The founding of the ‘Dwarf Grill’ fast-food restaurant in 1946 in Hapeville, Georgia, may not seem to be a noteworthy moment in history. What the late S. Truett Cathy started, in a restaurant its diminutive size reflected its original naming, was eventually rebranded as ‘Chick-Fil-A’ and is now the third-largest fast-food chain in the world.
Chick-Fil-A, Inc. ($PRIVATE:PRIV_CHICKFILA) was registered in 1961, after Cathy developed a method to use a pressure cooker to fry chicken in the amount of time it would normally take to make a hamburger. Its slogan, “We didn’t invent the chicken, just the chicken sandwich” was also trademarked in 1961.
Slow And Steady: 1960-1980
The first official Chick-Fil-A location opened in the Greenbriar Mall food court, in an Atlanta, Georgia suburb in 1967. It’s recognized as one of the early forays into combining food service with retail shopping. From the very start, Cathy was dedicated to remaining open six days a week, 24 hours a day, every day but Thanksgiving and Christmas. This policy has often been attributed to the vocal Southern Baptist views of Cathy, while he was noted as saying that he was simply too tired after working every day of the week to work on Sunday and he wouldn’t expect his employees to do what he couldn’t.
Aggressive franchise model: 1980-2013
During the 1970s and early 1980s the company expanded into new locations in additional suburban mall food courts. This practice held until 1986 when Chick-Fil-A pivoted to the focus of stand alone locations, with the opening of their freestanding restaurant on North Druid Road in Atlanta, Georgia. Since then Chick-Fil-A has grown to more than 2,300 locations in 47 states, with Hawaii being the next in active development. This leaves only Alaska and Vermont as the only states without plans for franchise growth. In 2016, the average gross profit per location was the highest in the fast food industry at $4.8 million (The second highest competitor, for example, was ‘Whataburger’ at $2.7 million, and in third place is ‘McDonald’s’ at $2.6 million).
The credit for Chick-fil-A's success is often given to company policy of politeness towards guests as well as a simple menu that rarely experiences changes or additions. Its popular billboards and advertisements that launched in 1995 featuring a rebellious cow painting the words “EAT MOR CHIKIN” still remain a staple in campaigns.
Becoming a franchise ‘Operator’ has a significant lower upfront investment than other fast food chains, with a by-in at $10,000. Chick-Fil-A retains ownership and selects locations, but covers all of the costs associated with building and real estate development. Because of this, and the highly profitable nature of individual franchises, applications for becoming an Operator are annually around 20,000. However, the company approves 75-80 a year, meaning only approximately 0.4 of applicants are approved. S. Truett Cathy stepped down from the chairman and CEO position in 2013 and passed it to his son, Dan Cathy. Before granting the chair and position, as well as his death in 2014, S. Truett Cathy required his children to sign contracts stating that Chick-Fil-A would always remain a private company, although the contract allowed provisions for the family to divest their interest.
International, political stumbles and course corrections: 2013-Today
The aggressive, steady growth domestically has not translated internationally. Its first location to open outside of the United States in 1994 in Alberta, Canada in the University of Alberta student center food court performed poorly and was shuttered within three years. Its second Canadian location opened in the Calgary International Airport in Calgary in 2014 and closed in 2019.
Attempts at expansion beyond North America have also failed to profit, with two such franchises opening in South America in 1996 and 1997 in Durban and Johannesburg, respectively, and closing before 2001. Two attempts to open restaurants in the UK in Scotland in 2018 and 2019 were met with protests against Chick-Fil-A’s anti-LBGTQIA stances and neither of the schemes moved beyond the initial six- to twelve-month pilot periods.
Experiences with controversy have not tempered their social media growth with incremental increases in Twitter Followers since 2012 when CEO Dan Cathy, son of the late founder, made negative comments on same-sex marriage and led to a number of boycotts and cities banning further expansion by the chain. In November of 2019 Chick-Fil-A released a statement that they were reversing policy of donating to charitable organizations that were anti-LBGTQIA, resulting in those who were in support of the controversial stance to stage their own boycotts at the company giving to pressure by “anti-Christian” groups. Despite this outcry, their Twitter following experienced a marked uptick afterwards.
Recently Chick-Fil-A has led the trend in corporate response to the Coronavirus. Notably by closing its dining rooms on March 15, 2020 and announcing on March 18, 2020 that it would provide paid sick leave for employees with confirmed cases of COVID-19. Several other fast-food chains, such as ‘Taco Bell’ announced similar policy shortly thereafter.
Will Chick-Fil-A’s recent shift away from anti-LBGTQIA public stances help the move into international markets and growth to every State of the Union? In the turbulent times of the COVID-19 pandemic, only time will tell.
About the Data:
Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.
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