Walker Kinsler, CC BY-SA 4.0, via Wikimedia Commons
Chick-fil-A, Inc. reported record revenue and earnings in 2021, building upon the substantive gains the Atlanta-based quick-serve operator made during the COVID-19 pandemic. The financial statement and store operating highlights for 2021 were gleaned from Chick-fil-A’s annual franchise disclosure document which was filed by the company April 7.
The company’s outstanding performance—company revenues and profits grew by 33.3 percent and 67.3 percent respectively—came as Andrew Truett Cathy succeeded his father Dan Cathy as chief executive officer of the company on November 1, 2021.
The record-setting year for the 2,700-unit chain included double-digit gains in all revenue categories including royalties and rents paid by franchisees, rental income and company store sales. Average unit volumes for freestanding locations not inside mall locations reached a record $8.1 million per store in 2021, an increase of 14.7 percent over 2020.
Revenue reached $5.8 billion in 2021 compared to $4.3 billion in 2020, an increase of 33.3 percent. Comprehensive earnings were $1.2 billion in 2021 compared to $715.9 million in 2020, an increase of 67.3 percent. Base operating and business service fees, rental income and additional operating service fees each increased by double digits.
As of December 31, 2021, the company operated 2,235 franchised, 76 company-operated and 393 licensed Chick-fil-A restaurants for a total of 2,704 locations, an increase of 106 locations over 2020.
Total systemwide sales generated from franchised and company-operated restaurants were $16.7 billion in 2021 compared to $13.7 billion in 2020, an increase of 22 percent.
Of the approximately 1,836 domestic franchised restaurants not located in malls that were open for at least one full calendar year, the average annual sales volume in 2021 was $8,142,257. That compares to 1,735 domestic franchised restaurants not located in malls that were open for at least one full calendar year in 2020 with a per store average of $7,096,393, an increase of 14.7 percent.
Of the approximately 187 domestic franchised restaurants located in malls that were open for at least one full calendar year in 2021, the average annual sales volume was $3,224,721.
Of the 369 domestic licensed locations open for at least one full calendar year, 289 of them were located on college or university campuses and had average annual sales of $859,740 in 2021. 80 of the 369 licensed locations were located at hospitals, businesses, industries or airports and the average annual sales volume in 2021 was $1,863,550.
Other financial statement observations from reviewing the FDD:
Total advertising expense for the Chick-fil-A system was approximately $156 million in 2021 compared to 130.9 million in 2020.
The company purchased $1.3 billion in property and equipment in 2021, compared to $934.7 billion in 2020.
Notes: Chick-fil-A charges franchisees an operating service fee equal to 15 percent of restaurant sales, less amounts charged to franchisees for equipment rentals and business services fees. The company also receives from franchisees an additional operating service fee equal to 50 percent of the net profit of franchised restaurants, as defined by the franchise agreement. The base operating service fee and additional operating service fees are charged to franchisees monthly and are recognized as revenue in the period earned. The company charges rent to its franchisees for the land and retail space that it leases from third-party developers. The company leases or subleases these properties to franchisees under month-to-month lease arrangements with rent subject to a cap of 6% of restaurant sales.
To review a complete copy of Chick-Fil-A’s 2022 Franchise Disclosure Document click here.