– How this tiny fast-food restaurant from Georgia grew to be the third-largest fast-food chain in the world.
Chick-Fil-A has gained a cult following over the years for its amazing chicken sandwiches. Both the brand and franchise have fine-tuned their approach to both fast food and customer service. From closing their stores on Sundays to dominating the top earning spot in 27 out of 50 states in the US.
In this blog, we’ll explore Chick-Fil-A’s history, its franchise models, the business strategies it employs, and some of its marketing campaigns.
A Little History about Chick-Fil-A and Its Founder
Chick-Fil-A was founded by Truett Cathy. His early years were spent helping his mom cook and clean for those that boarded their home. And Truett was said to have gained his entrepreneurial spirit from selling bottles of Coca-Cola out of a wagon. Later, Truett and his brother Ben opened The Dwarf Grill in Hapeville, Georgia, in 1946.
After Truett developed a method to make fried chicken in a pressure cooker for the same amount of time it would take to make a hamburger. And their first restaurant success, Chick-Fil-A Inc. was trademarked in 1961.
The diner’s success gave Truett the push he needed to expand the business further & in 1967, Truett opened the first Chick-Fil-A restaurant in Atlanta’s Greenbriar Mall, pioneering the concept of in-mall restaurants.
Throughout his life, Truett invested his time in more than just business and believed that he was in the business of people, not chicken. While he never attended college, he believed that higher education was important and used Chick-Fil-A as a platform to give over $35 million in college scholarships to Chick-fil-A Team Members.
Now, Chick-Fil-A has over 2,250 Restaurants in 47 states. And some of the more unique restaurants opened by Truett over the years were Truett’s Grill, Truett’s Chick-fil-A, Truett’s Pizza Café, and Truett’s Luau.
Chick-Fil-A Franchise
Chick-Fil-A’s corporate culture is based heavily on conservative religious values. Which may be seen as one of Chick-Fil-A’s best assets by some or more as a point of contention by others. A lot of people these days tend to gravitate towards more open and acceptable company cultures. Which is something to keep in mind if you’re starting a business or franchise.
That being said, corporate culture and values are important to look into before starting or investing in any franchise. Because if the company’s values conflict with yours it may cause problems in the future. So if religious conservatism isn’t your cup of tea, don’t get discouraged. There are other options out there.
Chick-Fil-A Franchise Models
The Aggressive Franchise Model (1980 – 2013)
Chick-Fil-A’s earliest franchise models focused heavily on expanding into new locations and opening suburban mall food courts. This practice held on from the 1970s to the 1980s. From the start, Truett was intent on being open 6 days a week for 24 hours, except on Christmas and Thanksgiving. This policy was more attributed to Truett’s Southern Baptist views.
Although, he was noted to have said that he was simply too tired to work on a Sunday after working every day of the week. And he wouldn’t expect his workers to do what he couldn’t either.
Primary Model (2013 – Today)
Now, Chick-Fil-A restaurants are located in independent and non-stand-alone locations like malls, and online units. Or even in satellite units where the brand has direct access to the site owners or managers.
The franchisees are required to focus solely on the Chick-Fil-A franchise, so if you’re a serial entrepreneur or business owner this may not be right for you. One possible reason for this could be, is that the company doesn’t want to focus on creating conglomerates. They prefer quality over quantity for their franchises. Because each Chick-Fil-A restaurant is independently owned and operated, serving the community it resides in.
And as everyone knows – the stores are famously closed on Sundays.
Why Does It Cost Only $10k To Own A Chick-Fil-A Franchise?
In America, it costs upwards of $2 million to develop and open a franchise, especially for big brands like KFC or McDonald’s. And corporations won’t even look at your applications unless you have a net worth of at least $1 million. But at Chick-Fil-A, things are done a little differently.
1. It has no minimum net worth requirement
2. It has the lowest franchise fee, for a fast-food restaurant chain ($10k)
3. It has the lowest total investment cost for a franchisee ($10k)
4. It charges the highest royalty (15%)
The reason? It’s because Chick-Fil-A (the franchisor) covers almost all the costs for opening a new restaurant (which could range from $343k to $2m). The franchisee only needs to pay the $10k fee. And Chick-Fil-A pays for and retains ownership of everything – real estate, equipment, inventory, etc.
So while a franchise like KFC takes 5% of sales, Chick-Fil-A takes 15%, and 50% of any profit.
Chick-Fil-A’s Marketing Strategy and Growth
Chick-Fil-A’s main marketing strategy starts with its franchisees. John Hamburger, the founder of industry trade publication – Franchise Times Corp., stated that the franchise aims, “To put somebody in the store close to the customer”. Adding that, “They’re dealing with the customer, and they’re in the community. They’re active in the community. And that’s what Chick-fil-A does.” The company also encourages its franchisees to get involved with their communities through various local organizations.
Even today Chick-Fil-A only opens 100 stores a year.
The Brand’s Slogan and Name
When first opening its stores back in 1967, Truett was looking for a name that reflected the company’s top-quality chicken sandwiches every time customers visited their restaurant. And the trademark attorney he sought out also encouraged him to choose a unique-sounding name.
He finally chose Chick-Fil-A – ‘Chick’ to represent the restaurant’s signature item and ‘fil-A’ as a play on the word filet and he replaced the ‘et‘ with an A to refer to the Grade A quality of the chicken.
And lastly, Chick-Fil-A’s famous slogan, “We didn’t invent the chicken, just the chicken sandwich” was trademarked in 1961. Later in 1995, the brand also introduced its “Eat Mor Chikin” cows campaign. This slogan in particular has stuck with the brand for nearly 20 years. And they’ve continued to promote their bovine mascot through cow-themed mugs, T-shirts, stuffed animals, refrigerator magnets, and laptop cases all on their company website.
Consumer-Focused Strategy
For nearly 8 years in a row, Chick-Fil-A has maintained its position as America’s favorite restaurant, according to the American Customer Satisfaction Index (ACSI). Even Though fast food has declined in popularity, Chick-Fil-A has managed to maintain its ACSI score of 83, the highest score on the restaurant survey.
The brand specifically trains its employees to go the extra mile when it comes to customer interactions. This ties in with its ‘customer-first’ mantra and the chain’s founders have held onto the philosophy that the most sustainable way to do business is to provide the best possible experience for customers.
The Future – What Can We Look Forward To?
Recently Chick-Fil-A has led the trend in its corporate response to the coronavirus. The company closed its stores on March 15, 2020, during the pandemic. It provided sick leaves for its employees with confirmed COVID-19 cases. Causing several other fast-food chains to follow suit.
As of 2022, Chick-Fil-A earned the No. 1 spot as America’s most-loved fast-food chain. Its impressive customer service played a huge role in its success. According to BuzzFeed, Chick-Fil-A is expected to become the world’s third-largest fast-food chain, surpassing Wendy’s, Taco Bell, and Burger King.
Conclusion
As stated Chick-Fil-A is a brand that heavily focuses on customer service and interaction to drive sales. And it is also a brand that centers itself on building connections with communities and local organizations in the locations it chooses to set up its stores.
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