Third, Chick-Fil-A is highly committed to customer service (6). Video 1 shows an operator and her commitment to the organization. This is important because these are the types of operators who can obtain and sustain high levels of customer service – a critical piece of the business model. It looks for those committed to its mission and who will be actively involved in the day-to-day store management (5). This kind of selectivity allows Chick-Fil-A to differentiate between franchisees not by a minimum amount of capital, but by quality of character and fit within the organization. Rather than requiring franchisees to provide significant capital, Chick-Fil-A requires potential franchisees to provide $10,000 up front (versus the hundreds of thousands or millions typically required) and to go through a selective screening process (4). Chick-Fil-A reported that it receives approximately 20,000 applications per year while only selecting 75-80 new franchise operators (.4% acceptance rate) (5).
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Unlike most fast-food franchises that typically allow franchisees to own their stores with up-front capital, Chick-Fil-A owns all of its operating stores. Second, Chick-Fil-A has employed a unique franchise model to allow for controlled growth that aligns with the company’s goals. Original Chicken Sandwich Grilled Chicken Sandwich Clearly, the new product operations seem tightly aligned with the strategy to produce a quality, differentiated product. The company spent $50 million dollars and took 11 years to develop the recipe and cooking method for the new grilled chicken sandwich (3). While Chick-Fil-A holds the exact product development processes secret, we can get a sense of how important this operation is to Chick-Fil-A by observing allocated resources.
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This emphasis on creating a quality product began with its founder, who took years developing the perfect recipe for the original chicken sandwich (1). Operationally, Chick-Fil-A has aligned with this strategy by implementing a very thorough product development program (3).
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These products can command higher prices. Specifically, I found four main areas of its business or operating models that integrate well together: superior product, unique franchise model, execution of customer service, and focus on brand building.įirst, the company aims to create both differentiated and quality products. I think the company has been very successful thus far because of the alignment between its business and operating models.
Chick fil a video behind everyone has a story series#
Pathways to Just Digital Future Watch this tech inequality series featuring scholars, practitioners, & activists Success Story: Business Model and Operating Model Working Together Its implied business model is to provide high-quality chicken products with superior customer service to command premium prices in the fast-food industry. These impressive numbers lead many to wonder how Chick-Fil-A has achieved this, especially considering its company-wide policy to close on Sundays (1). This is the highest sales per store in the fast-food industry - greater than traditional powerhouses such as McDonald’s ($2.5 million) and Wendy’s ($1.6 million), but also greater than popular newcomers such as Chipotle ($2.5 million) and Panera Bread ($2.5 million) (2). In 2014, the chain collectively received $5.8 billion dollars in sales, which is an average of $3.1 million per store (2). From one restaurant originally named “Dwarf Grill” in Hapeville, Georgia, Truett Cathy invented a recipe for a chicken sandwich in 1964 and with that, Chick-Fil-A was born. Today, there are more than 1,900 Chick-Fil-A restaurants in 42 states (1).