Leaders vs. Investors
Today we\u2019re talking about leaders versus investors and the differences between the business practices of Chick-Fil-A and McDonald\u2019s. There are several different companies I have always felt have great lessons that can be applied to real estate, and today we\u2019re going to talk about Chick-Fil-A and McDonald\u2019s\u2014specifically the process to own one. I\u2019m a big fan of Chick-Fil-A. I spent several years there and dreamed of being an operator, but it wasn\u2019t a good fit for me and didn\u2019t work out. It did get me into banking and then real estate though, so I am forever grateful. I love the company and love a lot of people that work there, but today I want to talk to you about the process you go through to own a Chick-Fil-A versus the process for McDonald\u2019s. How much do you think it takes to own a McDonald\u2019s or Chick-Fil-A? To qualify to own a McDonald\u2019s, you need a net worth of around $500,000 in liquid assets and pay a $45,000 franchise fee. If you want to open a completely new McDonald\u2019s franchise, you will need upwards of 1.3 to 2.3 million, and even if you are buying an existing franchise, you will still need a million dollars. There is no mention of any leadership skills required, no program you must attend, just the money\u2014you basically must be a millionaire to own McDonald\u2019s. Now what does it take to become a Chick-Fil-A operator? Here is where the difference lies\u2014Chick-Fil-A is looking for leaders and McDonald\u2019s is looking for dollars. This difference isn\u2019t necessarily good or bad, just the difference in how they run their business. McDonald\u2019s doesn\u2019t care how often you are in the restaurant. You can own the business and be there every day or not at all, it makes no difference to their business model. Chick-Fil-A requires you to be there full-time, or a little less if you have a great team\u2014Chick-Fil-A is your primary income. I\u2019m not saying one of these models is any better than the other, but it\u2019s interesting to look at the differences. If you want to be a Chick-Fil-A operator, you apply for their leadership development program. They send you all over the country to help different locations with getting up and running, or you might work at the support center in Atlanta until they send you to your new restaurant. That\u2019s how I met my friend Jonathan. A friend in Pittsburgh had left to open his new Chick-Fil-A restaurant and Jonathan came to work as an interim manager and ran it as if it were his store. It\u2019s extremely hard to become a Chick-Fil-A operator. In fact, it\u2019s much easier to get into Harvard. Harvard has an admittance rate of 3.2%. You are guaranteed to get McDonald\u2019s if you meet the financial requirements, so there isn\u2019t an admission rate at play there. Chick-Fil-A only plants 75 or 80 new franchises each year because they\u2019re doing it all in cash. So, they\u2019re admittance rate is basically 0.5% to become operators. You can see there are some differences between becoming a Chick-Fil-A operator and becoming a McDonald\u2019s owner\u2014it all comes back to leadership or dollars. I hope this makes you think about what you value in your real estate business. Are you trying to grow as a leader and become better? Or are you an investor who doesn\u2019t really care about the leadership skills? I hope you lean more toward it not just being about the dollars. You want to focus on the leadership. You want to give your clients the same kind of service they give at Chick-Fil-A\u2014where everything is their pleasure. You know you get terrible service when you walk into a McDonald\u2019s\u2014that\u2019s because owners don\u2019t have to be in the restaurant making sure their employees have a good set of core values. Even 15- and 16-year-old team members go through a pretty rigorous hiring process with Chick-Fil-A. They want the best of the best and as a result, they end up with employees that stick around. Make sure that you are invested in the success of your business. Be passionate about your business and make sure you\u2019re working it full time. This is why I believe...