McDonald’s might never imagine before that it would compete with Chick-fil-A. However, a survey by Restaurant Business showed that Chick-fil-A would be McDonald’s biggest competitor. It was also confirmed by the publications in several reports. They included Top 500 Chain Restaurant Report by Technomic and Kalinowski Equity Research.
The Top 500 Chain Restaurant Report even predicted that Chick-fil-A’s sales would exceed those of Burger King, Wendy’s and Taco Bell. If so, it will rank the third after McDonald’s and Starbucks as the largest restaurant chains. In other words, it will be the biggest threat for McDonald’s as they operate in the same industry.
What Makes Chick-fil-A McDonald’s Biggest Competitor
The reasons behind Chick-fil-A’s fast growth in sales are certainly interesting. Actually, Kalinowski Equity Research had long warned McDonald’s and investors about the threats. The restaurant chain had successfully made leapfrog onto the medal podium. What actually did Chick-fil-A do to position itself as McDonald’s biggest competitor? Here are some reasons:
Despite having smaller footprint, Chick-fil-A gains success by avoiding market saturation. A number of businesses had to close their chain stores because of inability to survive the ever-tightening competition. In such a market, cannibalization is very common. Subway chain store was unable to survive, thus closing more than 900 of its units in 2017.
So, what about Chick-fil-A? The restaurant chain applied a different strategy to deal with the competition. Its stores are fewer than half of those pf Wendy’s or Burger King. It avoids market saturation by being very selective in applying franchise applications.
CNBC reported that the restaurant chain actually received more than 60.000 franchise applications a year. It approved only about 1% of them. In addition, a partner (operator company) can only open one restaurant. This allows the operators to focus on their own location. Experts note that this is one of the main keys to its success.
Focus on Employees’ Wellness
Chick-fil-A holds on the philosophy that happy employees mean happy customers. When the employees do their job with heart, the customers will be satisfied with the services. Therefore, the restaurant chain attempts to provide its employees with time for their family. It is closed on Sundays. Therefore, the employees can carry their personal life without being disturbed by any jobs.
In addition, the company’s operators pay their employees rationally, if not, above the minimum wage. The restaurant chain is even known as one of the largest companies that offer woman-friendly compensation and culture. Combination of happy feeling and adequate payoff certainly contributes to its excellent customer services.
Focus on Efficiency and Accuracy
The company keeps innovating in the way it serves the customers. Surveys showed that Chick-fil-A ranked the 11st in the list of the fastest-serving restaurants in its class, with an accuracy of 93.4%. The IT team continuously tests the customer service designs, including full-scale drive-thru services, and make necessary corrections.
While other companies are struggling to press the profit margin, Chick-fil-A did it in another way. For the company, value is relative. It focused on providing the customers with the ultimate experience by applying technology and by innovating. So, it is very likely that Chick-fil-A may become McDonald’s biggest competitor, right?