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Review of the Skyline Chili Franchise Opp and Startup Costs

Who doesn’t love a good dish with a warm chili on it sometimes? Skyline Chili takes chili products to the extreme by providing a full menu of options that include their exclusive chili recipe. You can get the classic chili dog in their franchises, but there are also burritos, chili fries, and even chili spaghetti that will pull traffic into a franchise daily. Even those who don’t want chili can enjoy a menu of salads and wraps that are fresh and low in calories.

Are you thinking about getting into the food industry? A Skyline Chili franchise must be the right investment to make. Is it right for you?

Where Is Your Location?

The first part of the evaluation process must be your current location. There are a limited amount of franchise opportunities available for this franchise as they are seeking to expand within a limited scope near their immediate headquarters. If you live or plan to have a business investment within 200 miles of Fairfield, OH then you’ll pass the first hurdle of becoming a franchisee for Skyline Chili. That means the limited territory includes portions of Kentucky, Indiana, and Ohio.

Skyline Chili also believes that the key to their success comes from a good public education. It’s one of the most unique franchise opportunities that is available right now and let’s face it – not everyone is very familiar with chili. Because that’s the key ingredient in most of the menu items, franchisees will be focusing their marketing opportunities on their communities to talk about why chili is a great item so that everyone will be hooked on this exclusive recipe.

If you are enthusiastic about chili and live near the territory in question, then you might be willing to consider the initial costs of what this franchise opportunity requires.

What Are the Initial Startup Costs of a Skyline Chili Franchise?

The costs of this franchise opportunity begin with a $20k franchise fee. In return, you’ll have a franchising agreement that gives you a 20 year licenses to represent Skyline Chili. You’ll also have an initial advertisement requirement of at least $15k during your first 12 months of operation. This is on top of the ongoing 4% royalty and the 4% ongoing advertising fees that are taken from the gross sales of the business on a monthly basis.

To qualify financially for this opportunity, you’re going to need to prove a minimum net worth of $500k. You may also be required to prove up to $400k in liquid capital depending on the market where you wish to place your franchise. Many of the opportunities that Skyline Chili are looking to provide investors are multi-unit franchising agreements, which means each stipulation would be multiplied by the amount of units an investor would wish to open.

The initial investment may total up to $1.2 million to get just one restaurant off of the ground. The final financial requirement of Skyline Chili is that a potential franchisee has credit that is good enough to be able to obtain full financing for the entire project, even if it is not needed because of on-hand resources, in case something happens during the development process.

What Kind of Support Do You Receive As a Franchisee?

Much of the training that you’ll receive from Skyline Chili comes from an on-the-job perspective. You’ll receive ongoing support from a number of organizational staff, including:

• Franchise Consultants.
• Marketing Professionals.
• Field Training Managers.

You’ll be given an operations manual that reflects the best practices of the organization that have been developed since 1949 and then trained in how to implement them effectively. This will give you the chance to provide a fast, friendly service while being able to keep your margins relatively high during the process.

You’ll also be given exclusive access to the chili recipe that has made Skyline Chili a destination quick service restaurant in their community over the decades. With over 140 different franchises operating in the area, you’ll have a regional presence that will encourage people to stop on by when they’re hungry and see your signage out front.

How Good Is This Investment Opportunity?

The issue that comes to mind immediately with this franchise opportunity is market saturation. With a 200 mile outward radius for expansion and over 140 franchises already operating right now, there are limited areas for expansion into a community because many of them will already be served by a Skyline Chili restaurant. You will have to locate a community that isn’t within easy reach of a franchise, yet still has a large enough population base to be able to support your franchise all year.

There is the benefit of the personalized training process where you’re giving the tools to succeed in an environment where you’ll be working. You don’t have to worry about traveling across the country to attend some organization’s “university” to finish the qualification process. You get to stay at home, working with people you trust, to get your franchise off the ground and profitable right away.

There’s also the added advantage of having comparatively low franchise fees and royalties when compared to the rest of the industry. Combining advertising fees with the ongoing company royalty, most franchises in this QSR category are going to pay at least 10% out of their gross sales and with Skyline Chili you get to save 20% of this cost and put it directly into your pocket. The franchise term is also extended, so renewal fees will be less over the course of your investment as well.

If you happen to be in the area, want to get involved with the QSR niche, and want a proven concept that works, then it’s difficult to argue with what Skyline Chili is able to provide. With nearly 7 decades of brand recognition working for them, your franchise will be instantly recognized and appreciated in this region. If you can find the right location, then you’ll have found an excellent business opportunity.

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