One Reason Why Chick-fil-A is So Successful

One Reason Why Chick-fil-A is So?Successful

How Restaurant CEOs Can Boost Profits in Real Time

How can QSR chains succeed in a world of shrinking QSR location footprints, increasing labor costs, ghost kitchens stealing market share, and a shrinking labor pool?

So, why is Chick-fil-A, So Successful?

I live in Fayette County, Georgia, where many of the Truett Cathy family—the founders of Chick-fil-A live. I am about 20 minutes from Hapeville, where their first restaurant was started in 1946.

Chick-fil-A is an intuition here in the South. Since I am from Boston, I only heard of them once I moved to Atlanta.

But why are they so successful?

With an average unit volume (AUV) up to four times greater than many direct and indirect QSR competitors, what is their secret sauce?

It is not just one variable; there are many. But, one driver of their success has been how they manage their unit locations.

They hire from the same pool of employees as everyone else does. Do they negotiate for the same real estate PADS as everyone else?

Yes.

Do they pay competitive labor costs based on geography as everyone else?

Yes.

Do their locations consistently outperform all other QSR's on a national basis.

Yes.

Why?

I have spent over 25 years in hospitality, working with many of the top players in the U.S. in many ways. I co-founded Aloha POS, originally called Ibertech and now owned by NCR. I have sat with many senior C-level food service executive teams, discussing their operating business systems and models and how they maximize their chains' success.

When you deconstruct Chick-fil-A's operating success model, I have observed three effective drivers that help them excel.

1.Chick-fil-A trains team members and focuses on employee coaching. They coach team members by position to meet and exceed their corporate performance standards. This strategy is not a "here is what you should know" methodology. It is a "here is what I need you to do" model. This coaching engagement approach dramatically affects how it drives team member outcomes and helps maximize lower-skilled, expensive labor productivity.

2.When driving corporate growth (franchise and non-franchise), focusing on profits, not just revenue is important. It is not only about Average Unit Volume Revenue (AUV). It is also about Average Unit Profit (AUP). Chick-fil-A is a "slow growth, not grab every available PAD as quickly as possible" franchise. They are a "strategic growth, build a successful business, unit by unit" kind of company.

3. Chick-fil-A is not a company focused on building brand awareness regionally with a huge marketing budget for TV and electronic ad media. Instead, it focuses on community marketing, sponsoring baseball teams, making food donations to good causes, and being a responsible citizen within a 5-mile radius of its store locations.

These three management models, all centralized around the theorem of getting big and implementing small, have propelled Chick-fil-A to extraordinary success in the QSR market.

Can any single-unit franchisee or CEO of a 10,000-unit chain do this – yes.

It is the model of getting big....but acting small.

By Paul DiModica. Paul is a partner at the Value Forward Group. Value Forward is a technology advisement and coaching firm that Helps Technology Companies Outperform Their Competitors. [email protected]