As an investor, do you look at a company and wish to be part of it? Do you listen to brand success and wish you had a share of it? Well, if your answer is yes, am sure you know how to look for potential investments to put your money in.
Other artciles about Chick-fil-A Stock
For you to be part of the companies that are doing well, you must do something, right? Being an investor requires you to think hard, dig more, and do your calculation to make sure you do not put your money down the drain. So, how do you invest in a company? Through buying the company’s stock.
What is the stock?
When you want to invest in a company, you go to the stock exchange and buy their stock or shares. That is a sure way that you have a share and a right to the business. For you to buy the stock, the company must have given the stock exchange market the authority to sell on their behalf.
Companies who give the stock exchange market shares to sell on their behalf called public companies. There are also those who do not trade their shares in the stock market and are private companies. A good example is Chick-fil-A.
Chick-fil-A at a glance
In the competitive world of fast food, Chick-fil-A remains to be the best. With a rank of being the eighth when it comes to US sales, it is a clear indication that they are successful and doing well in the industry. They have an annual revenue of more than $1 billion.
Their success comes because of what they do best; feed the public with delicious food. Their snacks and dishes that are chicken based are the reason to why people from all lifestyle come to have a taste of their finger licking good delicacies.
They have friendly workers who serve without discrimination. With a Christian foundation, they handle their customers with kindness and respect that they deserve. They make you feel at home when enjoying your grilled chicken sandwich.
Over the years, people want to be to associate themselves with them. They want to be part of them and their success. That is what the public keeps on questioning whether they are a private entity or have made the decision of going public so that they can invest in the company.
The brilliant idea was born by the late Truett Cathy who has been the longtime CEO and founder. Over the years, he has been running the company and opening branches all over to meet the company’s expectations. That has seen them have over 2000 branches all over the US and Canada.
When the company founder died in 2014 at the age of 94, he gave the leadership to his son T. Dan Cathy. He too has been at the forefront in making the company a success. That is by opening more branches and improving on the menu.
Before Cathy died, he came up with a draft contract that states that the ownership of the company should remain private. It should remain in the family. It states that even though at one time they may wish to sell the company, they should do so but still make the company remain private.
Since then, the company has been private. It does not trade in the stock exchange and ownership remains in the family. The brothers remain active in the management of the company. So what makes the Chick-fil-A make the decision of remaining private?
8 Reasons Why Chick-fil-A Stock is not Available
Like any other private companies, there are various reasons why a company remains to be private. Before you get mad, judge them, and curse them for being selfish, the following are the reasons why Chick-fil-A stocks are not available.
- To fulfil the founder`s wish
It is good to respect a dying ma wish. When Truett Cathy died, his wish as that his son kept the company private. The company has been dear to him and the idea of another person from the outside coming to dictate how the company should run as absurd to him. That is what he wrote it down and the sons are obeying.
- Keep control
When company stocks are not out for the public to buy, it retains the ownership and dictates how it should run. There are no forces from the outside dictating them on what to do and to avoid. That is what Cathy, the founder wants for Chick-fil-A.
Just as Cathy stated in an interview, it was absurd and ridiculous to have someone who knows nothing about the company coming in to say on how it should run their affairs. It was his wish that they keep it private after he dies. It is a good way of keeping control.
When he died, his some T. Dan took over as the CEO and head of all the operations while the second son took over as the vice person. The grandchildren have been taking part in the managerial roles of various branches of the company.
- They finance themselves
One of the major reason why a company chooses to become public is to raise capital for various reasons. The company may want to expand to various cities, buy equipment, or generate fund for sustaining itself. They raise the fund they need through selling stock in form of IPO.
Chick-fil-A does not need to sell their stock to raise money. They have been self-sufficient over the years. Due to the high revenue, they generate over the years, they have been able to sustain their expansion and operation without help from the outside hence, there is no need for selling stock.
- Growing well on their own
Selling stock to the public means, you are open to ideas from the shareholders on how the company should run. It means that people will dictate what to do and criticize when they do not meet expectations. That can be tedious to a company.
Chick-fil-A has been doing fine. They have confidence in the team that they have at the managerial level and trust all their decisions and doings. That is why they do not need any help from the outside who may come as shareholders. They are able to have many branches and operate them successfully.
- Stay discrete
When a company shares are out to the public for them to buy, it means the company must share all the information to the public. It means all the financial statements, minutes, goals, and decisions that they have made over the years. That can invite a lot of criticism, which might hinder growth.
Chick-fil-A believes that for them to be successful like they are, the public should know more of what they provide more than what they are all about. Having a lot of information out there can be good and bad at the same time. That is because they use information out there against you and that is what Chick-fil-A does not want.
- Avoid stress
When you have so many handling, the company can be stressful. That is because the directors cannot make any decision without involving the shareholder. It also involves the management holding meetings and accounting on what they have been up to now and then.
Chick-fil-A believes in delivering what the customer wants. They want to avoid stressful situations for efficiency. That is why the sons remain the CEO and on top of the game, workers and operators trust them to make conclusive decisions concerning the company.
- Unique culture
Having a private company going public may mean to let go of their traditions and what they believe in. that is because they have to be flexible and allow critics and other peoples believes. It can be demoralizing especially if you have certain to follow certain principals.
Chick-fil-A is known to follow their beliefs. They expect everyone on board to follow and adhere to them. That is because they believe the principals keep them moving and brings the success that they have been having over the years. That is what the founder had to decide to remain private.
They believe there is no opening on Sundays. That may change if they allow dictation from the outside. They also have a strict Christian belief that is they expect their workers to follow. Though they have freedom of worship, their belief in Christianity is something they have been showing all over.
- Personal reasons
According to the founder before his death, he stated that he also has personal reasons why he wanted the company to remain private. It is maybe to avoid all the laws, expenses, and decisions that come with making the company public. Maybe he wanted his sons to inherit the company, who knows.
Disadvantages of Chick-fil Stock not being available
Although they have pride in owning the company, that they enjoy all the profit and the glory of the company, there is a disadvantage on their part when they do not have their stock in public, the disadvantages include;
- No new ideas
One family runs the business. They make all the important decisions. Sometimes, they may not be the best but they do not have someone to challenge them. It can lead to the fall of the company if the decision was a bad one.
the need for fresh ideas on how to run the business is a good one. presence of shareholders can bring new ideas of how to drive sales and change strategies to increase their revenue. That is something they may never know because they are private.
- Their beliefs discriminate
There has been speculation on that they believe in. people have been criticizing them for discriminating other religions and same-sex marriages. That has an impact on their sales since more and more people have been noticing their dictatorship.
It is good to accommodate other people and believes in your business. That will make the public trust and like you for accommodating people from different lifestyles. They will want to associate with you and buy your product. That is what Chick-fil-A doesn’t understand.
Other ways you can invest in Chick-fil-A
Just because the Chick-fil-A stocks are not out there, it does not mean that you cannot be part of their success. They still want to give hardworking, result oriented and open-minded individuals to enjoy their success and be part of them. How do they do that? By franchising.
They have been doing so over the years. It is giving out their brand, logo, and association to a successful candidate at a fee. For you to be a successful operator, like they call them, you must fill an online form from their website, pay a fee of $10,000, and express your desire to be a franchiser.
If luck is on your side and they pick you to be their operator, they will pay the real-estate fee and construct the premises for you here that want the business to be. They will then give you the branch h for you to run. What are some of the conditions that they give you?
First, you must be willing to part with 15% of your daily sales for the construction and operational fee. At the end of the month, they expect you to pay them 50% of your net sales after taxation. You must also obey the rule of closing on Sunday and be active in the running of the branch.
What you should not is that franchising Chick-fil-A does not mean you own any part of the equity. It is a demoralizing factor since the aim of every investor is to own part of the company. You also do not have a right to sell the business or pass it over to a person of your choice making it a bad investment choice.
If you have money and want to be associate yourself in a fast food company, Chick-fil-A is out of choice. That is because the company is private and the founder chooses to remain that way. You may wish to franchise it but it will not be the same as owning the stock of the company.