Why Chick-fil-A Just Works
It's difficult to get a true read on a restaurant after it first opens, especially when that restaurant opens to massive crowds the way Chick-fil-A did this morning in a Minneapolis suburb. Extra staff is on hand. Trainers are everywhere. And guys with Georgia accents and ACC neckties are paying attention to everything.
But we couldn't help but be impressed. We got there at 11:30. The line was out the door. And yet we got to the register in a couple of minutes, and had our food and a seat at a table less than five minutes after that. When we were done a smiling employee took our tray, and 30 seconds later another smiling employee got us a drink refill. We were out of there in less than 25 minutes.
Chick-fil-A is a remarkable concept that in just a few years took the title of the Nation's Largest Chicken Chain away from KFC. Its efforts to open the Minneapolis market explain how it's been able to do that.
The chain has done an awful lot of work trying to get customers to the Minneapolis locations. It held a celebration for each store back in August, complete with prizes and balloon rides and free chicken sandwiches and soda. Thousands of people attended. Yesterday, a tent city popped up at each of the two locations that were set to open today, as people waited all night to be among the first 100 customers in line so they could get free Chick-fil-A for a month. All of these efforts are typical.
But keeping those customers is another thing, making the company's in-store execution so important. Give me all the free chicken sandwiches I want, but if service is slow or poor or the restaurants are messy then I'll be less likely to go.
Chick-fil-A is a contrast to the current QSR strategy that involves broader menus and more complex operations. Chick-fil-A's unit volumes exceed $3 million. That's the highest average of any limited-service chain out there. It's higher than Chipotle, it's higher than Panera Bread and, yes, it's higher than McDonald's. Indeed, Chick-fil-A does those unit volumes with half the menu of your typical Golden Arches and it's not open Sundays or holidays.
Much of the reason for this success likely traces to the company's ownership model. Franchisees—a term we use loosely, in this instance—need only $5,000 to run their own Chick-fil-A, and they can't sell the store when they're done. But according to the company it gets 20,000 franchise inquiries a year. Maybe 75 or 80 of them become operators. For those of you scoring at home, that's a 0.4-percent chance of success.
In other words: it's about as easy to become a Chick-fil-A operator as it is to get a job at Google.
So the company gets super-strong operators who concentrate on a single store and live in their community. And the company has a limited menu, available in all dayparts, that make it relatively easy to operate. That improves their chances of success, so they can keep the chain's customers coming back after that big initial splash.