8 Success Lessons Entrepreneurs Can Learn From Chick-fil-A
Chick-fil-A is one of the largest family-owned businesses in the country, and also one of the most profitable restaurant chains.
However, the company came from humble beginnings. Founder Truett Cathy entered the restaurant business more than 70 years ago with just $10,600 (that's about $135,000 adujsted for inflation). The company now has more than 2,000 locations and annual revenue of more than $9 billion. The restaurant chain reports it has had a remarkable 50 consecutive years of sales growth.
How has this Georgia-based chain, famous for its fried chicken and friendly atmosphere, grown into fast-food giant? It seems inexplicable when you consider that its menu offerings are more expensive than other leading brands and that the restaurants are closed Sundays.
But when you take a deeper look into the company’s strategies and what makes them successful, you’ll realize there are important lessons every entrepreneur can learn from Chick-fil-A.
1. Start small, seek feedback and perfect your craft.
Truett Cathy started small and focused on quality from the get-go. In 1946, he and his brother, Ben, opened their first restaurant, the Dwarf Grill (later renamed the Dwarf House), a tiny 24-hour diner outside of Atlanta. It was here that Cathy tested variations of his chicken sandwiches, serving them up to customers and asking for feedback. He eventually settled on a recipe that seemed good enough to build an entire fast-food chain around. He dubbed his creation “Chick-fil-A,” with the “A” meaning Grade A and top quality.
After years of fine-tuning his recipe he opened the first Chick-fil-A in 1967. His recipe was simple: a seasoned, breaded chicken breast and two dill-pickle slices between two halves of a bun -- a formula that remains unchanged today.
Cathy understood the importance of perfecting his trade and establishing a niche. He listened carefully to his customers. He used his business savvy and high standards to set his business apart.
2. Be innovative and seize opportunity.
Chick-fil-A has focused on innovation at every step of its business journey. Cathy came up with the idea for his chicken sandwich in 1964, when a local poultry supplier who had produced too many chicken breasts asked if he could use them.
He saw an opportunity to create a unique alternative to the hamburger by creating a chicken sandwich, but it needed to be both delicious and quick to prepare. This motivated him to find an innovative cooking method by using a pressure-fryer that could cook the chicken breast in the same amount of time it took to make a fast-food hamburger.
Cathy was also an early pioneer of the “food court” when he chose to open his first Chick-fil-A inside Atlanta’s Greenbriar Mall. Soon Chick-fil-As were opening in malls across the country. By the mid-1980s he was expanding beyond malls, and began opening restaurants with drive-throughs in busy communities with hungry commuters.
Truett died in 2014 but the company remains focused on adapting to consumer trends and habits. The company’s Technology Innovation Center in Georgia Tech’s Technology Square focuses on technology that improves customer experience, such as new menu items.
3. Create an enjoyable customer experience.
Customers savor their chicken sandwiches, but where Chick-fil-A really shines is customer service. It leads the industry in customer satisfaction, scoring the highest among restaurant chains in both full- and limited-service categories. Customers rave about the restaurants’ quick, convenient service, friendly employees and cleanliness. The franchise realized early on that if customers had an enjoyable experience they would return again and again, to willingly spend a little more on the menu.
Every part of the operation is crafted around human interaction. For instance, when a customer says “Thank you,” employees respond with “My pleasure!” Employees deliver the food to your table with a smile, and they frequently circle the dining area, asking patrons if they need their beverages refilled. Small touches like this elevate the dining experience.
The company doesn't neglect drive-through customers and works to ensure they have a good experience. Employees are stationed outside during busy periods to take orders and payments, speeding up the process by giving customers more face-to-face time with a cheerful employee.
This all goes to show how being kind and gracious to your customers costs very little, but creates goodwill and customer loyalty.
4. Empower and support your employees.
Go to any Chick-fil-A restaurant and you will be greeted by friendly employees who go out of their way to serve customers with respect and warmth. Chick-fil-A says its employees are motivated to give such consistent service because it invests so much in training them. Managers are also tasked with helping employees advance their careers -- even if those careers aren’t in fast food.
The company also focuses on empowering employees and delegating decision-making authority to them. Chick-fil-A trusts the people doing the work, and encourages them to make decisions and try new things based on their observations. Employees receive fair compensation and are supported in advancing their education. The company offers scholarships and educational assistance opportunities to help team members continue their education.
If you empower your workforce, your employees will feel happy and satisfied, and will be motivated to work hard and serve customers to the best of their ability.
5. Create a culture that engages people.
Chick-fil-A has a number of marketing promotions that are wildly popular, in part because they usually involve free food giveaways. But its marketing strategies are unique because they create a memorable atmosphere that engages people. The company has created a culture that serves as a conduit for customer relationships.
Take, for instance, “Cow Appreciation Day,” when patrons who come dressed as cows get a free entree. The free food is the draw, but what people remember is the experience of dressing up and walking into a restaurant full of other people dressed as cows.
There’s also the “Cell Phone Coop” challenge, where families who place their cell phones in a small box on each table and leave them there for the meal receive free ice cream cones. The goal is to get people to spend the meal actually talking to each other. How many businesses do you know that are trying to promote family togetherness by giving away free stuff?
A remarkable company culture can’t be replicated with an app or a fancy ad campaign. It has to be created from within so that it radiates out.
6. Define your values and stick to them.
Family was central to Cathy’s life and his business philosophy. His Christian faith served as a guide for his business ethics and decisions throughout his career. Early on, Cathy began closing his 24-hour diner every Sunday to make sure he and his employees had time to spend with their families and for worship.
He continued the tradition when he opened Chick-fil-A, and you still won’t find any of these restaurants open on a Sunday. The policy is firmly ingrained in the company culture now, and has become a selling point when hiring new employees, regardless of their religious background. Standing firm in these values was important to Cathy and his family, who continue to run the company.
7. Focus on people and community building.
Cathy always said he wasn’t in the chicken business; he was in the people business. For him, it wasn’t just about revenue -- it was about encouraging and supporting others. One of Chick-fil-A’s guiding principles is to support the local community and be of service to those in need. Restaurants are encouraged to give back in various ways, such as donating to local events or providing food for shelters or soup kitchens.
In 1984, Cathy started a charitable organization that offers academic scholarships for team members and runs youth summer camps, foster homes and transitional homes for youth. The charity also gives to other organizations, though some of these efforts have met with controversy.
However, Chick-fil-A remains very popular, especially in the South, with many people saying the chain has a positive influence on their community.
8. It all comes down to the business model.
Chick-fil-A's ability to do all of the above is directly tied to the chain's unique business model. For starters, it accepts just 70 to 80 out of 20,000 applicants who apply per year to operate a franchise, making the company one of the most selective chains in the industry. Operators don't own or receive any equity in the business and can only open one location.
But it’s also less expensive to open a Chick-fil-A restaurant than almost any other chain -- with the company charging franchisees only $10,000 to do so. This means the company can be extremely choosy about who runs its restaurants, and can maintain strict control over product quality. The company can also shift strong-performing franchisees to bigger stores or give them more responsibility.
All of this has helped propel the fast-food chain’s revenue, with each location earning roughly $4.4 million in sales annually. By comparison, McDonald's generates about $2.5 million per restaurant, and KFC about $1.1 million per restaurant. As Truett Cathy said, “In the end, remember that businesses don’t succeed or fail. People do.” And that is why his company still succeeds.