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Franchise Chatter Guide: Chick-fil-A Striving to Step Out of Its Comfort Zone

by Franchise Chatter on September 27, 2016

in Chicken Franchises, Franchise Chatter Guides

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Chick-fil-A Sandwich Photo by roboppy

When it comes to describing the Chick-fil-A franchise chain, one word often comes to mind.


But these days, the 49-year-old quick-service restaurant chain, known for its famous chicken sandwich, is attempting to step out of its comfort zone in many ways – ranging from expansion to menu items to its ownership group’s approach to business and life.

Queens Opening Reflects Focus on Urbanization

On September 1, 2016, Chick-fil-A opened a new location in the borough of Queens in New York City. The Queens Center Mall location followed the Manhattan outlets that have opened since October 2015. The opening accentuated Chick-fi-A’s desire to open new locations in large urban areas rather than suburban locales on which they grew originally.

In keeping with usual practices at other Chick-fil-A openings, the first 100 local residents attending the grand opening received gift cards entitling them to a free meal at the restaurant every week for a year. Only residents of New York City’s five boroughs were allowed to attend the event, because Chick-fil-A wanted to introduce locals to the restaurant. But the franchise is owned by a recent arrival to Queens, Paul Daniels.

According to a Chick-fil-A news release, Daniels has a “long history” in the quick-service industry and worked as a company team member and director at two Chick-fil-A restaurants in Waco and Odessa, Tex. Before then, he managed the day-to-day operations of three EAT restaurants in London.

Plans call for Daniels to manage day-to-day operations and employ approximately 80 full- and part-time employees, paying them more than the $12 minimum wage. He will also build relationships with local organizations and businesses while also serving customers.

The third Chick-fil-A in New York City, the Queens location will partner with New York Common Pantry, a local food bank.

As per the chain’s practices, the Queens outlet will make most of its menu items from scratch and only use 100-percent whole chicken breast meat, without any fillers, hormones or additives. Each chicken breast will be hand-breaded to order and pressure cooked in 100-percent-refined peanut oil that is free of trans fats and cholesterol.

The Queens restaurant will source its bread locally by purchasing sandwich buns from Automatic Rolls of New Jersey and flatbread for wraps from Damascus Bakery in Brooklyn.

However, Chick-fil-A is looking well beyond New York as it continues to expand steadily.

Not Stopping Now

Chick-fil-A shows no signs of letting up as it continues to open, or announce plans for, new outlets across the U.S. on a frequent basis.

In recent months, the Atlanta-based chain has announced plans for, or already launched, new restaurants in locations ranging from Pine Bluff, Ark., to Lansing, Mich., to the Seattle area.

The expansion efforts mean that America’s largest quick-service chicken chain, which surpassed KFC in annual U.S. sales in 2014, according to a report by financial services firm Janney, is just getting bigger.

A Family Affair

Founded at a mall in suburban Atlanta in 1967, Chick-fil-A has steadily – some might say aggressively – expanded to become the largest quick-service chicken restaurant chain in the U.S. based on domestic annual sales. According to the company’s website, the chain operates more than 2,000 locations in 43 states and Washington, D.C., and, in 2015, annual sales exceeded $6 billion.

The chain was founded by the late Truett Cathy, the patriarch of the family that still owns the franchise chain today. Cathy opened his first restaurant, Dwarf Grill, in Hapeville, Ga., in 1946.

He is credited with pioneering the practice of opening fast-food franchises in shopping malls – a strategy which is now standard. Chick-fil-A says mall-based restaurants constitute an integral part of its business, and it has nearly 300 restaurants operating in major shopping malls today.

The chain also has 1,350 stand-alone restaurants, more than 30 drive-thru locations, and also operates a dozen Atlanta-area Dwarf House full-service restaurants that have an extensive menu and include a choice of table, walk-up, or drive-thru service.

Chick-fil-A also operates a few Truett’s Grill restaurants, which offer a full-service 1950s-diner-themed concept featuring a combination of the full Chick-fil-A menu and select items from Cathy’s original Dwarf Grill restaurant.

In a bid to break from tradition, Chick-fil-A also operates one Truett’s Luau location, which blends fresh seafood items such as mahi-mahi, ahi tuna, cod, calamari and shrimp as well as other Hawaii-inspired dishes.

In another bid to be non-traditional, Chick-fil-A has established a licensing program that permits licensees to serve Chick-fil-A food at almost 300 locations that include such settings as college campuses, hospitals, airports, and business and industry sites. Chick-fil-A also has a small number of satellite, or lunch-counter, concepts that cater to lunchtime customers in office buildings and high-traffic locations.

While the Chick-fil-A fare plays a prominent role in the company’s other brand offerings, the core chain’s menu has undergone significant change.

Chain Not Just About Chicken Anymore

The Chick-fil-A name is a play on the words “chicken filet” and stems from a boneless chicken sandwich on which founder Truett Cathy grew his business. In the old days, it probably could have been argued that Chick-fil-A was all about chicken, but that is no longer the case.

In the summer of 2016, the chain began testing new menu items featuring such ingredients as farro, roasted butternut squash, and chia seeds in hopes of attracting more health-conscious eaters. Chick-fil-A introduced two grain bowls: The Harvest Kale & Grain Bowl and the Egg White Grill Grain Bowl. It also commenced testing some new breakfast bowls containing eggs, hash browns, and cheese.

The Harvest Kale bowl included red quinoa, white quinoa, farro, roasted butternut squash, diced apples, and kale topped with goat cheese, feta cheese, tart dried cherries, and roasted nuts. It was dressed with a new light balsamic vinaigrette dressing. The dish could be served with or without chicken.

The Egg White Grill Grain Bowl, a new breakfast entrée, includes the same grain blend of red quinoa, white quinoa and farro, along with scrambled egg whites, grilled chicken and a Monterey jack and cheddar cheese blend.

David Farmer, Chick-fil-A’s vice president of menu strategy and development, has been quoted in many publications as saying that the chain’s salad items are constantly being revised. Clearly, they are also paying off at the cash register.

In fact, the same quote appears verbatim in multiple publications:  “We talk about the salad category like fashion; it’s changing all the time,” he is quoted as saying. “We overhauled our salad lineup in 2013. Since then, we’ve seen 50 percent growth in the salad category.”

Meanwhile, trade publication Eater reported that locations in San Diego, New York, New Jersey, Columbia, and Washington, D.C., were also testing a more traditional breakfast item: The more customizable Hash Brown Scramble, which included hash browns, scrambled eggs, cheese, and a choice of sausage or chicken nuggets served rolled up in a burrito or served in a bowl.

Eater also reported that Chick-fil-A outlets in San Diego, New York, New Jersey, Columbia, and D.C were testing a new, smoothie-like drink: The Berry Protein Blend, which contained a mix of whole grains, chia seeds, berries, and yogurt, along with the chain’s own soft-serve ice cream. The drink was topped with granola, “giving it at least the illusion of breakfast.”

The menu tests appear to cater to a trend whereby customers throughout the fast-food industry are demanding healthier fare. Time will tell which new items will become permanent, however.

Bonnie Riggs, foodservice industry analyst at the NPD Group, told Eater that fast-casual restaurant customers may want to eat healthier items, but for traditional fast-food eateries, the big money is in burgers, fries, and soft drinks.

“There’s about five percent of the population who are ‘clean eaters,’” she said. “But the vast majority of the population doesn’t even know what that means.”

While many fast-food chains are slowly adding healthier options to their menus, she added, those items are not intended to replace standard choices.

“When you go to a restaurant, you go for what that restaurant specializes in,” said Riggs. “You do not visit a fast food restaurant to eat healthier foods.”

However, Riggs also told Eater that the introduction of grain bowls could be a forward-thinking move for a chain like Chick-fil-A.

“Millennials and Gen Z lean more toward those kinds of food than the general population,” she said. “So maybe they’re trying to get ahead of the curve a little bit.”

But some long-time customers will not be swayed. She recalled her own company holiday party in 2015, when the caterer brought in food platters that included four huge bowls of kale salad.

“You know what was left over at the end of the night?” she said. “Four huge bowls of kale salad.”

Menu Changes Not Always Popular

Many customers have threatened to boycott Chick-fil-A over the removal of its spicy-chicken biscuit, but the chain is sticking to its decision.

One customer, who was among thousands threatening to boycott Chick-fil-A over the removal, wrote on Facebook that he “felt violated.” He said that he stopped at Chick-fil-A at least two or three times a week for years, alternating between spicy-chicken biscuits and spicy-chicken burritos.

Customers also criticized the company earlier about the decision to replace coleslaw with broccolini and kale salad and changes to sauces and dressings.

After some of those other moves were made earlier in the year, David Farmer, Chick-fil-A’s vice president of menu strategy and development, told Business Insider that only the least popular items were removed. For instance, the spicy-chicken biscuit accounted for only 0.5 percent of Chick-fil-A’s sales.

“We don’t want folks to think we’re walking away from classic Chick-fil-A items,” Farmer said. “But we are going to have to part with some things to make way for some new items.”

Customers Can Use Apps to Order and Pay Wirelessly

Some of Chick-fil-A’s changes involve new technology.

The franchisor has introduced a new mobile app that allows customers to order remotely and avoid lineups when they get to the restaurant to pick up their food. Chick-fil-A has encouraged app usage through free-food promotions – and they have worked well.

According to the chain, the Chick-fil-A One app was downloaded more than two million times within the first three days of its June 1 launch, ranking as the No. 1 free app in the Apple App Store during that time. As of July 2, the company stated in a news release, Chick-fil-A One had reached more than five million downloads.

In September, Chick-fil-A began offering a few new ways to pay electronically, enabling customers to tap their smart phones and pay wirelessly using Apple Pay, Android Pay or Samsung Pay outside of the Chick-fil-A One app. Within the chain’s software, Apple Pay and Android Pay can be used to add funds to a Chick-fil-A One Card.

But many customers have given the Chick-fil-A app poor reviews, contending that it does not work properly in many cases. The company will, undoubtedly, work to correct glitches and offer improvements, as it has done since launching the initial version of its app in 2012.

Chain Trying to Tone Down Its Attitude

While trying to modernize the business, Chick-fil-A is also attempting to be friendlier towards groups that do not share its owners’ staunch religious views.

Chick-fil-A has anchored some of its business practices to the Cathy family’s staunch Christian values. For example, Chick-fil-A restaurants are not open Sunday, in keeping with founder Truett Cathy’s wishes – which follow the traditional Christian belief that Sunday should be a day of rest.

For about the past few years, Chick-fil-A has also had to fight perceptions that it is an anti-gay organization. The group Equality Rights revealed in 2011 that the chain had donated more than $2 million to anti-gay rights organizations in 2009.

Chick-fil-A president and CEO Dan Cathy has also come under intense criticism, delivered via mainstream and social media, for being outspoken against same-sex marriage after the former U.S. law prohibiting it was struck down by the U.S. Supreme Court.

But Cathy has since expressed regret for his comments and stressed that Chick-fil-A takes an inclusive approach to its business.

“All of us become more wise as time goes by,” he told USA Today in 2014. “We sincerely care about all people.”

Around the same time, Cathy told The Atlanta Journal-Constitution that he has heeded the lessons from the public outcry against his comments.

“Every leader goes through different phases of maturity, growth and development and it helps by (recognizing) the mistakes that you make,” Cathy said. “And you learn from those mistakes. If not, you’re just a fool. I’m thankful that I lived through it and I learned a lot from it.”

In June 2016, several Chick-fil-A restaurants in Orlando delivered free sandwiches and iced tea – on a Sunday when their outlets were closed – to blood drives supporting victims of the gay nightclub terrorist attack. And, in 2015, an Iowa franchisee donated food to organizers of a local gay-pride parade.

However, Chick-fil-A has not won over all of its critics. When the chain announced plans to open a new location in Queens, New York Mayor Bill de Blasio and members of the New York City council called for a city-wide boycott of Chick-fil-A restaurants, contending that the company remains anti-gay.

Meanwhile, Ed Murray, Seattle’s first openly gay mayor, also vowed – but failed – to stop the company’s move to his city.

Other Signs of Progress

Despite its reputation for old-fashioned values and practices, Chick-fil-A is constantly testing new concepts, strategies and approaches.

After initially growing through openings in suburban malls and near big-box retailers, Chick-fil-A has changed its focus to what USA Today describes as “big cities and big-city dwellers.”

“The next big thing is urbanization,” company president and CEO Dan Cathy told the newspaper. “That’s where the future is heading.”

And, in addition to trying to appear conciliatory towards the gay community, Chick-fil-A is also showing considerable respect for customer diets, the environment and millennials.

In 2014, USA Today reported, Chick-fil-A opened a new $10-million test kitchen that has developed many new products, particularly salads, that have been unveiled in recent months. The firm has also announced plans to sell only antibiotic-free chicken within five years and already removed yellow dye from its chicken soup and may remove other ingredients considered unhealthy from long-time staples.

It is also attempting to curb use of items in packaging that are harmful to the environment and is a member of the Foam Recycling Coalition, which focuses exclusively on increased recycling of foam polystyrene after it is used by consumers.

According to Cathy, USA Today noted, fast food was all about taste and price for baby boomers. Today, though, millennials are also concerned about local sourcing, product quality and worker rights.

For them, he said, “it’s not just a product story any more – but the whole story.”

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