09.28.18

Chick-fil-A’s success: What’s the secret sauce?

KARL R. LAPAN, PRESIDENT AND CEO OF THE NIIC

It’s a dog-eat-dog world out there and the restaurant business is no exception. Quick service chains are vying for market share and the top three are competing neck and neck with each other, according to the 2018 QSR Magazine Report. Per the report, McDonalds, Starbucks and Subway took the top three spots in that order.

But there’s more to the story here. Not ranked among the top five but worth mentioning is a chain that’s getting noticed, although less so than the big three mentioned in my introductory paragraph. Chick-fil-A was ranked No. 8 on the list, with $9 billion in annual sales.,

This figure isn’t too shabby, especially when you consider Chick-fil-A only operates 2,225 restaurants in 47 states—-and they are all closed on Sundays. This factor is nothing to gloss over.

Let’s break it down. When you look at the per store sales, the average Chick-fil-A unit made around $4,090,900 in 2017. This figure blows the leading chains out of the water. Per the report, McDonald’s brought in $2,670,320 in sales per unit, Starbucks, $945,270; and Subway, $416,860.

So, what’s the secret sauce? (Actually, their sauce recipe isn’t so secret after all.) Could it be their philosophy when it comes to operations? Could operating 6 days instead of 7 actually help, not hinder, their cause? Here are 3 reasons why I believe this might be the case:

  1. Closing drives intentional sales. Closed on Sunday, the restaurant chain creates more of a demand the other days of the week. The Chick-fil-A experience is more of a novelty, than say, that of a McDonalds’s hamburger. This menu staple is available most of the day, 7 days a week in U.S. markets.

  2. It fosters a healthy work environment. As their website explains, from the beginning Founder Truett Cathy set aside one day of the week for himself and his employees “to rest and worship if they choose.” By allowing employees to have a guaranteed day off, Chick-fil-A encourages work-life balance. And happy employees are productive ones, only adding to the bottom line.
  3. It speaks to customer values. While their stance on social issues has been controversial, many socially conscious customers appreciate that the company takes employee welfare seriously. And it’s more than just a day off a week. Since 1973, Chick-fil-A has given more than $35 million in college scholarships to employees.

Will this model continue to serve them well into the future? Will Chick-fil-A rule the roost someday? Experts believe so. By 2020, Chick-fil-A is expected to become the third-largest fast-food chain, surpassing Wendy’s, Taco Bell and Burger King, according to a recent report by Buzzfeed.

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