The Rise Of Chick-fil-A
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The Rise Of Chick-fil-A

Chick-fil-A. It’s a fast-food chain
with chicken sandwiches said to be so good, even McDonald’s
wants to steal them. And it has a reputation so
controversial, entire cities have banned the restaurant from
their airports. Critics say Chick-fil-A has a
history of supporting and donating millions of dollars to
anti LGBTQ organizations, which has drawn the ire
of lawmakers and civilians alike. Chick-fil-A’s values are
not Chicago values. But it also has its
share of ardent supporters. Whatever you think of the
company’s politics, Chick-fil-A’s sales are on a tear. As of June 2019, it is the
third biggest restaurant chain in the U.S. by system-wide sales. And it generates the most sales
per store of any other fast-food restaurant in the country. The ascent is so rapid, that
even McDonald’s and Popeye’s are taking note. In July 2019, McDonald’s franchise
owners demanded the company add a Southern style chicken sandwich to
its menu in order to keep pace with Chick-fil-A. A month later, Popeye’s debuted its
own chicken sandwich on a buttered roll with pickles, the first
to be sold by the chain nationwide. Chick-fil-A is also eating market share from giants
in the chicken category like KFC and Wingstop. So how is it that a
restaurant that’s ensnared in controversy, and closed on Sundays, is next in
line to overtake Starbucks and McDonald’s? It all started in Atlanta,
Georgia, where Chick-fil-A’s founder, Truett Cathy was raised and where
the company is now headquartered. Cathy grew up watching his
mother prepare chicken in traditional southern fashion. In 1926, the 25-year-old and
his younger brother cobbled together about $10,000 to open
a diner called Dwarf Grill. Legend has it, that’s where
Cathy invented Chick-fil-A’s original chicken sandwich, fried in peanut oil
and served on a bun with pickles. The menu item regularly sold out. So in 1967, he opened
the very first Chick-fil-A in the Greenbriar Mall in Atlanta. From the outset, Cathy implemented a
policy still in place to this day. All stores would be
closed on Sundays. A devout Christian, he reasoned
that Sundays were for spiritual worship. Cathy carried those Christian values
with him to Chick-fil-A’s flagship store, which featured an upbeat
logo of a bright red chicken. Cathy said the A of the
company’s name represented grade A chicken. He was one of the first to
envision putting fast food in malls, and as malls began to grow
in popularity, Chick-fil-A was taken along for the ride. Between 1971 and 1974, Chick-fil-A tripled in size, expanding into the
rest of Georgia and the Carolinas and continuing through
the south and southwest. In 1986, Chick-fil-A decided to
grow beyond malls by opening its first freestanding restaurant. By 1993, its 500th
restaurant had opened. But this pushed it into
competition with established chicken focused fast-food chains like KFC,
which also opened in the south fifteen years
before Chick-fil-A. Chick-fil-A didn’t have as much money as those
companies to spend on advertising, so it decided to make
a splash another way. In 1995, it put up huge
billboards on the side of highways in the south east. The first billboard featured a pair
of cows scrawling “eat more chicken” to try to get
people to stop eating beef. The campaign went viral
and it worked. In 2000, the privately held
company hit one billion dollars in sales, doubling its performance
from when the billboards first debuted. It also rose to the third largest
fast food chain in the chicken category behind KFC and Popeye’s. That was also the year Kathy
and his three children signed a covenant promising to
uphold Chick-fil-A’s principles. The agreement included staying closed
on Sundays and never taking the company public. The company culture is very unique
and has clearly led to a lot of
success and culture…it’s all interlocked. Like you pull one strand of
it and the whole blanket can unravel. And sometimes if
a company is public, someone might want to pull out
a strand and might not realize that’s the strand that could
unravel the whole blanket here. Chick-fil-A’s fast paced growth was also
fueled by a few key innovations in its
operating structure. Each franchise is owned by an
independent operator who usually has just one unit and no other
business ventures, a model that’s still relatively unique in
the fast-food business. This allowed franchise owners to be
focused on the restaurant and truly connected to the community. Employee makeup is another
differentiator for the brand. Chick-fil-A has said that two thirds of Chick-fil-A
employees have grown up working for the company, doing shifts in
high school and college, and ultimately returning for a
career with Chick-fil-A after graduating. Chick-fil-A is extremely selective of who is
even allowed to become an operator. That structure has created
a network of experienced franchise owners who are
loyal to the brand. It’s the main reason why they’re
successful because they have these people that are in the
stores every single day. They’ve gone through a
heavy training process. They believe very strongly in
the brand and they’re interacting with customers. So they are interacting
with the employees. They are interacting with everybody,
and it really works. The franchise agreement also allows
operators to start restaurants for an extremely low cost. The initial fee is just $10,000 . In comparison, the fee at
McDonald’s is $45,000 and Wendy’s is $40,000. Unburdened by the debt of
a large initial fee, Chick-fil-A franchisee operators are able to put
more of their funds into growing and improving their store. The closed on Sunday policy
also applies to the Chick-fil-A’s operating in stadiums. It’s Mercedes Benz location even
remained closed when the Super Bowl was held there in 2019. Analysts say the policy comes
with a hefty price tag. If you do the math, I think
it works out to roughly $1.7 billion dollars in system-wide
sales that are lost by being closed on Sunday. Now, again, that’s assuming you just
opened up on some days and everything else works normally. But they also say being closed
might actually help the chain provide better service. Every employee can look forward to
time off no matter how hard they’re working Monday
through Saturday. And sometimes the rest and
relaxation can do a person real good. On top of that, you know, the
guests like the better get to the Chick-fil-A restaurant before Sunday comes
because if they find the time on Sunday and they have that
craving that Sunday and they show up on Sunday, not get any
food from that Chick-fil-A restaurant. In 2018, there
were 2,352 Chick-fil-A’s in business with 234 in malls, 264 on college campuses and 73 at hospitals, businesses or airports. The culture of Chick-fil-A today
still focuses on the Christian values that Cathy founded
the chain on. Outside its Atlanta headquarters,
a plaque with Chick-fil-A’s mission statement still hangs. Analysts point to the chain’s religious
backbone as a driving force behind the company’s number one rank
in customer service for four years from 2015 to 2019. In a 2013 survey of drive
through s, Chick-fil-A employees were reported to have smiled 91.4% of the time, while
employees of the next highest chain, KFC, smiled 78.5% of the time. Basically, you’re starting to see that
they’re almost a little bit of a lifestyle brand , you
come in and its an experience. From the minute you walk in
you’ve got that fresh-face kid who’s, you know, greets you, “thank
you,” you know, they’re polite. They’re walking around helping you
etc, its beyond just a transaction, ita an
entire experience. And I think you’re starting to
see some of the bigger brands, really trying, trying, you know, as much
as they can to mimic that and trying to give
you an experience. Chick-fil-A’s christian values have also
been a source of major controversy in recent years. In July 2012, Chick-fil-A came
under fire after Truett Cathy’s son and the company’s current
president, Dan Cathy, publicly expressed his views
on gay marriage. He told the Baptist Press that
he was guilty of supporting the biblical definition of
a family unit. The comments incited backlash in
the form of boycotts, an LGBT kiss-ins at Chick-fil-A
restaurants around the country. According to a brand’s satisfaction
measurement from YouGov, the company’s rating dropped to its lowest
level in two years following the comments the day of
Dan Cathy’s first comments. Chick-fil-A’s rating was 65,
19 points above average. But four days later, the
chain had fallen to 47. Even though the comments hurt
the brand’s reputation, the company’s annual sales improved. In 2012, the company saw $4
billion dollars in system-wide sales, a 13 percent increase
from the $3.6 billion dollars a year earlier. It also grew 7.4 percent in average sales per unit. Dan Cathy said in 2014 that
he regretted publicly commenting on gay marriage and that he would
stay out of political debates. But in 2017, reports revealed
that Chick-fil-A foundation had donated millions to what critics
say are anti LGBT groups. Such as donations to the Fellowship
of Christian Athletes, a sports ministry that believes homosexual misconduct
is unnatural in the eyes of God. Again, sales remained unharmed. Chick-fil-A pulled in $8 billion dollars in
system-wide sales in 2017, up 15 percent from the previous year. And the company has still
not redeemed itself among LGBT supporters. During the 2019 Pride Parade in
New York City, attendees taped a large X over one
of Chick-fil-A’s storefronts. Between 2017 and 2018,
system-wide sales improved 12.8 percent from $8 billion
dollars to $9 billion dollars. Its sales per store is higher than
any other fast-food chain at $4 million dollars. McDonald’s generates $2.7 million dollars a unit. And in 2019, it became the
third largest restaurant chain in America by system-wide sales. It surged past Wendy’s, Burger King,
Taco Bell and Subway in just one year. Since 2007, Chick-fil-A has doubled
its number of stores to 2,400 restaurants. The majority of its restaurants are
still in the south and southwest. Texas, for example,
tops the chart with 391 restaurants, while
Georgia has 218. From its history of store openings,
however, it seems the company is slowly working to expand
its foothold in other regions. Between 2011 and 2018, for example,
the company grew from having one location in New
York to having 17. 25 years ago, this was a
regional concept that was much smaller. And today, know depending on
what source you use, it very much is the third biggest
restaurant concept in the whole country. And they’re still under-penetrated some
of those heavily populated parts of country. They aren’t all open
on Sundays at all. So they’re a big player. The chain is also a growing
threat to other fast food chains. Technology estimates that Chick-fil-A
tallied over $10 billion dollars in revenue in
2018 and grew 13.5 percent, while McDonald’s
grew just 2.5 percent. In July of 2019, a group
of McDonald’s franchise owners signed a joint letter asking the company to
add a southern style chicken sandwich to its menu The company is an especially big
threat to other chicken focused restaurants. Between 2009
and 2018, Chick-fil-A grew from owning 19.3 percent of the chicken
fast-food market to 38.5 percent. Their chicken venue
doesn’t change. We are experts in chicken and
we will occasionally give you something additional spicy chicken, or
like I said, finish or whatever it is. But by being maniacally focused
on what they do, it allows them to then be
focused on all those extras …the service, the atmosphere. You know, they’re not always searching
for: What’s that next big LTO. The energy of their brand and
what they do day to day is just, once again, growing their
brand from the perspective of excellence. So is there a
ceiling for Chick-fil-A? Truett Cathy passed away in 2014,
leaving his three children to inherit the company and the
$11 billion family fortune. Dan Cathy is now the company’s
chairman and CEO, while his brother Bubba, is an
executive vice president. The private company declined to comment
for this piece, and is secretive about its financial
information and goals. But analysts say that if
Chick-fil-A manages to maintain its growth, there are major regions that
the chain has yet to take over. Chick-fil-A plans to open its
first international location in 2019 in Toronto, and plans to open
at least 15 more locations in Canada. Looking ahead, they just need to
make sure that, you know, they have the the
management infrastructure because, you know, as any company
gets bigger and bigger, it just becomes that much more challenging to
make sure the quality of work remains high. So, you know, if I had
to guess, will they achieve that? Yes. But there’s no 100
percent certainty in the future, and I’m sure they’re aware of
that and trying to work as hard as they can to make sure the
odds of success for them are as high as they can be.

100 thoughts on “The Rise Of Chick-fil-A

  1. how come no one knows/mentions there is/was a chick-fil-a in calgary airport Canada??? its like an episode of twilight zone. Toronto is not the first.

  2. I don't care what u think about Chika Filet it's all about your fake religions.Prove me wrong America!

  3. Halal is Jewish and it's quite clear they had White Christian America!

  4. I don't think anyone is surprised that hatred sells. This is America. Sad truth is most ppl just don't care,ppl just want their food. Personally,I don't think the chicken is worth it.

  5. Probably has to do with the fact that Chik-fil-a takes great care to train its employees to be friendly and helpful. Every time I have gone to one of their restaurants, their staff has been noticeably nicer than that of their competitors. Also, their peanut oil-fried chicken is DELICIOUS. Seems pretty simple to me.

  6. Question: "How is it that a restaurant ensnared in controversy and closed on Sundays is next in line to overtake Starbucks and McDonalds?" Answer: Because 30% of the country still thinks Trump was a good idea, half the elected officials (read GOP) refuse to pass the Equality Act, and Dapping and Fortnite are our countries favorite pastimes. Is anyone surprised??

  7. Why give this horrible company the press? Are you not making money off promoting this "business case" on CNBC and ultimately relying on the companies fame to draw viewers? How are you any different CNBC?

  8. And their breakfast sandwiches are so yummy! Plus must restaurants have a playground inside for kids and often kids activities with free food once a week!

  9. I been couple of times to chick fil a, nothing special & after this video am not bothered again. KFC is also BS here in USA. I prefer to go to local restaurants.

  10. Chic fil A will make a killing in Canada. I’m surprised they don’t have a store yet. You talk about customer service and friendliness. Chic fil a was made for Canada

  11. Who cares that they donate to anti LGBTQ activists? As a private company they can do whatever they feel like. Thats their belief and not everyone is going to agree. so be it. that’s how the world works. They still have the best service and best quality fast food.

  12. LGBT want to have their freedom of speech and be accepted for the way they are but yet they want to stop the owner of chick fil a from having his own opinion? The continued rise in sales shows that nobody cares about the LGBT controversy. People just want food. Not everyone is going to have the same opinion as you or agree with you on everything. Accept the difference and move on

  13. McDonald’s will survive for a long time because it’s menu is “diversified”

    But you can also argue it’s stretching themselves too thin by making it harder to keep up expectation and giving too many options consumer can’t choose.

    Being specialized mean you are the best but also mean if that thing fail you are entirety crippled.

  14. Chick-fil-as are no nonsense, clean, respectful, great service, and delicious food. They beat the competition, while taking one day off every week, Damn that's cold.

    Sidenote, I feel fine after eating at chick fil a, can't say the same for McDonalds.

  15. Chick fil A all day! Even the inversion is affordable to anyone and so less to compromise in the startup.

  16. I don't think being closed on Sunday hurts the company's profits. If someone want to eat at Chick'fil'A twice a week, they're going to eat at Chick'Fil'A twice a week whether they're open 6 days a week or 7 days a week.

  17. That's just stupid. If you donate to anti-LGBTQ organization, you get protests from LGBTQ organization. If you donate to LGBTQ organization, you get protests from anti-LGBTQ organization. Therefore, the best place to donate is charity/ organization which has no opposing organization at all

  18. We humans are smart enough to deal with LGBT
    unlike other anmals. Tell them to wash there hands and let them work Sunday they have no kids.

  19. The success is the service and the drive thru system. Why deal with a nasty American McDonald's where the workers act unhappy to see you and have no interpersonal skills. Starbucks is usually better than McDonalds but still a gamble. 95% of the CFA employees are friendly and make you feel special. I see them deal with hundreds of people and keep up a positive attitude the whole time.

  20. Every year to protest "Pride", I save up and spend it all in a Chick-fil-A. Makes me smile.
    Wanna protest "Pride", get yourself some Chick-fil-A.

  21. Chick-fil-A is like Trump, the more the fake news bashes him, the high he achieves…. It only God who can turn around things for people and companies when they respect his values. PERIOD.

  22. They do fast food correctly and people who don’t like or support LGBT peeps will most likely support Chickfil-a more .

  23. Finally!

    Not a MacBook @ 10:29

    Just kidding.
    I do not care what computer you use, as long as your work continues to be great.
    Keep it up!

  24. It is a company with morals…so it scares a lot of people … thats funny!
    Hey companies take notes, they treat employees right, so they are happy which translates to it treats its customers good, it is a simple concept.
    With 97% of all religions that share the same concepts in the USA, I don't think most people are offended by the companies morals… You go in, ya get food, ya get out… Its not like they are pushing morals on you thru the drive thru or anything. They smile and take your order…you don't hear anything like " Do you want salt , pepper, or Jesus?"
    Just an observation but…It seems like these people are never offended about Islam and rights with women…. but freak out on a religious man who sells chicken… we live in a crazy world i tell ya!

  25. It's funny that McDonald's franchise owners were more worried about getting a chicken sandwich than improving their customer service, which shows to be the backbone of Chick fil a.

  26. Hate how people always make it political, I mean its a chicken restaurant, why are you protesting because the owner has his own personal values and beliefs!
    He’s allowed to have them!

  27. I work at an airport in Europe. Americans are by far the fattest people who land at the airport. People don't need to cook healthy food since there is so much cheap fast food around.

  28. I'm so proud that they financially support anti-LGBT organizations. This company is protecting now days kids and future generations minds from something that's very wrong with the world… the influence of the LGBT movement. I have my own business and I always donate to those good organizations, that movement has to be stopped.

  29. A lot of the reasons I go to Chick Fil A still is because of the freshness of the food. I've never got a cold sandwich or fries. It's always made to order, not only because of the long lines where they constantly make food, but the way they package the food keeps it hot. It's always been consistent food for me.

  30. Worth noting: the company hires gays and sells food to who ever walks up to the counter. No discrimination at all. Zero.
    Also, Chick pays $3 above minimum wage! The employees really appreciate having Sundays off.
    My son works at one, part time, and enjoys working there.

  31. LGBT COMMUNITY: accept us for who we are!! We demand it…
    LGBT COMMUNITY: I can't believe some people don't support or accept us

    WTF?? is with your double standards, you want the world to accept your different views but you can't accept different views that are against your belief? This is the biggest problem in the west, everyone is easily triggered and wants everybody to support and accept their ideas but also tries to burry or vilify every other belief.

    Just pick one damn it… You either accept the right of others beliefs in the society or you make one common belief like in communism

  32. Soon these CNBC videos my become a must watch for all business students in universities and colleges.
    Very Quality Content.

  33. The food is beyond basic. But the speed and service always make it a good choice. You won't get the best chicken. But you will get it quick and with a smile.

  34. Literally the only fast food place where the taste is worth the calories and money hands down. I hate their views on the lgbtq community but God damn that chicken is fire 🔥

  35. I would like to try chickfila in Australia. I'm over McDonald's,kfc,subways. Food. These companies sometimes stuff people's orders and disgusting food

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