast-Food Investments
Chick-fil-A Stock: 5 Great Fast-Food Investments

Note: This is an unbiased research report. The author or Liberated Stock Trader is not affiliated, paid by, or owns stock in any of the companies mentioned in this report. 

Chick-fil-A Stock

There is no Chick-fil-A stock available to purchase on any stock exchange in the USA or internationally. Chick-fil-A is not traded on the stock market because it is a privately held company.

Chick-fil-A Net Worth

The value of Chick-fil-A stock is estimated at $4.5 Billion, and the shares are divided among the three sons of the founder Samuel Truett-Cathy. It is possible to share in the success of Chick-fil-A through a franchise or merchandising.

It is easy to see why investors are interested in Chick-fil-A. Yet Chick-fil-A offers no stock and has no plans for an IPO anytime soon. Chick-fil-A founder S. Truett Cathy wanted to keep total control of his company. Cathy was a devout Christian who feared going public could force Chick-fil-A’s management to make decisions that violated his faith. Cathy’s heirs are family members who share his faith and want to follow Truett’s wishes.

Outsiders that do not share the Cathy family’s beliefs could take control by buying stock. The family fears that new shareholders could influence the company’s running, which might not align with the founder’s Christian values; new managers could open Chick-fil-A stores on Sunday, for instance.

Chick-fil-A Stock Symbol

Chick-fil-A does not have a stock ticker symbol because it is not traded on any stock exchange. If Chick-fil-A became a publicly-traded company, it would have a stock symbol.

Chick-fil-A’s Stock Price

Chick-fil-A is not currently floated on a stock exchange, so it does not have an official stock price for public investors. However, the company is worth $4.5 billion. The current stock is divided among the three sons of the founder Samuel Truett Cathy, meaning each share of the business is worth $1.5 billion.

Chick-fil-A IPO?

There is no formal announcement of a Chick-fil-A IPO. Chick-fil-A could easily go public, netting the current shareholders a fortune, because the company’s profits and brand are in great shape.

The Cathy family could sell out, or events could force Chick-fil-A to hold an IPO at some point. For example, further lengthy Covid-19 lockdowns could adversely impact the company’s debt, and it could seek funding through an IPO.

An initial public offering (IPO) can bring new management to Chick-fil-A that could change its lucrative business model. Chick-fil-A is in a position to borrow enormous amounts of money to pay for expansion without an IPO.

An IPO for Chick-fil-A IPO is improbable under current circumstances.


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Why is Chick-fil-A popular?

The chicken sandwich emporium Chick-fil-A has become one of America’s best-loved and most popular restaurant brands.

Chick-fil-A was named the number one restaurant brand in America for six straight years in the American Customer Satisfaction Index. A half-million customers gave Chick-fil-A the highest ratings in categories such as food quality, accuracy, speed of service, and mobile app reliability.

Chick-Fil-A received the highest score, 84 out of 100, on the American Customer Satisfaction Index. According to Forbes, Chick-fil-A received four more points than its closest rival, Chipotle (CMG). Chick-Fil-A’s Index rating exceeds that of the best full-service restaurant chain, LongHorn Steakhouse.

Chick-fil-A’s Company Performance

Chick-fil-A’s sales are over 50% higher than McDonald’s (MCD) sales. Chick-fil-A’s sales grew by 13% between 2019 and 2020, Restaurant Business claims. Chick-fil-A reported $11.32 billion in sales in 2019.

Chick-fil-A overtook Subway and Yum Brands’ subsidiary (YUM) Taco Bell to become America’s third-largest fast-food chain in 2018. Chick-fil-A operated 2,470 restaurants in the United States in 2019.

Americans love Chick-fil-A. In 38 US states, Chick-fil-A’s stores report the highest foot traffic in the fast-food industry.

Chick-fil-A’s Competition

Chick-fil-A became the biggest threat to McDonald’s in the fast-food industry in 2018. Chick-fil-A is a greater threat to McDonald’s than rival burger chains Wendy’s (NASDAQ: WEN) and Burger King. Chick-fil-A is a greater threat to McDonald’s than Yum Brands (YUM), the owner of Kentucky Fried Chicken and Taco Bell.

Chick-fil-A will not take McDonald’s place as America’s fast-food leader anytime soon. McDonald’s (NYSE: MCD) is so big it could take Chick-fil-A 21 years to surpass it at the 14.2% 2018 growth rate.

Chick-fil-A threatens McDonald’s because it targets the family market. Maze notes that Chick-fil-A achieved a 13% growth rate without resorting to the massive discounts at McDonald’s, Subway, Taco Bell, Kentucky Fried Chicken, and Burger King.

A typical Starbucks (SBUX) coffee shop generated $945,270 in sales in 2017. The average Subway sandwich shop generated $416,860 in sales in 2017. A typical Chick-fil-A store’s revenues are almost four times greater than the ordinary Subway franchise.

Why Chick-fil-A Makes So Much Money

Chick-fil-A makes more money because it charges more for its higher-quality food. A Chick-fil-A sandwich costs $6 in many areas.

McDonald’s, in contrast, relies heavily on its Dollar Menu, while Burger King advertises two-for-one deals. Many Subway franchise operators complain they cannot make money because of the company’s deep discounts.

Chick-fil-A generates enormous amounts of money by refusing to engage in standard fast-food industry practices. I think Chick-fil-A could be immune to some of the problems afflicting the fast-food industry because of its unique business model.

Chick-fil-A could afford to pay higher wages and comply with $15 an hour minimum wage requirements because it makes more money. Many American communities require a $ 15-an-hour minimum wage for all workers.

Some fast-food operators, including McDonald’s, face pressure to unionize because of low wages and poor working conditions. Chick-fil-A can reduce unions’ appeal with better working conditions and higher wages.

Why Chick-fil-A closes on Sunday

Chick-fil-A stores famously close on Sunday because Cathy believed operating on Sunday violated his faith. Most American fast-food restaurants operate on Sundays.

Closing on Sunday reduces Chick-fil-A’s expenses and can attract many customers. Pew Research classifies 25.4% of Americans as Evangelical Christians. Many Evangelical Christians believe working on Sunday is sinful.

Many Americans do not share the Cathy Family’s beliefs. Pew classifies 22.8% of Americans as religiously unaffiliated, 3.1% as atheists, 4% as agnostics, and 15.8% of Americans describing their faith as “nothing in particular.” By adding Pew’s numbers, I classify 45.7% of Americans as secular or non-religious.

Chick-fil-A’s growth shows most Americans do not care about fast-food operators’ faith. Chick-fil-A has faced opposition in some areas because of the Cathy family’s reputed hostility to gay people. Current Chick-fil-A Chairman Dan Cathy has expressed opposition to same-sex marriage.

Sunday closure can help Chick-fil-A attract higher quality employees by guaranteeing workers one day off a week, Entrepreneur writer Matthew McCreary speculates. Closing on Sunday could create cravings that send hungry people to Chick-fil-A’s-drive-through on Monday.

 

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5 Ways to Invest in Chick-fil-A Stock

Chick-fil-A is not a realistic direct stock investment because the stock is not available publicly. But there are five ways you can invest in the success of Chick-fil-A; you can open a Chick-fil-A franchise or invest in any of its four main competitors.

That means you will need to look for similar companies to Chick-fil-A. There are some publicly traded companies with similarities to Chick-fil-A.

1. Buy A Chick-fil-A Franchise

Until they offer a Chick-fil-a stock, you can buy a Chick-fil-A franchise for $10,000 ($15,000 in Canada).

A Chick-fil-A franchise is attractive because the company covers all the startup costs. It buys the real estate, constructs the building, and finances the equipment. In contrast, it costs $1 million to start a McDonald’s and $4 million to open a Culver’s restaurant.

A Chick-fil-A franchise is incredibly profitable, but franchisees receive no equity in the company. Chick-fil-A restricts franchises to owning just one restaurant to maintain central control over the company. Thus, Chick-fil-A discourages the purchase of its restaurants by investors and speculators.

It is hard to buy a Chick-fil-A franchise. Business Insider claims Chick-fil-A receives 20,000 franchisee applications a year and accepts only 70 to 80. Chick-fil-A approves only 0.4% of franchise applicants, Entrepreneur claims.


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2. Buy Chipotle Mexican Grill (CMG)

Writers credit Chipotle Mexican Grill (NYSE: CMG) with creating the popular fast-casual dining concept.

Chipotle copies Chick-fil-A’s business model of sticking to high ethical standards, selling only a few high-quality products, and charging higher prices for its products. Like Chick-fil-A, Chipotle concentrates on two specialty products: burritos and tacos.

Chipotle Stock Price 2017 to 2023
Chipotle Stock Price 2017 to 2023

View the Chipotle Chart Live in TradingView

Both the Chipotle and Chick-fil-A management teams try to follow high ethical standards. Chipotle only uses natural ingredients and meat from ethically-raised animals such as free-range pigs and chickens. Chick-fil-A closes on Sundays and pays its employees higher wages. Chipotle offers higher wages and English classes for Spanish-speaking employees.

Chipotle (CMG) has experienced enormous success. It operates over 2,000 locations in the United States, Canada, Germany, and France.

Investors love Chipotle; they paid over $1,400 for its shares in 2023. Unlike Shake Shack, Chipotle can make money. Chipotle reported an annual operating income of over $900 million with a profit margin of over 11%.

Chipotle targets one of Chick-fil-A’s key markets: families. Many families buy Chipotle burritos as their weekly takeout meal.

3. Buy McDonald’s (NYSE: MCD)

The original fast-food giant McDonald’s (MCD) is still a lucrative company. McDonald’s reported over $6.2 billion in profits for 2022 and has an industry-leading profit margin of 33%, according to Stock Rover.

McDonald’s founder Ray Kroc created the franchising model that powers Chick-fil-A’s expansion. The McDonald’s corporation carefully chooses franchisees and owns the restaurants, real estate, and equipment.

That franchising strategy gives McDonald’s enormous amounts of assets it can borrow against – in the form of land. This business model allows McDonald’s and Chick-fil-A to pick the franchises most likely to succeed. Kroc’s franchising strategy allows McDonald’s and Chick-fil-A to quickly fire bad or incompetent franchisees.

McDonalds Stock Price 2017 to 2023
Mcdonald’s Stock Price 2017 to 2023

View the McDonald’s Chart Live in TradingView

This allows McDonald’s to put experienced fast-food managers and people willing to devote all their time and effort to managing the franchise in charge of its stores. Chick-fil-A uses the same strategy to ensure high-quality franchisees.

Most of McDonald’s sales growth has occurred outside the United States. McDonald’s US revenues and sales have fallen for several years.

McDonald’s has difficulty competing in the United States because many Americans view its food as cheap and low-quality. Many middle and upper-class Americans refuse to eat at McDonald’s because they view it as a restaurant for poor people.

Skeptical analysts think deep discounting, and specials drive McDonald’s American sales. McDonald’s faces enormous competition from fast-casual and high-quality restaurant chains such as Chick-fil-A, In-N-Out Burger, Chipotle, and Shake Shack.

Another problem for McDonald’s is that the focus of fast food is changing from a quick lunch for factories and office workers to takeout food. Many customers want a complete meal for the whole family, such as a pizza or Chipotle burrito.

Another trend that hurts McDonald’s is the demand for ethical food that matches’ diners’ values. Chipotle’s ethical meats and Chick-fil-A’s Sunday closures are value signals that allow those chains to charge higher prices.

McDonald’s has a reputation as an unethical company that treats employees and customers poorly and serves cheap, tasteless, and unhealthy food. This reputation is undeserved but widespread.

McDonald’s is a good value investment because it is a proven moneymaker that pays a high dividend. McDonald’s will pay a quarterly dividend of $1.29 on November 30, 2020. Dividend.com credits McDonald’s with 12 years of dividend growth.

4. Buy Domino’s Pizza (NYSE: DPZ)

Domino’s (DPZ) is America’s most-successful standalone pizza chain, with 17,100 franchises in over 90 countries, with over 6,126 stores in the United States.

Domino’s follows Chick-fil-A’s strategy of concentrating on one food: pizza. Domino’s is successful because it specializes in takeout and delivery.

Domino’s has grown fast as women stopped cooking and went to work. Domino’s is positioned to cash in coronavirus because it can deliver hot food (pizzas) that nobody but the cook touches to customers’ doors.

Dominos Pizza Stock Chart 6-Years to 2023
Dominos Pizza Stock Chart 6-Years to 2023

View the Dominos Chart Live in TradingView

Parents who spend all their time remote working and educating kids can order a pizza to avoid cooking. Pizza is popular because it is one food most kids will eat. Domino’s competes with Chick-fil-A in the family dining market.

Domino’s makes money; it reports an annual operating income of over $350 million with a profit margin of 9% in 2022. With a 2022 PE Ratio of 27, Dominos is overpriced.

However, Domino’s can be a good stock for investors because it pays an annual dividend of 1.3%.

5. Don’t Buy Shake Shack (NYSE: SHAK)

The closest American company to Chick-fil-A is California’s In-N-Out Burger. In-N-Out Burger only sells a few products; burgers, shakes, and fries, just as Chick-fil-A only sells chicken sandwiches.

By concentrating on a few products, In-N-Out Burger achieves a high level of quality. The high quality allows In-N-Out-Burger to sell burgers and fries at a high price. In-Out-Out-Burger has a cult-like following that rivals Chick-fil-A’s. In-N-Out Burger always appears among the American fast-food restaurants with the highest ratings for service.

Shakestack's Stock Price has been battered in 2022 & 2023
Shakestack’s Stock Price has been battered in 2022 & 2023

View the Shakestack Stock Chart & Financials on TradingView

Like Chick-fil-A, the founder’s family still operates In-N-Out-Burger. The current owner is Lynsi Snyder, the granddaughter of founders Ester and Harry Snyder.

In-Out-Burger is even more tightly-held than Chick-fil-A – it does not sell franchises. Moreover, In-Out-Burger is privately held, so you cannot buy stock.

Unlike most fast-food brands, In-Out-Burger has rejected national and international expansion. They only operate 358 In-Out-Burger locations in six Western states.

Shake Shack (NYSE: SHAK), a New York-based company that stole In-N-Out-Burger’s plan, is publicly traded. In-N-Out-Burger and Shake Shack are modern variations of a classic roadside burger stand.

Both chains emphasize high quality and have loyal customer bases. The difference is In-N-Out concentrates on drive-in customers, while Shake Shack operates in many urban locations.

Shake Shack is expanding throughout the United States and the United Kingdom. In-N-Out Burger is also expanding into a few new states. In-N-Burger and Shake Shack could compete in Colorado, where both chains are opening restaurants.

Shake Shack (SHAK) loses money. It will report an operating loss of -$24.07 million on June 30, 2020. Shake Shack reported a quarterly gross profit of over $14 million in 2022.

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Chick-fil-A Stock Summary

Chick-fil-A’s success shows that the American restaurant and fast-food markets are experiencing dramatic change. The restaurant business is centralized around large national brands and chains.

Customers demand higher quality and service levels, better and healthier ingredients, delivery, and faster service. Many diners are also demanding food that reflects their values.

Chick-fil-A embodies all these trends. A tightly-controlled and centralized national organization makes all the decisions. Chick-fil-A sells high-quality food and offers a high level of service. Chick-fil-A, like Chipotle, enforces a rigid system of values that reflects its owners’ beliefs.

Both Chick-fil-A and Chipotle make money by charging higher prices for higher-quality foods. Both chains feature simple menus that focus on a few popular menu items.

You can argue that Chick-fil-A could be the future of fast food. Identifying restaurants similar to Chick-fil-A could help investors make money.


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9 COMMENTS

  1. Maze does not think Chick-fil-A will not take McDonald’s place as America’s fast-food leader anytime soon.
    How soon is that?

  2. Always had a wonderful chicken dish at Chick fil A. Daughter worked at one of the Restaurants while in High School. Gave a monetary gift for her college tuition.

  3. One could research Chick-fil-A’s goods and services suppliers and then invest indirectly by purchasing stock in those support companies. One could save dollars for those investments by NOT purchasing fast food at all… Remember the 52 week rule: If you save $20 each week, you will have an extra $1040 to invest one year from today.

  4. I love the Chic-Fil-A in my area of central Arkansas. They have a two-lane set up and even when the lines are fairly long, the employees seem to have a good system to where guests get to place their orders pretty quickly and usually receive their orders within about 5 minutes or so.

  5. I enjoy chick -fil-a food and their standards,would like to invest in them if i could,you have to go there when the lines aren’t too long,unfortunately very often i drive by not having the patience and time to wait ,plus a impatient girl friend,i would love to invest in one as a silent partner

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