Skyline Chili Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$790,000 - $1,075,000
Franchise Fee
$20,000
Min Cash Required
$100,000
Total US Locations
136
Business Summary
Skyline Chili franchises restaurants that specialize in high-quality chili-related food products. These restaurants offer table-service, drive-thru, or carryout options. Skyline Chili also manufactures and sells its secret recipe chili products, shredded cheddar cheese, hot sauce, crackers, and salad dressing at retail through grocery stores, supermarkets, and convenience stores.
Corporate History
Skyline Chili's business began in October 1949 as a family-owned proprietorship in Ohio, specializing in chili-related food products using a secret recipe. The proprietorship was incorporated as Skyline Food Products Co. in 1965 and later changed its name to Skyline Chili, Inc. in 1986. Skyline Chili, LLC was formed in December 2020 as a successor entity following a reorganization, with an investor group becoming majority owners in June 2023. Skyline and its predecessors have been franchising the use of its trademarks and restaurant operating methods since 1958.
Financial Overview
Investment Range
$790,000 - $1,075,000
Franchise Fee (Low)
$20,000
Franchise Fee (High)
$20,000
Minimum Cash Required
$100,000
Royalty %
4%
Marketing %
4%
Equipment Costs (Low)
$600,000
Equipment Costs (High)
$800,000
Working Capital
$125,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Skyline Chili demonstrates a strong financial position. The company's net income was $10,710,000 in 2023 and $5,014,000 in 2022. Cash and cash equivalents significantly increased from $5,977,000 in 2022 to $14,318,000 in 2023. This financial strength is also supported by the company receiving $5,428,000 in employee retention tax credit income in 2023. While a specific contingent earnout liability of $21,326,000 was paid in full in 2023, the overall financial performance and liquidity indicate a stable and well-managed company. The auditors have provided an unqualified opinion on the combined financial statements, meaning they present fairly in all material respects.
Financing Details
Skyline Chili does not offer any direct or indirect financing to its franchisees. The franchisor also does not guarantee any notes, leases, or other financial obligations for franchisees. Therefore, franchisees will need to secure their own funding through third-party lenders.
Performance Metrics
Total US Locations
136
Franchised Units
106
Corporate Units
31
Avg Square Footage
2,650
Franchising Since
1958
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Skyline Chili has no litigation required to be disclosed in its Franchise Disclosure Document. This means Skyline Chili has not been involved in any material litigation in recent years that would need to be reported to potential franchisees.
Bankruptcy History
Skyline Chili has no bankruptcy history to report for the franchisor or any of its key personnel identified in Items 1 or 2 of the Franchise Disclosure Document.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, Skyline Chili franchisees must provide written notice to Skyline between 90 and 270 days before the initial term expires. They must also sign Skyline's then-current standard Franchise Agreement, ensuring they are not in default of any existing agreements with Skyline or its affiliates, and must have substantially complied with all terms during the initial period. Franchisees are required to sign a general legal release of claims against Skyline and ensure their managing owner or another designated manager successfully completes Skyline's training or refresher training. Additionally, the restaurant must be remodeled or redecorated to meet Skyline's current standard plans and specifications at the time of renewal, and a renewal fee of the greater of $10,000 or half of the then-current initial franchise fee must be paid.
Training & Support Program
Franchisor Assistance
Before a Skyline Chili restaurant opens, Skyline Chili helps franchisees by designating their territory, reviewing proposed sites, providing prototype construction plans, and loaning confidential operational documents and training aids. Skyline Chili also conducts initial training for the franchisee and one additional person. Once the restaurant is operational, Skyline Chili provides ongoing marketing advice and assistance, individual or group consultations, and publishes bulletins and reports about its plans and developments. They also provide access to other resources and assistance developed for franchisees.
Initial Training Hours
346
Training Location
Restaurant
Ongoing Support
After opening, Skyline Chili provides its franchisees with ongoing marketing advice and assistance, and offers individual or group consultations as deemed necessary. Franchisees also receive periodic bulletins and reports covering Skyline Chili's plans, policies, research developments, and activities related to restaurant development. Skyline Chili may also make available or require attendance at refresher or additional training programs, for which there is no fee if mandatory, though travel and living expenses are the franchisee's responsibility. Optional training programs are available for a fee.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
full-time
Territory Type
protected
Territory Size Requirements
Skyline Chili's individual franchise territories are protected and typically defined by a circle with a varying radius around the restaurant, usually up to two miles. This radius is determined by factors such as population density, specific location, and natural barriers. In high-traffic areas, like downtown metropolitan cities, the territory may be defined by street boundaries, ranging from a single storefront to several city blocks.
Staffing Notes
Skyline Chili restaurants require a dedicated Managing Owner who must be an officer, a voting owner with at least a 15% ownership interest (unless waived by Skyline), and who will successfully complete Skyline's training program. The Managing Owner must devote their full time and attention to the restaurant's daily operations. Additionally, assistant managers or shift managers are necessary, and all individuals responsible for day-to-day operations must complete a Skyline-approved training program. Initial crew members are also required to undergo a 6-day training program at the restaurant prior to opening. Franchisees are solely responsible for all hiring, discipline, and firing decisions for their employees. All owners, managers, and employees are bound by confidentiality requirements regarding Skyline's trade secrets.