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Beyond the Arches

Beyond the Arches #4: Why the Chick-fil-A model works

April 13th, 2023 By Emily Norwood

Featured Story

Chick-fil-A: Why the model works

Chick-fil-A is one of the most successful quick-service restaurant brands in the U.S., going toe to toe with behemoths like Taco Bell, Starbucks, and McDonald’s in terms of revenue. And as other fast food chains struggle, it seems Chick-fil-A is continuing to gain momentum with stronger same store sales growth than its contemporaries. It’s worth considering what the company is doing differently and why its strategy is working. 

Much of Chick-fil-A’s success can be attributed to its unique 1-to-1 operator-to-location model. Unlike most brands, which are dominated by multi-unit franchisees who own hundreds of locations across multiple states and even countries, Chick-fil-A’s “1-to-1” model requires each location to be owned and run by a single operator. The company does not allow multi-unit franchise ownership. 

On the surface, restricting franchisees to a single unit may seem like an unnecessary handicap, but consider this: Chick-fil-A is incredibly selective about who they work with. The company only chooses about 80 new operators each year from an applicant pool of over 60,000 – a lower acceptance rate than the Secret Service. And money is no guarantee that you’ll land the deal. Chick-fil-A only selects operators who are demonstrably involved with their communities and have the dedication to persevere through the rigorous application process, which can include a dozen or more rounds of essays and interviews.

Why does everyone want in on Chick-fil-A? Well, it probably has something to do with their franchise model being one of (if not the) most franchisee-friendly in the industry. Unlike most parent companies, Chick-fil-A shoulders the bulk of the startup costs for new locations. A new franchisee can get in the door for as little as $10,000. Even though this means the parent company takes a larger share of the returns, the low initial capital investment puts franchisees in a great position for substantial financial success.

As we mentioned, though, the catch is the extremely competitive application process. It ensures that only the most dedicated, motivated local operators will be given the opportunity to open new locations. Chick-fil-A’s franchise model requires heavy day-to-day involvement by unit owners and provides intensive training for new franchisees. These operators are all in, which translates to personalized customer service, better quality control, and increased employee satisfaction – the perfect recipe for a few billion dollars worth of customer satisfaction.

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  • The US PPI rose very little in January and fell 0.1% in February, surprising analysts and stirring hope that inflation could be easing. The drop was led by a 36.1% decrease in the cost of eggs that brought welcome relief to both consumers and business owners.
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  • If you’ve been anywhere near a news outlet recently, you know the banking sector is struggling right now. A slew of recent bank failures has the markets on edge and may complicate the lending landscape in the near future.

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