Chili’s Franchise Cost, Profit & Failure Rate 2024

Chili’s has been a mainstay of the American restaurant scene since its establishment in 1975, it is also expanding internationally. This article will look at all aspects of franchising with Chili’s, from the Franchise Fees and Profit to Total Investment and Training Requirements.

We’ll also discuss key considerations such as Restrictions, Renewal Options, and Return on Investment. Whether you are considering opening a single store or multiple locations, read on for all the information you need about franchising with Chili’s!

Chili's Franchise

About Chili’s

Chili’s is an international catered meal brand in the Americas, Europe, Asia, and the Middle East. It is an American casual dining restaurant operating since 1975, with over 1,500 locations across the globe and serving its delicious menu.

Brinker International owns and operates Maggiano’s Italian restaurant and owns and operates Chili’s.

Moreover, Chili’s distinguishes itself from competitors by adopting a significant rewards program to entice current and future customers by providing members with free chips and salsa or a free non-alcoholic cocktail on each visit.


Franchise Model Of Chili’s

Cost Or FeesAmount
Investment$2,848,695 to $4,637,695
Franchise-Fee$60,000
Royalty-Fee1.3%
IndustryRestaurant
Area Requirementaround 5,000 square feet
Total Outlets1610

History Of Chili’s

Larry Lavine built the first Chili’s eatery in Dallas, Texas. His mission was to bring the globe the smoky aromas and old-fashioned seasonings of southwest Texas.

The Terlingua Chili Cook-Off, which used these ingredients on anything from ribs and poultry to hamburgers, inspired him.

In 1975, he launched Chili’s Hamburger Grill and Bar, featuring handcrafted, high-quality cuisine and drinks in a relaxed setting.


Chili’s Franchise Training

Chili's Franchise Training

In most cases, the introductory training course will last 15 weeks.

All necessary pre-opening instruction will occur at one of the franchisor’s accredited educational restaurants and must be finished with the franchisor’s approval at least two months but not over five months before the restaurant’s launch.


Chili’s Territory Granted

According to the Licensing Agreement, franchisees are only licensed to function the eatery in the proper location.

Franchisees are not permitted to transfer the business without prior approval from the franchisor. The Licensing Agreement does not grant any geographical rights.


Chili’s Franchise Revenue & Profit

Chili’s franchise owner makes $3,795,360 in sales each year, and this figure is based on the performance of 171 Chili’s franchise outlets in 2021.

And if we talk about the profit, then Chili’s franchise owner make approximately $1,214,515 in profits per year. This figure corresponds to an adjusted EBITDA profit margin of 32%, which we calculated in the following way:

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%3795360.00
Rent8.50%(322605.60)
Insurance4.25%(161302.80)
Salaries17.00%(645211.20)
Franchise Royalty Fees4.25%(161302.80)
Utilities1.70%(64521.12)
Cost of Goods Sold (COGS)21.25%(806514.00)
Labor (Variable)11.05%(419387.28)
Total (Expenses)68.00%(2580844.80)
Net Profit32.00%1214515.20

Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.


Chili’s Franchise Ideal Candidate

Chili’s has several special qualifications for the right individual, making Chili’s franchise ownership harder to obtain than most others.

If licensing in the United States, a few of these requirements include five years of a restaurant environment, prior leadership or administration, and a willingness to operate more than one eatery.

The prerequisites for their overseas courses are subtly different.


Payback Period Of Chili’s Franchise

With an investment of $4,637,695 and an estimated 32% profit on the average net revenue, the yearly profit would be $1,214,515.

So, to find out how long it will take to earn back the initial investment:

Payback Period = Investment / Yearly Profit = $4,637,695 / $1,214,515= 3.8 years

Based on these figures, it will take approximately 4 years to pay back the initial investment for Chili’s. This time period could be longer or shorter depending on your sales, revenue, and profit figures.


Failure Rate Of Chili’s

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2018315311-4
2019311298-13
2020298174-124

For the Franchised outlets:

  • In 2019, the failure rate was (4)/315×100≈1.26%
  • In 2020, the failure rate was (13)/311×100≈4.18%
  • In 2021, the failure rate was (124)/298×100≈41.61%

Company-Owned Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2018937940+3
2019940944+4
20209441059+115

For the Company-Owned outlets:

  • In 2019, the growth rate was (3)/937×100≈0.32%
  • In 2020, the growth rate was (4)/940×100≈0.42%
  • In 2021, the growth rate was (115)/944×100≈12.18%

Total Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
201812521251-1
201912511242-9
202012421233-9

For Total outlets:

  • In 2019, the failure rate was (1)/1,252×100≈0.08%
  • In 2020, the failure rate was (9)/1,251×100≈0.72%
  • In 2021, the failure rate was (9)/1,242×100≈0.72%

According to the above-mentioned data, we can see that the franchised outlets for Chili’s declined from 2019 to 2021, showing a failure rate between 1.26% and 41.61%.

On the other hand, for company-owned outlets, the growth rate of Chili’s was lying in the range between 0.32% and 12.18% for 2019-2021.

Overall, when we combine the data of franchise and company-owned outlets, we can see that Chili’s franchise has declined in the years 2019-2021, showing a total failure rate between 0.08% and 0.72%.

Entrepreneurs considering a venture into the bar franchise sector might explore options such as Texas Roadhouse, Portillo’s Franchise, Dave And Buster’s Franchise, Wahlburgers, and Hooters franchises.


Chili’s Comparison

CompanyChili’sBuffalo Wild Wings
Founded In19751981
Initial Investment$2,848,695 to $4,637,695.$1.5 million to $3.5 million
Franchise-Fee$60,000$25,000
Total Outlet1610600
Annual Revenue $3,005.7 Million$3.669 Billion 

Frequently Asked Questions

Chili's is owned by which organization?

Chilli’s is owned by Brinker International, inc.

Is Chili's a franchise that can be run from home?

No

Does Chili's offer franchising?

Yes, Chili’s grants franchises for the operation of full-service restaurant chains.

How much does a Chili's franchise cost?

An initial investment required to open a Chili’s franchise is $2,848,695 to $4,637,695, With a franchise fee of $60,000.

Who founded Chili's?

Chili’s was founded by Larry Lavine in Texas in 1975.

How many locations does Chili's has?

As of 2023, there are 1,286 domestic Chili’s restaurants, whereas the number of international restaurants is 364.

Where is Chili's headquartered?

The headquarters of Chilli’s is located in Dallas, Texas, United States.

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