• PrivCo Calculates Privately-Held Chick-Fil-A's Valuation at $4.5 Billion, Making Owners Truett Cathy, Dan Cathy, and Don "Bubba" Cathy Each Billionaires, Worth an Average of $1.5 Billion Apiece
  • PrivCo Calculates That Chick-fil-A (And The Cathy Family) Would Be Worth Additional $190M If Chain Were To Open On Sundays (Which Would Bring the Company $42.5 Million in Additional Revenue Annually, PrivCo Calculates)
  • Chick-fil-A's Whopping 44% EBITDA Margins Make Its Financials Envy Of Fast Food Industry

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July 31, 2012 1:45am EST - PrivCo analysts reveal the impressive financials behind privately-held fast food chain Chick-fil-A (PrivCo Private Company Ticker: CHICKP). The Cathy Family of Georgia, 100% owners of Chick-fil-A, are now worth a stunning $4.5 Billion (the value of Chick-fil-A according to PrivCo analysis), with the company throwing off $492 Million in EBITDA and $1.12 Billion in revenue in 2011, an EBITDA margin of 44%, virtually unheard of in the restaurant industry. 

(Note: Chick-fil-A has been the subject of some recent controversy regarding statements made by its President Dan Cathy opposing gay marriage)

Breakdown of key figures as follows:

  • Chick-fil-A, Inc. operates a quick-service ("fast food") restaurant chain in the U.S., and is particularly known for its waffle fries and its chicken sandwiches, which it popularized in the '60s. 
  • Total Units: As of January 1, there were a total of 1,324 Chick-fil-A units. 1,324 were franchised compared to just 41 that were corporate-owned. (The company also operates 3 full-service restaurants using a more recent concept, operating under the brand "Truett's Grill," named after Chick-fil-A founder Truett Cathy, in addition to 11 full-service restaurants under the "Dwarf House" name)
  • Chick-fil-A Revenue Model: Almost all of Chick-Fil-A's revenue comes from high margin licensing fees (as a result of it franchising 97% of its units), which gives the company a unique ability to limit its capital expenditures and generate significant cash flow.
  • Ownership: Chick-fil-A is 100% owned by the Cathy Family. (The Cathy Family is known for being deeply involved in Christian philanthropic work.)
  • Founder: Truett Cathy, who is a billionaire according to PrivCo's Chick-fil-A valuation, with a net worth of $1.49 Billion.
  • PrivCo's Valuation of Chick-fil-A: $4.5 Billion (PrivCo valuation is based on comparable companies' valuation multiples, including factoring in the company's 3 year annual growth rate and EBITDA margins).
  • Chick-fil-A Dividends: Chick-fil-A paid a $191 Million annual dividend to the Cathy Family in 2011, underscoring the enormous free cash flow generated by the business.
  • M&A Activity: In 2007, Chick-fil-A acquired 1 Avado brand restaurants from private-equity firm DDJ Capital Management LLC.
  • Sunday-Closing Policy, And Measuring Its Financial Impact: Per Chick-fil-A company policy, all 1,365 Chick-fil-A locations are required to be closed on Sundays (as well as Christmas Day). The policy applies even to the 97% of Chick-fil-A locations that are franchised (i.e., not company owned), per the strict prohibition in the company's Franchisee Agreement (see below). As a result of Chick-fil-A’s Sunday-closure policy, PrivCo calculates that Chick-fil-Avoluntarily foregoes approximately $47.5 Million in revenue each year.  (PrivCo calculates that opening on Sundays would add another $190 Million to Chick-fil-A's valuation - and therefore the Cathy Family's net worth - on top of its $4.5 Billion valuation.)  The Sunday-closing policy is due to the Cathy Family's religious observance.

Chick-fil-A Franchises' "Closed on Sunday" Policy:

As stated above, Chick-fil-A enforces a strict Sunday closure policy on both its 41 company-owned units, as well as on all 1,324 of its franchisees' restaurants.  Chick-Fil-A's Franchisee Agreement obtained by PrivCo states that:

“Licensee acknowledges the unique corporate environment, culture, reputation and goodwill, including, for example, the Sunday closing policy, that have evolved as an integral part of the CFA System (the "Chick-fil-A Culture")...Licensee shall ensure that every Third Party Operator shall: (g) not operate any Unit or otherwise sell the Products from any Unit on Sundays or on Christmas Day."  (Source: Chick-fil-A Franchisee Agreement 2012)

Key Financial Facts on Chick-fil-A (Source: PrivCo):

Annual Revenue (2011): $1.12 Billion

Employees: 625 (corporate HQ + co. owned units)

Franchised Store: 1,324

Corporate Owned Stores: 41

Average Sales Per Unit: $2.96 Million 

Founded: 1967

Founders: S. Truett Cathy

Owners: Cathy Family

Valuation: $4.5 Billion (PrivCo est. based on comparable companies analysis)

 

When asked by PrivCo, Chick-fil-A spokeswoman Kristal McKanders declined to comment.

(Click Here For PrivCo's Full Financial Report on Privately-Held Chick-fil-A)

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