In a world of shrinking QSR location footprints, increasing labor costs, ghost kitchens stealing market share, and a shrinking labor pool, how can QSR chains succeed?
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 — 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 their 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, yet consistently, their locations outperform all other QSR’s on a national basis.
I have spent over 25 years in hospitality, working with many of the top players in the US in many ways. I co-founded Aloha POS, originally called Ibertech and now owned by NCR, and have sat with many senior C-level food service executive teams discussing with them their operating business systems and models and how they maximize their chains’ success.
When you deconstruct their operating success model, I have observed three separate effective drivers that help them excel:
- Chick-fil-A does not only do team member training but also focuses on employee coaching. They coach team members by position to meet and exceed their corporate standards of performance. 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.
- When driving corporate growth (franchise and non-franchise), it is important to focus on profits, not just revenue. 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.
- 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, they focus on community marketing, sponsoring baseball teams, food donations to good causes, and being a responsible citizen within a 5-mile radius of their store locations.
These three management models, all centralized around the theorem to get big and implement small, have propelled Chick-fil-A to an extraordinary success level 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.
Written by Paul DiModica, C.O.O./C.S.O. of TruOI. TruOI is a real-time coaching, managing, measuring, training, reporting, and documenting operational intelligence success platform that uses your existing technology.