Chick-fil-A traces its roots back to 1946 when founder Truett Cathy opened his first restaurant in Hapeville, GA. Since then, the company has grown to become the nation’s largest quick-service chicken restaurant chain with over 1,900 locations, generating sales of nearly $6 billion in 2014. A devout Southern Baptist, Cathy built the brand with the mission “To glorify God by being a faithful steward of all that is entrusted to us… [and] To have a positive influence on all who come in contact with Chick-fil-A.”
To achieve these lofty aims, Chick-fil-A pursues a business model of selling Cathy’s original chicken sandwiches (and other chicken dishes) in a clean, comfortable environment with superior customer service and community-oriented values. While the business model of providing quick-service chicken certainly is not unique, Chick-fil-A is able to pair it effectively with its corporate operating model and its distinctive franchise model in particular. It is the close alignment of these two factors that has led to the company’s wild success, helping its restaurants and franchisees to achieve the highest average sales in the industry of $3.2 million per restaurant for 2012, far outpacing second-place McDonald’s $2.6 million.
Chick-fil-A likes to tout its slogan, “We Didn’t Invent the Chicken, Just the Chicken Sandwich,” but chicken sandwiches today are not unique and can be purchased at any number of Chick-fil-A’s fast food competitors with comparable quality and little-to-no difference in price. In this fragmented market environment, Chick-fil-A seeks to differentiate on customer service. Employees greet customers with a warm welcome, offer fresh ground pepper to patrons dining in and carry heavy trays for moms looking after small children. Rather than “you’re welcome” or “glad to help,” employees are trained to end all transactions with “my pleasure,” something Cathy borrowed from the Ritz Carlton’s upscale client interaction practices. It is Chick-fil-A’s warm, friendly, comfortable service environment that has built brand loyalty among customers and turned the company into the most successful fast food restaurant in America.
What is perhaps most remarkable about the company is the highly effective way in which the business model described above aligns with its operating model and its unique franchise model, specifically. Unlike other fast food franchises, Chick-fil-A corporate selects the locations of each restaurant, bankrolls the entire cost of construction and retains ownership of the property and equipment. Selected franchisees, which Chick-fil-A calls “operators,” pay an upfront fee of $5,000 (as compared to the $1.9 million required to open a KFC), rent the property and equipment from corporate at a rate of 15% of sales, operate the franchise, and split the profits evenly with the parent company. The low upfront franchisee investment enables the company to attract like-minded people who are committed to executing on Cathy’s mission but might otherwise not be able to participate.
Most importantly, this model allows the company to maintain tight control over the quality of the product and customer service offering. Additionally, the franchise agreement requires that operators “be free of any other active business ventures and operate the Restaurant on a full-time, hands-on basis,” ensuring that each is solely dedicated to the performance of his/her location. This model is unique, unlike that of any other fast food chain, and is mutually beneficial for both parties—operators earn $190,000 a year on average, and while franchise turnover in the industry can run as high as 50-60%, turnover at Chick-fil-A has yet to surpass 3%, further bolstering the quality of the product and service offering over time.
Chick-fil-A is in the business of selling chicken, which in and of itself is unremarkable. However, by effectively aligning its franchise operating model with its corporate business model, Chick-fil-A has been able to incentivize franchise operators effectively, ensuring commitment and consistency of service, and driving value creation and long term success for all stakeholders.
 Chick-fil-A Corporate Website. www.chick-fil-a.com.
 “What Investors Need to Know About the Chick-fil-A Franchise Opportunity.” www.franchisechatter.com.
 “A Lesson in Customer Service from Chick-fil-A President Dan Cathy.” www.sas.com.
 “Chick-fil-A’s Recipe for Customer Service.” www.fastcompany.com.
 “How Chick-fil-A Hires: The Christian Way.” www.linkedin.com.