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Chick-fil-A: Billionaire Enterprise Replaces KFC

Business
Chick-fil-A: Billionaire Enterprise Replaces KFC

There is a Chick-fil-A advertising slogan that says “We didn’t invent the chicken… just the chicken sandwich!” Well that little sandwich changed a company’s destiny. Chick-fil-A is a billion dollar Restaurant Company that has officially replaced Kentucky Fried Chicken as the “King of Chicken.” In 2013, Chick-fil-A sales passed $5 billion leaving Kentucky Fried Chicken behind at 4.2 billion. Chick-fil-A has 1,775 stores nationwide, and KFC has 4,491 stores worldwide, but for some reason Chick-fil-A stores triple in sales volume. Chick-fil-A has a rich history and a special story that has made it the empire it is today.

Early Years

Original Dwarf House location

Chick-fil-A was originally a diner style restaurant birthed in Hapeville, Georgia in 1946. After serving in WWII, S. Truett Cathy founded the restaurant with his brother Ben Cathy. Truett sold his car and with $4,000, they opened a restaurant. They called it the Dwarf Grille because it was small with only 10 stools and 4 tables. They featured steak filet with lettuce for only 30 cents and the location they picked was golden. The Dwarf Grille was near a Ford Motor plant, and they had hoped it would create business for them. The Dwarf Grille was an instant success with plant workers, and word spread quickly around town about the good food at The Dwarf Grille. Unfortunately, within two years of opening the business, Ben Cathy was killed in a plane crash. S. Truett Cathy continued on and opened another Dwarf Grille, renaming the restaurant later to the Dwarf House.

Fast Food

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Truett started noticing that his customers would order the fried chicken filets and they would place them between two of their buttered rolls, making a sandwich. S. Truett loved this idea and started experimenting with it and created the first “chicken sandwich”. He worked with a fast cooking fryer to perfect the sandwich. He was aware of the emerging fast food industry and noticed that shopping malls were starting to become more popular. If he could cook chicken fast, and make his signature chicken sandwich, he could potentially enter the fast food industry. The signature sandwich needed a name. They dabbled with “chicken filet” or the “chicken steak sandwich” and finally S. Truett came up with a marketing play on words and dubbed it “Chick-fil-A” (The “A” standing for high quality food). In 1967, they opened their first “Chick-fil-A” at a food court in a local mall.

Company Culture

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Chick-fil-A has a pretty unusual way of doing business. They have company ethics and standards that are not common place these days. For one, all Chick-fil-A franchises are closed on Sundays, Christmas and Thanksgiving in order to give all employees rest. S. Truett is a devout southern Baptist. Cathy states in one of his books “I was not so committed to financial success that I was willing to abandon my principles and priorities. One of the most visible examples of this is our decision to close Sunday. Our decision to close Sunday was our way of honoring God and directing our attention to things that mattered more than our business.” He knew he hated working Sundays, so why should he make anyone else work?

Franchise

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Along with their unusual way of doing business, Chick-fil-A also has an unusual philosophy on franchising. With most companies, you need to pay a substantial amount of money to buy and launch a franchise. At Chick-fil-A, it’s a $5,000 investment into the franchise. Chick-fil-A corporate picks the geographic location and builds and owns the actual restaurant. It is a rigorous application process. They receive up to 25,000 or more applications a year, and they have approximately 70 spots open a year. When selected, you are trained by the company and are considered an “operator” of a franchise and paid a salary of about $190,000. Chick-fil-A has the industry lead in sales per restaurant franchise, even beating out McDonald’s in sales per restaurant.

Funny Advertising

ChickFilA_EatMorChikin

 

Chick-fil-A is popular for their advertising campaigns. Some of their well-known ads are “Eat more chikin!” a slogan misspelled by a bunch of cows. The goal of the cows is to come together to encourage Americans to cut back on beef consumption and stop eating at their competitors like McDonald’s and Burger King.

Charity

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Chik-fil-A gives a large percentage of its earnings to charity. Truett Cathy established his charity, the WinShape Foundation, to help “shape winners.” The foundation has created several charitable programs such as, long-term foster care homes, summer camps, scholarships and marriage retreats. In addition, each restaurant operator has their own charitable groups they support, as well.

Gay Marriage Controversy

appreciation day final

In 2011, the media reported that Chick-fil-A had donated to organizations that opposed same-sex marriage. In July 2012, CEO Dan Cathy had made comments about his support for traditional marriage. His comments, coupled with the donations, created a huge fall out in the media. Chick-fil-A received backlash from gay rights activists. At the same time, the company received an outpouring of support from their loyal customer base. A “Chick-fil-A Appreciation Day” was invented in response to the backlash and thousands of customers showed up. Sales increased by 30 percent. Soon after all the controversy, Chick-fil-A did release a statement “The WinShape Foundation is now taking a much closer look at the organizations it considers helping, and in that process will remain true to its stated philosophy of not supporting organizations with political agendas.” They also made it clear on their website that “The Chick-Fil-A culture and service tradition in our Restaurants is to treat every person with honor, dignity and respect –regardless of their belief, race, creed, sexual orientation or gender.” CEO Dan Cathy has decided to steer the company clear of political arguments in the future.

Chick-fil-A’s Future

chik fil a urban

Chick-fil-A is now expanding into big cities and urban areas like Chicago, New York and Los Angeles. They have spent over 60 years of their business expanding into suburban areas throughout the southeastern United States, but now they are moving into all the larger markets in the country. Get ready for a Chick-fil-A to show up near you.

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