What kind of competition may a Chick-fil-A franchisee face?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
You will not receive an exclusive territory. You may face competition from other franchisees or licensees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
Chick-fil-A may operate or license others to operate any business competitive with the business of its Operators and/or its Licensees under a name other than Chick-fil-A. Chick-fil-A is currently conducting a test of its affiliate New Mile Ventures, LLC's delivery kitchen concept called Little Blue Menu ® featuring several new virtual restaurants as well as offering Chick-fil-A products. As of the date of this Disclosure Document, Chick-fil-A has not formulated any plans or policies to operate or license others to operate any business under a different name, but Chick-fil-A or its affiliates may establish other or similar businesses at some future date.
As described in Item 1, certain affiliates of Chick-fil-A operate certain Dwarf House restaurants and Truett's Grill restaurants, which are licensed to sell Chick-fil-A products. The Dwarf House restaurants are modeled after the Dwarf Grill restaurant first opened by S. Truett Cathy in Hapeville, Georgia, in 1946. (The eighteen Dwarf House and Truett's Grill restaurants that currently exist are owned by our affiliate, Truett's Group, LLC.) Depending on the proximity of a Dwarf House or Truett's Grill restaurant to your franchised Chick-fil-A Restaurant, a Dwarf House or Truett's Grill restaurant may compete with your franchised business.
As described above, Chick-fil-A licenses Chick-fil-A Licensees and continues to offer licenses to prospective Licensees who have access to certain non-traditional locations such as schools, workplaces, universities, airports, hospitals and other similar captive audience locations to sell Chick-fil-A brand products at these locations. Chick-fil-A also grants licenses to franchised Operators and continues to offer licenses to prospective franchised Operators to operate franchised Chick-fil-A Restaurants as (i) captive venue units in office buildings, big-box stores, downtown areas, schools, universities, sports stadiums, theme parks and other similar captive audience locations and (ii) delivery kitchen units in delivery kitchen locations, for which Chick-fil-A has obtained the rights to conduct a restaurant business or concession. Depending on the proximity of a Chick-fil-A Licensed Unit or other Chick-fil-A Restaurant to your franchised Chick-fil-A Restaurant, a Chick-fil-A Licensed Unit or other Chick-fil-A Restaurant may compete with your franchised business.
Source: Item 12 — Territory (FDD pages 59–60)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, a franchisee may face competition from several sources. Chick Fil A does not grant exclusive territories, meaning franchisees could encounter competition from other Chick Fil A franchisees or licensees. Competition may also come from outlets that Chick Fil A owns directly, or from other distribution channels and competitive brands that Chick Fil A controls. This lack of territorial exclusivity is a significant factor for prospective franchisees to consider, as it directly impacts the potential market share and revenue of their specific location.
Chick Fil A also has the right to establish other company-owned or operated restaurants, as well as license others to operate restaurants both within and outside the geographic and customer trading pattern areas surrounding a franchisee's location. They also reserve the right to use other channels of distribution such as the Internet, catalog sales, telemarketing, or other direct marketing. This broad reservation of rights means that Chick Fil A can explore various avenues to reach customers, potentially impacting the sales of individual franchise locations.
Furthermore, certain affiliates of Chick Fil A operate Dwarf House and Truett's Grill restaurants, which are licensed to sell Chick Fil A products. Depending on their proximity, these restaurants may also compete with a Chick Fil A franchise. Chick Fil A also licenses Chick Fil A products in non-traditional locations such as schools, workplaces, universities, airports and hospitals. These licensed units or other Chick Fil A restaurants may also compete with a franchisee's business depending on proximity.
Chick Fil A is also testing a delivery kitchen concept called Little Blue Menu, which features several new virtual restaurants as well as offering Chick Fil A products. Although Chick Fil A has not formulated any plans or policies to operate or license others to operate any business under a different name, Chick Fil A or its affiliates may establish other or similar businesses at some future date. This highlights the importance of a prospective franchisee understanding that Chick Fil A retains considerable flexibility in how it operates and expands its brand, which could lead to increased competition for franchisees.