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Franchise Chatter News Roundup: 8 Must-Read News Stories About the Chick-fil-A Franchise

by Franchise Chatter on October 25, 2014

in Chicken Franchises, Franchise Chatter Guides, Franchise Chatter News Roundup

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Chick-fil-A Sandwich Photo by roboppy

S. Truett Cathy got his start in the restaurant business in 1946 when he opened the Dwarf Grill in Hapeville, GA, a suburb of Atlanta. Fifteen years later in 1961 he discovered a pressure cooker that could have a chicken sandwich ready in about the same time that other restaurants were taking to make a hamburger. He continued to experiment with creating the first takeaway chicken sandwich, which eventually resulted in the opening of the first Chick-fil-A restaurant in 1967.

The odd name does serve a purpose. He wanted the name of the sandwich to compete well with beef without using something as obvious as “chicken steak sandwich.” Because the fillet is considered the best cut of beef, he adapted that to chicken in the form of “fil-A,” with the “A” carrying a connotation of quality.

That first Chick-fil-A restaurant opened in Atlanta’s suburban Greenbriar Mall. That was an early innovative idea for the chain, to locate units in the food courts of shopping malls. It wasn’t until 1986 that the chain began aggressively opening standalone restaurants. The private, family-owned and operated chain now has more than 1,800 locations: 1,200 standalones, 300 mall units, 250 non-traditional outlets, 35 drive-thru only units, and a number of full-service restaurants by various names (Chick-fil-A Company Fact Sheet).

At the end of 2013, Kentucky Fried Chicken had 4,491 locations and sales of $4.2 billion, but Chick-fil-A, with less than half that number of locations, had sales that topped $5 billion (Forbes).

Here are 8 must-read news stories about the Chick-fil-A franchise:

The Passing of a Founder

There is no doubt that S. (Samuel) Truett Cathy was the driving force behind Chick-fil-A’s rise through fast food ranks. He died on September 8, 2014, at the age of 93. He was a Southern Baptist stalwart who made no apologies for bringing his strong, conservative Christian values to his business operations, making the company’s corporate mission to “Glorify God,” which is even on a plaque at company headquarters in College Park, GA (Wikipedia). That’s also why the chain is famously closed on Sundays – to give employees time for church, family and rest.

With his increasingly fragile health in the years leading up to this death, leadership at the company was handed over to his sons, who have always been involved in the family-owned business. Dan T. Cathy, who was previously the chief operating officer, is the chairman, president and CEO, while Donald M. (a.k.a. Bubba) Cathy is executive vice president (Chick-fil-A Company Fact Sheet) as well as president of the chain’s Dwarf House line of full-service restaurants. So far, it looks like the sons will carry on in the tradition of their father.

Culture Clashes

The values embodied in the leadership of Chick-fil-A are clearly conservative, which is fine if they resonate with you. When they don’t resonate with people, it can make for some interesting culture clashes.

In 2012, Dan T. Cathy was seen as openly opposing same-sex marriage, conforming instead to what he called the “biblical” definition of marriage (CNN). This resulted in a groundswell of criticism and calls for a Chick-fil-A boycott. The good news for Chick-fil-A franchise owners is that those kinds of boycotts rarely make much of a dent in a chain’s operations – especially one that has managed to come up with a winning fast-food formula (Boston Globe).

Still, Ventura High School’s principal, Val Wyatt, banned Chick-fil-A from being used for student event fundraisers based on what she perceives to be the chain’s “political stance on gay rights” (Fox News). But on the side of Chick-fil-A, a group called The Alliance Defending Freedom sent the school a letter reminding it that it doesn’t have the right to discriminate against businesses for their views on marriage (One News Now).

Devoted Employees and Customers

The values espoused by Chick-fil-A leaders apparently don’t take away from the fact that it’s a great place to work. Glassdoor’s survey of companies where employees are satisfied with the culture and values of their employer, Chick-fil-A ranked #7, not far behind such companies as Twitter (#1), Google (#3) and Facebook (#5), and was the only fast-food chain to make it into the top 10. The rankings are based on reviews from current and former employees with first-hand experience of the companies’ cultures and values (Glassdoor).

Customers are also giving the chain high marks as it also made 24/7 Wall Street’s Customer Service Hall of Fame. As it turns out, Chick-fil-A is the only company to make the top 10 of both of those lists (Business2Community). Chick-fil-A also seems to do a uniquely good job at satisfying children (or their parents, at any rate). One study showed that the chain satisfied 83% of customers for “overall appeal to kids,” while McDonald’s only came in with 79% (The Daily Signal).

Running “Afoul” of Federal Nutritional Guidelines

It’s hard not to chuckle when you read a news story that school lunch nutrition is being considered a national security issue (National Review). Then again, when you’ve got the Defense Department and a whole group of retired military generals saying that one out of four Americans are essentially “too fat to fight,” it’s worth taking a closer look.

First Lady Michelle Obama has attempted to get serious about obesity by requiring schools that want federal subsidies for school lunch programs to adhere to stricter nutritional guidelines, which is going to mean ruling out some of the fast-food offerings that have crept into many schools (Huffington Post). Whether that amounts to the First Lady declaring war on Chick-fil-A (Townhall) is highly debatable.

Menu Makeovers

Most people don’t want to eat a chicken sandwich for breakfast, so Chick-fil-A has been experimenting a lot in recent months with different menu options to try and hit the sweet spot for early risers. Several different test markets have rolled out five new breakfast options, three of which are under 300 calories (egg white chicken grill, Greek yogurt parfait, and multigrain oatmeal). The other two new offerings include chicken and waffles at 400 calories and cinnamon swirls at 310 calories (The Telegraph).

The chain’s more recent emphasis on low-calorie options makes sense given the increasingly health conscious U.S. population, and Chick-fil-A boasts at least 10 grilled chicken meals that come in at under 500 calories (Broadwayworld).

QSR Coffee Milestone

Chick-fil-A made quick-serve sector history by being the first QSR chain to offer a specialty-grade coffee on its menu. This is coffee made specifically for Chick-fil-A, and each cup served means more direct revenue for the Central American family farms that are part of the THRIVE Farm Network. This is a high-quality approach to coffee as a specialty grade must meet the standards of the Specialty Coffee Association of America – and only about 10% of coffees around the world would pass the test.

The arrangement eliminates enough layers in the supply chain to allow THRIVE farmers to make as much as 10 times what they would make in a more traditional model (Chick-fil-A press release). Needless to say, giving the chain a boost in the direction of a more sustainability-focused mission is not a bad thing (brandchannel).

Unique Opening Moves

Chick-fil-A takes a unique approach to its franchising operation. It engages in a serious amount of vetting for its franchise operators because the company wants them to be aligned with the chain’s values. The company charges an initial franchise fee of just $5,000, which is unheard of among fast-food franchises. The company literally takes care of everything, from location selection to store construction and all the equipment. The company rents everything to the franchisee for 15% of the restaurant’s sales as well as 50% of the pretax profit remaining (Forbes).

But witnessing the opening of a brand new Chick-fil-A is a sight to behold. People often camp out all night because of the chain’s “First 100” promo for new locations – the first 100 people through the door get free meals for an entire year in the form of 52 meals pre-loaded onto a digital gift card (CTNow).

The Times, They are A-Changin’

Chick-fil-A has shown a degree of flexibility that is surprising given the chain’s conservative approach. From healthier menu options to coffee with an eye on equity for farmers, the chain is keeping in sync with changing times, even showing leadership in the fast-food and QSR sectors with some of its initiatives. As with many chains, some of the moves are the result of consumer pressure, such as the company’s concession to remove all antibiotics from its chicken after the self-proclaimed Food Babe drew attention to it (Bloomberg Businessweek).

It took Truett Cathy quite a few years to perfect the world’s first takeaway chicken sandwich, but those years of effort continue to pay off in spades as the chain’s signature offering nailed Consumer Reports’ No. 1 ranking as Best Chicken Sandwich (Forbes). This is one chain that will continue to make its mark on the American fast-food landscape long after the passing of its founder.

The 8 must-read news stories presented above keep you on the leading edge of all the latest developments about the Chick-fil-A franchise.

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