What makes America’s most profitable fast-food franchise

When you think of big money fast-food chains, names like McDonald’s, KFC and Subway come to mind. Who has heard about Chick-fil-A?

With just over 1,900 stores operating countrywide and no international presence, Chick-fil-A doesn’t seem to be in the same league as McDonald’s (35,000 outlets worldwide) and Subway (34,000).

In fact, the chain’s annual revenue of $5.7 billion is barely one seventh that of the world’s most famous burger chain ($35.4 billion). But take those figures together and a more compelling fact becomes apparent to the aspiring franchisee:

Chick-fil-A is the most profitable fast-food franchise chain in the United States and the gap to number two (which just so happens to be McDonald’s) is a cool million dollars per store every year.

This is even more impressive when you consider the company’s religious flavor, which means that every Chick-fil-A store closes on Sundays. So they’re earning those incredible profits in six days while everyone else tries to catch up in seven. So what makes this Georgia-based, family-owned private company such an incredibly lucrative option for franchisees?

Our customer comes first

Chick-fil-A started officially in 1967 with a food court location in the Greenbrier Mall in Atlanta, although founder Truett Cathy actually invented the brand’s signature chicken sandwich three years earlier while running his first restaurant, The Dwarf House, in Hapeville, Georgia.

Years earlier, when Cathy was just a few years into running his second Dwarf House restaurant, a fire completely destroyed its premises. A regrettable lack of appropriate insurance left him with almost nothing. While most business owners would likely file for bankruptcy and lick their wounds, Cathy set up tents next to the restaurant’s burned-out shell, brought in a few portable grills and before long was serving breakfasts to long queues of hungry customers.

It took a full 20 years between the first Dwarf House serving its first coffee in 1947 and the first Chick-fil-A store opening its doors. As Chick-fil-A outlets multiplied Cathy never sacrificed his customer service-oriented ethos or other strongly-held values in favor of faster growth or higher profits.

Driven by a customer-first mentality the quick-service chain has grown steadily over the course of nearly half a century. It’s rare in the fast-food trade for staff members to serve customers who dine in, but at Chick-fil-A it’s always been the norm.

A staff member is always around to refill drinks, grab extra napkins and see if there’s anything else they can do to help. At the end of each order the clerk behind the counter will routinely say “It’s been a pleasure to serve you” with a sincere, warm smile. That simply doesn’t happen at McDonald’s.

Happy employees make for happy customers

The Chick-fil-A philosophy starts at corporate level and filters down to the newest entry-level employee. The company has won ‘Best Place to Work’ and similar awards numerous times, while their employee reviews consistently note that the company is sincere in its efforts to maintain a fun, positive work environment with a focus on both happy employees and happy customers. As a result, the staff turnover rate at Chick-fil-A is about one third of the industry average.

To maintain such high levels of employee and customer satisfaction, the company’s franchisee application process is intense. Although verifiable figures were not available, anecdotally, only 1% of applicants are approved to purchase franchises.

In pursuit of maintaining a high level of customer service the company also boasts an internal training program of such repute that it has been openly emulated by other restaurants, even including arch rival KFC.

“Our people are the cornerstone of all that we do at Chick-fil-A,” says Cathy. “As a chain, we believe that attracting great people helps create an unforgettable experience for our customers.

“Customer satisfaction is the payoff for spending the time to search for the best employees. Our restaurant team members have proven time and time again that going out of your way to make sure our customer has a pleasurable dining experience will build customer loyalty.”

Loyal is actually an understatement.

Every time a new Chick-fil-A store opens the first 100 customers through the doors win a meal every week for a year. In the days leading up to a grand opening, customers from near and far – in scenes not dissimilar to the launch of a new iPhone model – converge on the new store’s parking lot, even camping out overnight.

Sometimes they travel hundreds of miles to be part of the experience, despite the prize being restricted to those living within the store’s zip code; they come simply to be part of the fun. With games, music and entertainment, the atmosphere is like that of a festival.

As a litmus test of the loyalty the chain engenders, simply compare the prices on Chick-fil-A’s menu with that of any other comparable chain: they’re generally more expensive across the board.

But their customers don’t care.

Why? Because the customer thinks the service and food is worth paying a little extra for.

What other fast-food franchise has created such an impressive relationship between employees and customers? Perhaps all business owners and prospective franchisees can learn something from the venerable Chick-fil-A.

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