Chick-fil-A, Inc. filed its Franchise Disclosure Document (FDD) on March 31, 2018 and within that disclosure released its audited financial statements for the year ended December 31, 2018.
Highlights for the year included:
Total revenue increased 13.7% to $3.0 billion compared to $2.6 billion in 2017. Solid revenue gains were reported in all categories—base operating service fees, additional operating service fees and rental income; (a)
As of December 31, 2018, the Company had 1,989 franchised and company-operated Chick-fil-A restaurants compared to 1,882 locations in 2017, an increase of 107 locations;
Total system-wide sales generated from franchised and company-operated restaurants were $10 billion in 2018 compared to $8.6 billion in 2017, an increase of 16.3%. This was the 51st consecutive year of sales growth for the company;
Of the approximately 1,539 domestic franchised restaurants not located in malls that were open for at least one full calendar year, the median annual sales volume in 2018 was $5,657,831 and the average annual sales volume was $5,724,126.
Of the approximately 234 domestic franchised restaurants located in malls that were open for at least one full calendar year, the median annual sales volume in 2018 was $1,833,131 and the average annual sales volume was $2,213,929.
As of December 31, 2018, the Company had 363 licensed locations in operation, compared to 343 licensed locations in 2017. Licensees consist of food management companies operating at schools, workplaces, universities, airports and hospitals;The company projects 125 new franchised outlets to be opened in 2019, with Texas and California projected to grow by 21 units each;
Comprehensive earnings were $450.9 million in 2018 versus $426.2 million in 2017, an increase of 5.7%;
Net cash provided by operating activities was $910.4 million in 2018 compared to $814.7 billion in 2017, an increase of 11.7%;
Other financial statement observations:
Total advertising expense for the company was approximately $99.6 million in 2018, compared to $98.7 million in 2017.
In 2018, the company paid $181.5 million towards its qualified defined benefit pension obligation, which included an accelerated funding payment of $150 million.
The company purchased $804 million in property and equipment in 2018, compared to $716.2 million in 2017
The company entered into a new credit agreement totaling $800 million with a syndicate of lenders in 2018, with Wells Fargo Bank N.A serving as administrative agent, swingline lender and issuing lender.
(a) Chick-fil-A charges franchisees an operating service fee equal to 15% 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% of the net profit of franchised restaurants. The base operating service fee and additional operating service fees are charged to franchisees monthly and are recognized as revenue in the period earned.