Behind Chick-fil-A’s Unconventional Franchise Model | WSJ The Economics Of

Summary

The Chick-fil-A chicken sandwich, America's favorite fast food, is renowned for its unique recipe and high-quality service. With a focus on a small menu and a hands-on franchise model, Chick-fil-A has become the third-largest US restaurant chain. The company's commitment to values, including closing on Sundays for rest and reflection, has contributed to its success and customer satisfaction.

Takeaways

• 🍗 Chick-fil-A's chicken sandwich is considered America's favorite fast food item, according to industry surveys.
• 🏅 Chick-fil-A is the third-largest U.S. restaurant chain by domestic sales, thanks in part to its famous chicken sandwich.
• 🧑‍🍳 The original chicken sandwich recipe, developed by Truett Cathy in 1967, remains unchanged and is kept secret.
• 🍽️ Chick-fil-A focuses on maintaining a simple menu, specializing in chicken sandwiches and keeping consistency across its products.
• 🚗 Chick-fil-A uses innovative ordering methods, like upstream ordering, to enhance drive-thru efficiency and customer satisfaction.
• 🏗️ Chick-fil-A owns all of its locations and hand-picks franchise operators through a highly selective process.
• 📊 On average, Chick-fil-A locations generate more revenue than many competitors, despite slower expansion compared to other chains.
• 🙏 Chick-fil-A's business strategy is rooted in Christian values, and its restaurants are closed on Sundays to give employees a day of rest.
• 🧑‍🤝‍🧑 Employees are trained to provide excellent service, with the signature 'My pleasure' greeting and a focus on warm customer interactions.
• 🎗️ Chick-fil-A has faced scrutiny for its charitable donations, but the company remains committed to serving all customers and focusing on issues like homelessness, hunger, and education.

Q & A

What makes Chick-fil-A's chicken sandwich unique?

Chick-fil-A's chicken sandwich is made with a breaded boneless chicken breast, two pickles, and served on a buttered toasted bun. The recipe was developed using a pressure cooker and peanut oil for faster cooking, and has remained unchanged since 1967.

How does Chick-fil-A ensure consistent quality across its restaurants?

Chick-fil-A uses a unique franchise model where the company owns all the locations and selects operators through a rigorous interview process. This allows the company to maintain control over quality and ensure that each location upholds its standards.

Why does Chick-fil-A focus on a smaller menu compared to other fast food chains?

Chick-fil-A's business model focuses on simplicity, with a small menu centered around chicken sandwiches. This approach helps customers easily decide what they want, and the company believes consistency in its offerings is key to customer satisfaction.

What is upstream ordering, and why does Chick-fil-A use it?

Upstream ordering involves taking a customer's order while they are still in line, typically by employees with tablets. This practice, which started before the pandemic, has become essential for speeding up service in the drive-thru, especially after dining rooms closed.

What is Chick-fil-A's approach to franchising?

Chick-fil-A does not seek passive investors. Instead, it selects a small number of operators who go through a highly competitive and extensive interview process. Operators are responsible for a single location and are deeply involved in the restaurant's daily operations.

How does Chick-fil-A compare to other fast food chains in terms of average restaurant revenue?

On average, Chick-fil-A restaurants make far more revenue per location than most of their competition, despite having fewer locations overall. This is largely attributed to their focus on quality and a hands-on franchise model.

Why are Chick-fil-A restaurants closed on Sundays?

Chick-fil-A's decision to close on Sundays is rooted in its founder Truett Cathy's Christian faith. It allows employees to rest and, if they choose, attend church. The company believes the anticipation of being closed on Sundays helps drive sales the rest of the week.

How does Chick-fil-A's initial franchise investment compare to other fast food chains?

Chick-fil-A requires an initial franchise investment of only $10,000, significantly lower than competitors like McDonald's, which requires $45,000 plus an additional $1.3 to $2.3 million for startup costs.

What role do Christian values play in Chick-fil-A's operations?

Chick-fil-A's business is influenced by Judeo-Christian values, though employees do not have to be Christian. The company emphasizes values like humility, generosity, and creating a positive impact on everyone they serve.

How has Chick-fil-A's growth strategy evolved over time?

Chick-fil-A has been expanding steadily, opening about 100 new stores annually and branching out to Canada and Puerto Rico. While their growth rate is slower than some competitors, they focus on maintaining their values and quality.