(playful music)
- [Narrator] This is the Chick-fil-A chicken sandwich,
which according to multiple industry surveys
is America's favorite fast food.
Visit a Chick-fil-A anywhere in the United States
and you're likely to see a long line of customers,
patiently waiting to order
the restaurant's flagship menu item.
- There you guys go.
- Thank you so much. - My pleasure.
Y'all have a great rest of your day.
- Thank you. - My pleasure.
- [Narrator] In part thanks to its famous chicken,
today Chick-fil-A is the third largest US restaurant chain
by domestic sales.
- We're still seeing a tremendous growth in our business.
So far this year, we're up about 20%.
- [Narrator] So how did this private Atlanta-based
fast food chain become one
of the most popular restaurants in America?
This is "The Economics of Chick-fil-A."
(upbeat music)
Chick-fil-A has long had a unique approach to business
that the company credits with its success.
From the beginning, Chick-fil-A's business
was built on a recipe.
After testing hundreds of methods,
restaurateur Truett Cathy developed a faster way
to cook boneless chicken
using a pressure cooker and peanut oil.
- It's perfect and so we've kept that locked away in a vault
and we'll continue to use that same recipe.
- None of the employees have access to it,
so it is still shrouded in a lot of mystery.
There are recipe sites where you can try to recreate it
but they have never put it out officially.
- [Narrator] The original chicken sandwich
is the same today as in 1967.
A breaded breast of chicken,
two pickles, both placed on a buttered toasted bun.
♪ Hey, Chick-fil-A today ♪
♪ Chick-fil-A ♪
♪ The boneless breasted chicken we're famous for ♪
- [Heather] Chick-fil-A has long taken pride
for its commitment to selling high-quality product.
- [Narrator] In fact, Chick-fil-A's name
is a take on chicken filet
with a capital A at the end symbolizing top-quality.
While other fast food chains tend
to expand their menu offerings over time
to attract new customers,
Chick-fil-A's business model
has always been to maintain a small menu,
focused on chicken sandwiches.
- They like to say it's simple.
So they want to keep customers knowing
what's on that menu
to be able to easily decipher what they want.
- We think about the way that we serve guests.
That consistency is really important,
that we get hot sandwiches, and cold salads,
and just tasty products.
- [Narrator] Customers seem to agree.
Since its creation in 2015,
the American Customer Satisfaction Index
has been dominated by Chick-fil-A.
- Chick-fil-A often rates very high.
Even though the service in the drive-thru can be slower,
people are very happy with the quality
and the service they get in general.
- [Narrator] Today, many Chick-fil-A restaurants
use a practice known as upstream ordering
where an associate will take a customer's order
while they're still waiting in line.
- This started before the pandemic
but has really proved very important
to the pandemic when they closed their dining rooms,
which really meant the drive-thru
is the major channel of sales.
So if you go to a Chick-fil-A now,
in many locations, you will see workers out
in the drive-thru with tablets.
And so instead of speaking into a speaker box
and kind of mumbling your order
and it maybe getting screwed up,
you're telling this person directly next to your car
what you want.
- [Narrator] To ensure that quality
in every one of its location,
Chick-fil-A uses a different franchise model
than most other fast food chains.
Unlike most chains where the franchisee covers most
of the costs of opening the restaurant,
Chick-fil-A owns every one of its locations.
The company also selects the locations,
and builds the restaurants.
- We really think that that's a key differentiator
in the way that we operate.
We're not looking for a financial investor
or people that wanna buy a big market
and open a bunch of stores.
- [Narrator] Chick-fil-A states on their website,
"Franchising is not an opportunity
for passive financial investment,
working from the sidelines,
or adding to a portfolio of business ventures."
Franchisees are called operators,
and each operator is hand picked by Chick-fil-A
after a rigorous interview process.
- Chick-fil-A likes to say it's about like going
to Harvard MBA.
It can take anywhere from 12 months, 24 months.
So you really have to want to do this,
and be willing to go through the initial paperwork
but then extensive interviews.
- [Narrator] Out of the more than 8,000 applicants
Chick-fil-A receives annually,
the company only selects about 130 new operators a year.
That's an acceptance rate lower than Stanford.
- One of the skills that we really look for
is somebody that's really good at developing people.
A lot of the stores have over 100 employees.
They've gotta be really, really good
at pouring in and developing people
in teams and leadership teams.
- [Narrator] If selected, Chick-fil-A franchisees
needs only an initial investment of $10,000,
which covers the franchise fee
to become an operator.
That's much lower than the startup costs
for a McDonald's franchise,
which requires a $45,000 franchise fee,
as well as 1.3 to $2.3 million
of additional investment.
- If they have 10 or 15 locations,
it's hard to have that market presence
and to really know their team members
and the communities that we serve.
And we've got a lot of interest to become operators,
and feel like that model
is gonna be really important.
It's what's gotten us to where we are.
- [Narrator] Chick-fil-A credits this hands-on approach
with the success of its restaurants,
which on average, make far more off of each location
than their competition.
For years, Chick-fil-A's footprint
was mostly in the southeast,
but today, it can be found across the country.
- They have about 2,600 restaurants
throughout the country.
They're also located in Canada
and they're opening in Puerto Rico.
- We're opening about 100 stores a year right now
and we've got a lot of growth potential here
just domestically in United States
but we're also looking at international as well.
- [Narrator] Since 2007, Chick-fil-A's nearly doubled
its restaurant count to 2,598.
- Compared to a lot of other chains,
that's still slow.
Like a Chipotle is opening 200 restaurants a year.
- [Narrator] No matter which Chick-fil-A location
you eat at,
the company says its values are reflected
in its day-to-day operations.
- It is a very close culture.
They're also invested in its values,
which they do say are based on Judeo-Christian values,
which you don't have to be a Christian to work there
but they do take some of these basic values
of humility and generosity,
and if you wanna go to a prayer service while you're there,
you certainly can.
- [Narrator] From its inception,
founder Truett Cathy's Christian faith played a major role
in the company's business strategy.
It's why Chick-fil-As are never open on Sunday,
not just so workers can attend church
but also so they can rest in general.
- We feel like we make up for the sales
in the Monday through Saturday,
and that anticipation of I can't get Chick-fil-A today,
so I wanna make sure to go first thing Monday morning.
- [Narrator] It's also the reason the company
has never gone public.
- I don't think we'll ever,
actually, I know we'll never go public.
And there's not a real benefit for us to do that.
We've grown conservatively,
and so we don't need a lot of investors
or extra cash to go and to build new stores
or new businesses.
- [Narrator] Part of Cathy's values
are reflected in how employees are treated
and how they're expected to treat customers.
- Thank you. - My pleasure.
Y'all have a great day.
- [Narrator] Although you won't see it in restaurants
where the employees are masked up,
Chick-fil-A has long asked employees
to greet customers warmly with a smile.
- Even if it's just in a very small interaction,
you can share a lot by just the smile
the team member has with guests.
It's just a small little thing
that we can do that makes a difference.
- [Narrator] Occasionally, Chick-fil-A's values
have attracted scrutiny,
especially when the company's foundation donates
to conservative groups or causes.
- There's been some groups perceived as anti-gay
and this has attracted attention from progressive groups.
The company's foundation last year
has focused its charitable giving
on three different areas:
homelessness, hunger and education.
- I think the most important thing for us
being in the restaurant business
is that we serve everybody.
My grandfather, I love how he talked about it with politics.
He would say, "I'm not right wing or left wing,
I'm the whole chicken."
- When you go to headquarters in Atlanta,
there is this rock with a quote from Truett
that is displayed prominently
that says what Chick-fil-A's corporate purpose,
it says, "To Glorify God
by being a faithful steward of all that is entrusted to us.
To have a positive influence on all
who come in contact with Chick-fil-A."
I do think that reflects this very higher noble sense
of company self they have.
They believe they do more
than just serve chicken sandwiches.
- Thank you so much. - My pleasure.
Have a nice one. - Bye.
(lively music)