This newsletter comes out every other Thursday and hopefully provides you with thought-provoking content about the mundane, wacky, and weird. I will be writing until the 75th edition. If you know someone who may enjoy the newsletter, share it with them here.
This was the summer of Chick-fil-A for me. Jenny and I found that its chicken salad and waffle fries were the perfect antidote for our long driving days during our cross-country roadtrip. Despite the consistently long-lines and questionable charity stance, I found myself looking forward to my next meal there. Everywhere we went, Chick-fil-A was packed with families, couples, and teenage kids.
By USA sales, Chick-fil-A is ranked as the 3rd largest fast-food chain.
When adjusted for per store revenue, it is unparalleled. This is even more stunning because Chick-fil-A is famously closed on Sunday. Here is how its sales stack up against the golden arches for sales per restaurant.
Chick-fil-A was founded by a devout Christian named Truett Cathy. He opened the first Chick-fil-A in 1967 in his hometown of Atlanta, Georgia. He did a lot of things early on that separated them from the rest:
“We didn’t invent the chicken, just the chicken sandwich”. It’s true. They were the first to have a commercially successful chicken sandwich. Cathy tried over 100+ recipes and landed on a chicken, quick fried with peanut oil, two pickles and a buttered bun.
Shopping malls -Almost no malls in the southeast had food options when they started in 1967, and they stayed exclusively in shopping malls for the first 20 years. Cathy thought the employees would need some place to eat, and the rent was cheap.
Closed on Sunday. Every fast-food chain was opened 7 days a week to maximize revenue. Chick-fil-A decided to close on Sunday from the get-go, to give people a rest. While it is tied to Christianity, employees enjoy the day off regardless.
Closing on Sunday also drives up demand for the other days of the week and makes Chick-fil-A stand out even more, which in turn drives customer loyalty.
What’s kept them successful for 50+ years?
The simple menu leverages the paradox of choice, where more options paralyze people. It is counter-intuitive, but with fewer options, people buy more. This also saves a ton of money on kitchen prep, cutting better deals with suppliers and doubling down on the most popular items.
Speaking of popular, Dan Kathy the CEO of Chick-fil-A, says, their internal studies show that 30% of people drive away from Chick-fil-A because of the long line. Get this, opening up a new Chick-fil-A doesn’t really solve the problem. The demand still stays high 🤯
Which to put it lightly, means there are many potential Chick-fil-A customers waiting for a new location to open up. So, why doesn’t Chick-fil-A expand more aggressively?
The bottleneck is finding the right franchise operators to open the stores. Not for lack of applicants, but because their interview process is so intense. In 2018, Chick-fil-A accepted only 0.15% of people who applied to become franchise operators. That is 30x more selective than Harvard!
The Chick-fil-A secret sauce
The real genius of why Chick-fil-A is so successful is their employees and franchisee operators. Here’s how their operators (other chains call these owners) are different from other places:
Only a $10k upfront investment vs. $45k to open a McDonalds.
In most cases, operators aren’t allowed to own multiple locations. As the Chick-fil-A website states, “Franchising is not an opportunity for passive financial investment, working from the sidelines, or adding to a portfolio of business ventures.”
The hands-on approach of their operators extends to their hiring. They screen for friendliness and are allowed to be more picky because the workers are paid higher than other fast-food chains. Plus, their reputation for friendly service and loyal customers, self-selects better applicants. Try watching this one-minute video without smiling back at this drive-thru Chick-fil-A employee.
Chick-fil-A has also embraced slow expansion. They hardly ever take on debt and have not fallen into the trap of opening too many stores to chase dollars and then getting hit hard during a recession, 👀 Amazingly, they have had increased sales every single year for 50 years in a row.
Its future remains bright. Chick-fil-A has embraced technology. The most tech-savvy generation, Gen Z, has exclaimed Chick-fil-A is their favorite fast food.
Chick-fil-A has invested heavily in building a digital experience and online ordering with great success. Over 20% of total orders come from their mobile app. They have also adopted up-stream ordering, where employees armed with tablets take your order while you are in the drive-through line. Face-to-face communication improves the customer experience and helps with the accuracy of orders.
As the Chick-fil-A founder said, “In the end, remember that businesses don’t succeed or fail. People do.” That is core to the success of Chick-fil-A.
Our time
“In adolescence we spend the most time with our parents, siblings, and friends; as we enter adulthood we spend more time with our co-workers, partners, and children; and in our later years we spend an increasing amount of time alone.”
Podcast I’m Enjoying
My friend recommended Marshall Goldsmith, Lessons from a Life of Leadership interviewed on The Knowledge Project.
He hit on so many key lessons here a couple:
Staying in the moment - “One of the key points is live your own life. And by the way, when you live in the past, you’re living someone else’s life too.”
Aligning your aspirations, ambitions, and day-to day activities to create a successful life
Recent purchase I am enjoying
This cast iron scrubber is perfect for cleaning my beloved cast iron. Cast irons are finicky with dishwashing soap and sitting water. This scrubber easily scrapes off bits of food, but doesn’t damage the pan. For <$15 it’s well worth it, and here’s a video on how to properly clean your cast iron skillet.
Pic of the Week
My company, Figma celebrated its 10 year anniversary this past week. To celebrate, we were allowed visitors in our office for the first time. The celebrations were a blast, but one of my favorite parts, was Jenny sneaking into conference rooms to leave a friendly note or try her hand at the Figma logo.