Georgia fast-food 'Chick-fil-A' has recipe for success

By Karyn Chenoweth Oct 5, 2007, 14:04 GMT

07/20/2007 -Conclusion of the 13th Annual Chick-fil-A Kyle Petty Charity Ride Across America - Seminole Hard Rock Hotel & Casino - Hollywood, Fl. © Jay Kravetz / PR Photos

One bite into a Chick-fil-A sandwich is usually all it takes to become a convert.

That's the hope of the company,who seeks loyal employees and operators who believe serving chicken is God's work.

In a Forbes feature, the Chick-fil-A company detailed their careful screening of new hires.

Forbes writes that Richard Yadkowski "keeps a paternal eye on employees squeezing lemons and cooking chicken." 

Yadkowski was like the seven teenagers who work in his restaurant, came to Chick-fil-A when he was living in a group foster home created by Chick-fil-A founder and chairman S. Truett Cathy.

"I tell the kids, 'This is not just selling sandwiches; it pays for your upbringing,'" says Yadkowski to Forbes, a hardworking, happily married Southern Baptist who plans to work with Chick-fil-A for life.

Chick-fil-A recruits and retain loyalists like Yadkowski, who is so devoted to the company and its founder that he named his son Samuel (Cathy's first name).

Forbes reports that the privately held chain--with $2.3 billion in systemwide sales last year from 1,300 franchised stores in the U.S.--is best known for chicken-breast sandwiches that inspire fans to camp out so they are first in line when a new restaurant opens.

It is unheard of in an industry defined by low wages, high turn-over and job dissatisfaction.

Chick-fil-A operators turnover is 5% a year. Among hourly workers turnover is 60%, compared with 107% for the industry.

"We tell applicants, 'If you don't intend to be here for life, you needn't apply,'" says Cathy, who opened his first restaurant in 1946.

Chick-fil-A's corporate mission, as stated on a plaque at company headquarters (and by Cathy), is to "glorify God." It is the only national fast-food chain that closes on Sunday so operators can go to church and spend time with their families; franchisees who don't go along with the rule risk having their contracts terminated.

Company meetings and retreats include prayers, and the company encourages franchisees to market their restaurants through church groups.

Forbes reports that "Howe Rice, a franchisee in Glen Allen, Va., hosts a Bible study group in one of his two Chick-fil-A restaurants every Tuesday. He offers a free breakfast to all who attend."

"You don't have to be a Christian to work at Chick-fil-A, but we ask you to base your business on biblical principles because they work," says Cathy.

Chick-fil-A is run by Cathy and his sons Dan T., chief operating officer, and Donald (a.k.a. Bubba), a senior vice president. They screen prospective operators for their loyalty, wholesome values and willingness to buy into Chick-fil-A's in-your-face Christian credo, espoused often by Cathy, an evangelical Southern Baptist who says "the Lord has never spoken to me, but I feel Chick-fil-A has been His gift."

The franchise fees for owning an operating a Chick-fil-A are low, compared to other fast-food franchises.

Chick-fil-A pays for the land, the construction and the equipment. It then rents everything to the franchisee for 15% of the restaurant's sales plus 50% of the pretax profit remaining, reports Forbes.

Operators, who are discouraged from running more than a few restaurants, take home $100,000 a year on average from a single outlet. A solo Bojangles' franchisee can expect to earn $330,000 (Ebitda) on sales of $1.7 million.

Forbes notes that the corporate owners asks people who apply for an operator license to disclose marital status, number of dependents and involvement in "community, civic, social, church and/or professional organizations."

There are no federal laws that prohibit companies from asking nosy questions about religion and marital status during interviews. Most companies don't because it can open them up to discrimination claims, says James Ryan, a spokesman for the Equal Employment Opportunity Commission. Chick-fil-A has more freedom to ask whatever it wants of franchisees because they are independent contractors and not necessarily subject to federal employment discrimination laws. (Employees, however, may sue under those laws.)

Forbes reports that Chick-fil-A, the corporate parent, has been sued at least 12 times since 1988 on charges of employment discrimination, according to records in U.S. District Courts.

Aziz Latif, a former Chick-fil-A restaurant manager in Houston, sued the company in 2002 after Latif, a Muslim, says he was fired a day after he didn't participate in a group prayer to Jesus Christ at a company training program in 2000.

The suit was settled on undisclosed terms.

"It is very difficult to get in, but once you're in, you're in for life," says Donald Elam, a Chick-fil-A franchisee in Superstition Springs, Ariz.: "I tell all my people, 'I'm not working for Chick-fil-A; I'm working for the Lord.'"