The Rise Of Chick-fil-A

Chick-fil-A. It's a fast food chain that sells

chick

en sandwiches so good that even McDonald's wants to steal them. And it has such a controversial reputation that entire cities have banned the restaurant from their airports. Critics say Chick-fil-A has a history of supporting and donating millions of dollars to anti-LGBTQ organizations, which has drawn the ire of lawmakers and civilians alike. Chick-fil-A's values ​​are not Chicago's values. But it also has its share of fervent supporters. Regardless of what you think about company policy, Chick-fil-A sales are on the

rise

. As of June 2019, it is the third largest restaurant chain in the US by systemwide sales.

And it generates the most sales per store of any other fast food restaurant in the country. The

rise

is so rapid that even McDonald's and Popeye's are taking note. In July 2019, McDonald's franchise owners demanded that the company add a Southern-style

chick

en sandwich to its menu to keep pace with Chick-fil-A. A month later, Popeye's debuted its own chicken sandwich on a bun spread with butter and pickles, the first the chain has sold nationally. Chick-fil-A is also taking market share from chicken category giants like KFC and Wingstop. So how can a restaurant that's caught up in controversy and closes on Sundays be next in line to overtake Starbucks and McDonald's?

It all started in Atlanta, Georgia, where Chick-fil-A founder Truett Cathy grew up and where the company is now headquartered. Cathy grew up watching her mother prepare traditional Southern-style chicken. In 1926, the 25-year-old and his younger brother raised about $10,000 to open a restaurant called Dwarf Grill. Legend has it that this is where Cathy invented the original Chick-fil-A chicken sandwich, fried in peanut oil and served on a bun with pickles. The menu item was sold out regularly. Then, in 1967, she opened the first Chick-fil-A in Atlanta's Greenbriar Mall. From the beginning, Cathy implemented a policy that remains in place to this day.

All shops would be closed on Sundays. As a devout Christian, he reasoned that Sundays were for spiritual worship. Cathy brought those Christian values ​​with her to Chick-fil-A's flagship store, which featured a cheerful logo of a bright red chicken. Cathy said the A in the company's name stood for Grade A chicken. He was one of the first to envision installing fast food in shopping malls, and as shopping malls began to gain popularity, Chick-fil- A took over. Between 1971 and 1974, Chick-fil-A tripled in size, expanding into the rest of Georgia and the Carolinas and continuing into the South and Southwest.

In 1986, Chick-fil-A decided to grow beyond shopping centers by opening its first stand-alone restaurant. By 1993, its 500th restaurant had opened. But this pushed it into competition with established chicken-focused fast-food chains like KFC, which also opened in the South fifteen years before Chick-fil-A. Chick-fil-A didn't have as much money as those companies to spend on advertising, so it decided to make a splash another way. In 1995, he placed huge billboards on the side of roads in the Southeast. The first poster showed a couple of cows scribbling "eat more chicken" to try to get people to stop eating beef. The campaign went viral and it worked.

In 2000, the privately held company hit $1 billion in sales, doubling its performance since billboards debuted. It also rose to the third-largest fast food chain in the chicken category behind KFC and Popeye's. That was also the year that Kathy and her three children signed an agreement promising to uphold the principles of Chick-fil-A. The agreement included remaining closed on Sundays and never taking the company public. The company culture is unique and has clearly created a lot of success and culture...it's all intertwined. As if you pulled a thread and the entire blanket could unravel. And sometimes, if a company is public, someone might want to pull out one thread and not realize that that's the thread that could unravel the whole cloak here.

Chick-fil-A's rapid growth was also fueled by some key innovations in its operating structure. Each franchise is owned by an independent operator who typically has only one unit and no other business, a model that remains relatively unique in the fast food business. This allowed franchise owners to focus on the restaurant and be truly connected to the community. The composition of employees is another differentiator of the brand. Chick-fil-A has said that two-thirds of Chick-fil-A employees grew up working for the company, working shifts in high school and college, and ultimately returning to pursue careers at Chick-fil-A. after graduating. Chick-fil-A is extremely selective about who can even become an operator.

That structure has created a network of experienced franchise owners who are loyal to the brand. It's the main reason they are successful because they have people who are in the stores every day. They have gone through a tough training process. They strongly believe in the brand and interact with customers. So they are interacting with employees. They are interacting with everyone and it really works. The franchise agreement also allows operators to open restaurants at an extremely low cost. The initial fee is only $10,000. By comparison, the fee at McDonald's is $45,000 and at Wendy's it is $40,000. Without the debt burden of a large upfront fee, Chick-fil-A franchise operators can direct more of their funds toward growth and improvement of your store.

The closed-on-Sunday policy also applies to Chick-fil-As that operate in stadiums. Its Mercedes Benz location even remained closed when the Super Bowl was held there in 2019. Analysts say the policy comes with a steep price. If you do the math, I think it equates to about $1.7 billion in system-wide sales lost by closing on Sunday. Now, again, that assumes you've just opened for a few days and everything else is working normally. But they also say closing could help the chain provide better service. All employees can expect time off no matter how hard they work Monday through Saturday. And sometimes rest and relaxation can do a person a lot of good.

On top of that, you know, guests like to get to the Chick-fil-A restaurant before Sunday arrives because if they find time on Sunday and they have that craving that Sunday and they show up on Sunday, they won't have anything. food from that Chick-fil-A restaurant. In 2018, there were 2,352 Chick-fil-As in operation, 234 in shopping centers, 264 on college campuses and 73 in hospitals, businesses or airports. Chick-fil-A's culture today still centers on the Christian values ​​on which Cathy founded the chain. Outside her Atlanta headquarters, she still hangs a plaque with Chick-fil-A's mission statement. Analysts point to the chain's religious backbone as a driving force behind the company's No. 1 ranking in customer service for four years, from 2015 to 2019.

In a 2013 survey of drivers, it was reported that employees at Chick-fil-A smiled 91.4%. of the time, while employees at the next chain, KFC, smiled 78.5% of the time. Basically, you're starting to see that they're almost a lifestyle brand, you walk in and it's an experience. From the moment you walk in, you have that fresh-faced guy who, you know, greets you, "thank you," you know, he's polite. They are walking around helping you, etc., it's more than just a transaction, it's a complete experience. And I think you're starting to see some of the bigger brands really trying, you know, everything they can to emulate that and try to give you an experience.

Chick-fil-A's Christian values ​​have also been a source of much controversy in recent years. In July 2012, Chick-fil-A came under fire after Truett Cathy's son and current company president, Dan Cathy, publicly expressed his views on gay marriage. He told Baptist Press that he was guilty of supporting the biblical definition of the family unit. The comments sparked backlash in the form of boycotts and LGBT kisses at Chick-fil-A restaurants across the country. According to a YouGov brand satisfaction measure, the company's rating fell to its lowest level in two years after Dan Cathy's First Comments Day comments. Chick-fil-A's rating was 65, 19 points above average.

But four days later, the chain had fallen to 47. Although the comments damaged the brand's reputation, the company's annual sales improved. In 2012, the company posted $4 billion in systemwide sales, a 13 percent increase from $3.6 billion the previous year. It also grew 7.4 percent in average sales per unit. Dan Cathy said in 2014 that he regretted publicly commenting on gay marriage and that he would stay out of political debates. But in 2017, reports revealed that the Chick-fil-A Foundation had donated millions to what critics say are anti-LGBT groups. Such as donations to the Community of Christian Athletes, a sports ministry that believes that homosexual misconduct is unnatural in the eyes of God.

Once again, sales remained unscathed. Chick-fil-A had $8 billion in systemwide sales in 2017, up 15 percent from the previous year. And the company still has not redeemed itself among followers of the LGBT community. During the 2019 Gay Pride Parade in New York City, attendees taped a large X over one of Chick-fil-A's windows. Between 2017 and 2018, systemwide sales improved 12.8 percent, from $8 billion to $9 billion. Its sales per store are higher than those of any other fast food chain: 4 million dollars. McDonald's generates 2.7 million dollars per unit. And in 2019, it became the third-largest restaurant chain in the United States by systemwide sales. It surpassed Wendy's, Burger King, Taco Bell and Subway in just one year.

Since 2007, Chick-fil-A has doubled its number of stores to 2,400 restaurants. Most of its restaurants are still located in the south and southwest. Texas, for example, tops the list with 391 restaurants, while Georgia has 218. However, based on its history of store openings, it appears that the company is slowly working to expand its presence in other regions. Between 2011 and 2018, for example, the company went from having one location in New York to 17. 25 years ago, this was a much smaller regional concept. And today, depending on what source you use, it is by far the third largest restaurant concept in the entire country.

And they are still poorly penetrated in some of those densely populated areas of the country. Not all of them are open on Sundays. So they are a great player. The chain is also a growing threat to other fast food chains. Technology estimates that Chick-fil-A posted more than $10 billion in revenue in 2018 and grew 13.5 percent, while McDonald's grew just 2.5 percent. In July 2019, a group of McDonald's franchise owners signed a joint letter asking the company to add a Southern-style chicken sandwich to its menu. The company is an especially big threat to other chicken-focused restaurants. Between 2009 and 2018, Chick-fil-A went from owning 19.3 percent of the chicken fast-food market to 38.5 percent.

Your chicken place doesn't change. We are chicken experts and from time to time we will give you some extra spicy chicken, or like I said, finished or whatever. But by being maniacally focused on what they do, it allows them to focus on all those extras... the service, the atmosphere. You know, they're not always looking for: What's the next big LTO going to be? The energy of their brand and what they do every day is, once again, growing their brand from the perspective of excellence. So is there a limit to Chick-fil-A? Truett Cathy passed away in 2014, leaving her three children to inherit the company and the $11 billion family fortune.

Dan Cathy is now the company's president and CEO, while his brother Bubba is executive vice president. The private company declined to comment for this article and is keeping its financial information and goals secret. But analysts say that if Chick-fil-A can maintain its growth, there are important regions the chain has not yet dominated. Chick-fil-A plans to open its first international location in 2019 in Toronto and plans to open at least 15 more locations in Canada. Going forward, they just need to make sure they have the management infrastructure in place because as a business gets bigger and bigger, it becomes much more difficult to make sure the quality of work stays high.

So if I had to guess, would they make it? Yes. But there is no 100 percent certainty in the future, and I'm sure they are aware of that and are trying to work as hard as they can to make sure the odds ofsuccess for them are as high as possible.