One of the lucrative franchise opportunities among fast-food restaurants with chicken-based dishes is Slim Chickens. The company has an attractive profile with millions of dollars in overall annual sales per franchised store. However, this expected revenue also comes with high investment costs that can reach up to $4.3 million.
You might be wondering if owning a Slim Chickens franchise is worth the cost and the trouble. We are here to give you all the necessary information about that.
We will discuss Slim Chickens, its franchise system, cost structure, expected revenue, and other crucial details.
About Slim Chickens and Slim Chickens History
Slim Chickens is an American fast-food, fast-casual franchise restaurant chain with specialties in chicken tenders, wings, sandwiches, wraps, salads, and other similar fast-food items.
The first Slim Chickens was opened in 2003, and they reached over 100 stores by 2020 in the United States.
Slim Chicken’s menu focuses on mainly chicken-based dishes, but they also offer salads, wraps, pickles, mushrooms, and some seasonal items.
Currently, Slim Chickens operates over 200 stores and has been franchising since 2011. The company also operates outside of the United States, like the United Kingdom and some other countries.
They have a good reputation, making them a good target for entrepreneurs who want to own a franchise.
Franchise Model Table
| Cost Or Fees | Amount |
|---|---|
| Initial Investment | $1.6 million-$4.3 million |
| Franchise | YES |
| Franchising Since | 2011 |
| Franchise-Fee | $15,000 |
| Royalty-Fee | 5% |
| Liquidity | N/A |
| Estimated Outlets | 214 |
How Much Does It Cost To Open A Slim Chickens Franchise?
The total cost to open a Slim Chickens franchise varies between $1.6 million and $4.3 million. This expected average includes every start-up cost, like the $15,000 franchise fee, payroll, inventory, rent, and others.
Initial investment in Slim Chickens is quite expensive compared to many other franchises. The biggest cost driver is generally the construction of the restaurant. It is usually between $350,000 to $1.2 million.
Franchise Requirements
You need to have a minimum net worth of $3 million and $1.5 million in liquidity. These are the only obligatory requirements to become a franchisee. The company doesn’t look for experience in the industry or with Slim Chickens.
However, having business acumen, management, or ownership experience is always beneficial to you and to your application.
Profit & Revenue Of Slim Chickens
There is no official information about the company’s net profit or revenue numbers. However, we know the average sales a franchised store makes. That way, we can estimate the annual revenue for Slim Chickens.
According to our estimation, the company’s revenue could be around $470 million. And on average, a Sim Chicken franchise has a $2,261,000 turnover per year. So if we assume a profit margin of 15%, then the net profit of Slim Chicken franchise owner would be $339,150.
Here’s how we calculated the net profit for Slim Chicken franchise:
| Financial Overview | Percentage of Revenue | Amount ($) |
|---|---|---|
| Individual Franchise Annual Revenue | 100% | 2261000.00 |
| Rent | 10.63% | (240231.25) |
| Insurance | 5.31% | (120115.63) |
| Salaries | 21.25% | (480462.50) |
| Franchise Royalty Fees | 5.31% | (120115.63) |
| Utilities | 2.13% | (48046.25) |
| Cost of Goods Sold (COGS) | 26.56% | (600578.13) |
| Labor (Variable) | 13.81% | (312300.63) |
| Total (Expenses) | 85.00% | (1921850.00) |
| Net Profit | 15.00% | 339150.00 |
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.
Failure Rate Of Slim Chicken
Franchised Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2020 | 57 | 74 | +17 |
| 2021 | 74 | 104 | +30 |
| 2022 | 104 | 134 | +30 |
For the Franchised outlets:
- In 2020, the growth rate was (17)/57×100≈29.82%
- In 2021, the growth rate was (30)/74×100≈40.54%
- In 2022, the growth rate was (30)/104×100≈28.84%
Company-Owned Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2020 | 23 | 11 | -12 |
| 2021 | 11 | 9 | -2 |
| 2022 | 9 | 10 | +1 |
For the Company-Owned outlets:
- In 2020, the failure rate was (12)/23×100≈52.17%
- In 2021, the failure rate was (2)/11×100≈18.18%
- In 2022, the growth rate was (1)/9×100≈11.11%
Total Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2020 | 80 | 83 | +5 |
| 2021 | 83 | 113 | +28 |
| 2022 | 113 | 144 | +31 |
For Total outlets:
- In 2020, the growth rate was (5)/80×100≈6.25%
- In 2021, the growth rate was (28)/83×100≈33.73%
- In 2022, the growth rate was (31)/113×100≈27.43%
According to the above-mentioned data, there is no failure rate for franchised outlets as the outlets at the end of the year increased during the span of 3 years.
We can see that the franchised outlets for Slim Chickens grew from 2020 to 2022, showing a growth rate between 29.82% and 28.84%.
On the other hand, for company-owned outlets, it started with negative net change, showing a failure between 52.17% and 18.18% in 2020-2021. However, in the year 2022, the company experienced growth, showing a growth rate of 11.11%.
Overall, when we combine the data of franchise and company-owned outlets, we can see that the Slim Chickens franchise has expanded in the years 2020-2022, showing a total growth rate between 6.25% and 27.43%.
Payback Period Of Slim Chicken
With an investment of $4,300,000 and an estimated 15% profit on the average net revenue, which is $2,261,000, the yearly profit would be $339,150.
So, to find out how long it will take to earn back the initial investment:
Payback Period = Investment / Yearly Profit = $4,300,000 / $339,150 = 12.67 years
Based on these figures, it will take approximately 13 years to pay back the initial investment for Slim Chickens. This time period could be longer or shorter depending on your sales, revenue, and profit figures.
Overall Sales
The average overall annual sales for a Slim Chickens franchise restaurant is around $2.2 million. The lowest gross annual sales are $901,510, and the highest can go as high as $4 million. It depends on various factors.
Training and Support Of Slim Chickens
There is a total of 231 hours of on-the-job and 30 hours of classroom training as part of the Slim Chicken’s training package.
For some of the on-the-job training, you must travel to their headquarters or another location approved by Slim Chickens. This training includes operational information, management, and other necessary education.
They also offer ongoing support at both operational and marketing levels. They help with proprietary software, pre-opening preparations, lease negotiations, site selection, and many others. The marketing support is comprehensive, from national and social media marketing to SEO help.
Terms of Agreement and Renewal
The initial franchise agreement’s term is typically between 10 to 15 years. If the building is leased, then the rental contract’s term also plays a role. It could be shorter than the mentioned timeframe. After the first term is over, a renewal is possible. Details of this renewal will depend on your agreement.
Obligations and Restrictions
Slim Chickens franchisees are obligated to actively participate in the daily operations of their franchised restaurant. The company doesn’t allow for absentee ownership and makes it obligatory to oversee the daily operations.
Additionally, while the franchisee is overseeing the operations, they can’t do that part-time. They have to be present at the restaurant according to the store’s working hours. You have to work full-time, on-site, at all times for the restaurant.
Financial Assistance
Slim Chickens doesn’t offer direct financial assistance but has indirect financial assistance options. They have relationships with third-party financial lenders that can offer financing. This financing’s terms will depend on each franchisee’s situation, and it’s not guaranteed that everyone will get it.
Financial assistance typically covers start-up costs, inventory, equipment, and payroll. However, the exact coverage will depend on your agreement with the financial lender from which you are getting the financing.
Entrepreneurs considering a venture into the chicken franchise sector might explore options such as Church’s Chicken, Bojangles, and Bonchon Chicken franchises.
Slim Chickens Comparison
| Name | Franchise Fee | Royalty Fee | Initial Investment |
|---|---|---|---|
| Ezell’s Famous Chicken | $20,000 | 5% | $400,000-$600,000 |
| Zaxby’s | $35,000 | 6% | $1.3 million-$3.2 million |
| Slim Chickens | $15,000 | 5% | $1.6 million-$4.3 million |
Conclusion
Fast casual restaurants are some of the most lucrative restaurants for entrepreneurs to own franchises with. Slim Chicken is a popular option offering a high income, with about $2.2 million in overall annual sales per store.
However, this high revenue comes with high initial investment numbers ranging from $1.6 million to $4.3 million, perhaps one of the highest among the industry players.
Nevertheless, the company offers a comprehensive franchise system to get their entrepreneurs to succeed. They have a comprehensive training and support system, and they introduce potential franchisees to third-party financial lenders in their network.
If you think you can handle the high start-up costs, Slim Chickens offers an excellent opportunity to make good money even from just one store.
FAQs
Is Slim Chickens a franchise?
Yes, Slim Chickens is an active franchise, and they are currently franchising in specific locations in the United States.
How much is the Slim Chickens franchise fee?
The franchise fee for Slim Chickens is $15,000. You pay this fee in a lump sum at the beginning of the agreement.
Does Slim Chickens help you get financing?
They don’t directly help you, but they have relationships with third-party lenders who can get you the financing.
Who owns Slim Chicken?
Slim Chicken was founded in 2003 by Greg Smart and Tom Gordon. Both the founders own the restaurants since 2002.
How many locations does Slim Chicken has?
There are 178 Slim Chickens restaurants in the USA. Overall, the company has expanded to more than 100 locations in 19 countries, such as UK and Kuwait.
Where is Slim Chicken headquartered?
Slim Chicken headquarters is located in Fayetteville, Arkansas, US.
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