Featured Franchise Of The Month - Chick-Fil-A

You might want to continue researching an opportunity with Chick-fil-A:

If you are looking for a full-time, "hands-on" career opportunity.
If you have a proven track record in business leadership.
If you have successfully managed your personal finances.
If you are a results-oriented self-starter interested in growing a business.

This might not be the right opportunity for you:

If you are seeking an investment or an equity position in a business.
If you want to sell property to Chick-fil-A.
If you are requesting that Chick-fil-A build at a specified location.
If you are seeking multi-unit franchise opportunities.
If you would like to diversify your franchise portfolio.

Divine–And Bovine–Intervention
by Erica Stephens

Chick-fil-A celebrates a billion-dollar milestone exactly the way it got there: by sticking to its plan.

Recently, Chick-fil-A reached its self-imposed goal of $1 billion in sales by 2001. Year-end 2000 system-wide sales reached $1.086 billion. The milestone passed quietly, in typical Chick-fil-A style.

The brand has been steadily and carefully growing for fifty-three years. During that time, Chick-fil-A has remained moored to its core values: ethical and spiritual tomes extolled by the company’s founder, S. Truett Cathy. In every application of its business objectives, from children’s meal premiums to franchisee agreements, Chick-fil-A strives to live up to its corporate purpose. That corporate guidepost is perhaps most visibly demonstrated by the company’s "Never on Sunday" policy. "We feel that is a very special day, a divine day, a day that is set aside for the family and to worship if you choose," says Cathy. Cathy has never yielded to external pressures to abandon his "Never on Sunday" policy or any other of his sometimes unorthodox business practices.

Of all of his business accomplishments, Cathy is most proud of Chick-fil-A’s scholarship programs, which have awarded more than 14,000 $1,000, no-strings-attached scholarships in the last 53 years.

In more recent years, Chick-fil-A has had a group of bovine ambassadors to thank in part for their success: the "Eat Mor Chikin" cows. "The customers just love those cows," says Jimmy Collins. "When the agency first presented them, we thought, ‘this is a clever idea.’ But we never dreamed that customers would become so enthusiastic about the cows." At the end of 2000, Chick-fil-A had 959 locations in 34 states and South Africa. Recently, QSR Magazine talked at length with Chick-fil-A president James (Jimmy) L.S. Collins and briefly with founder S. Truett Cathy to discuss the history, growth, and future of Chick-fil-A.

Chick-fil-A set its billion-dollar goal in 1989. What is the next goal for the company?

Jimmy Collins: I feel at this point that we have reached a certain degree of momentum. And our expectation is that we will continue on this same path. We don’t intend immediately to set another goal of dollars and cents for a certain date. During the process of this, in the early stages, we got very far behind on this goal. A lot of people frankly got very discouraged, [thinking] that we never would meet it. But what we set about to do was fulfill a challenge that Truett Cathy, our chief executive, had given us: Why not focus on getting better, not just bigger? We believe it was that focus on getting better that actually resulted in the additional sales. We found that we were creating a lot better same-store sales increases. We would have never been able to get good same-store sales increases [without that focus]. Just on the new restaurants we were building, it was not enough [to achieve the billion-dollar goal].

Have you ever been advised that Chick-fil-A’s sometimes unorthodox business practices are a detriment to your bottom-line? And how have you responded to critics?

Cathy: I don’t think we make any sacrifice by being closed on Sunday. It has helped us to attract the caliber of people who appreciate every Sunday off; whether they go to church or not, that is their decision. We say, Gee, if you’ll eat with us six days a week, we’ll let you eat somewhere else on Sunday. That way they can compare us with our competition. We certainly have demonstrated that, in most cases, we can generate more sales in six days that our competition does in seven days.

Collins: We have people who ask questions just like you have, but we’ve never had anyone, as far as I know, to suggest that we would make more money if we were open on Sunday. I’m sure there are people who think that. But we don’t believe it. No one is going to eat at the same restaurant all of the time. So, we just help people arrange which day they are not going to eat at Chick-fil-A.

Has it been difficult to maintain a clear sense of mission through the incredible growth of the Chick-fil-A brand?

Collins: Not at all. Actually, if you think about our rate of growth, if you annualize it out, it has not been that dramatic. It’s been good and steady, which probably is a better way to describe our organization. We are just good, steady plotters. We don’t go in surges and mad dashes and that sort of thing. We just steadily, day after day, and keep pursuing the same objective, which is to satisfy every customer.

Beyond what Chick-fil-A does as a company, you also encourage your operators to become involved with the community. How?

Collins: First of all, you do that by selecting the right people. All retention starts with selection; it doesn’t matter whether it’s the operator of the store or the employees in the store. We try to select a person, ideally from the community in which the store is going to be located, where they already have connections: family, friends, business relationships, social relationships. Operators are tied into the community, and we encourage them to capitalize on that. We not only get business opportunities from that, we also get opportunities to make a contribution to the community, and it’s a two-way street. People like to do business with folks who are making a contribution, whether it is to their school, their church, or their club. It creates a lot of goodwill for the Chick-fil-A brand.

Chick-fil-A has been extremely successful. Why don’t we see more chains trying to emulate Chick-fil-A’s formula for success?

Collins: The values and the culture of any organization are established by the chief executive or the owner, in the case of smaller businesses. When the chief executive remains the same, you can expect the values to remain the same. If you change the chief executive, you always run the risk that things are going to change. Here at Chick-fil-A, we have an advantage in that Truett Cathy has been the head of Chick-fil-A from the very beginning. We have another advantage, too, in that he has his family involved in this business to the extent that the next chief executive will obviously be one of his sons. And because that son is absolutely committed to the same business principles and the same cultural environment as his father and has been a member of the Chick-fil-A staff for more than twenty-five years, we believe that we can expect to see this same kind of operation extend on for another generation.