Don't Have a Cow!

Cathy family at Chick-fil-A
From left to right: Bubba Cathy, Truett Cathy and Dan Cathy at a Chick-fil-A restaurant (Chick-fil-A)

Dan Cathy compares winning customers to the voting process. People "vote" with their dollars, he says. He campaigns hard for their business, attending nearly every store opening, often camping out with fans in the parking lot in a sleeping bag.

He also keeps a close eye on the competition. Don't be surprised if you catch Cathy in the drive-thru at Arby's, ordering a Market Fresh sandwich and a Jamocha shake. (Note: He still eats two to three Chick-fil-A sandwiches a week.)

Admittedly, Cathy's after more than dinner during these excursions. "I'm there as a customer, and I like to know how it feels," he explains. "If I get great service, I want to know how it makes me feel as a customer. If I get lousy service, I want to know how that feels as a customer."

Cathy recalls eating at one of his competitors (he wouldn't tell us the name) with Rhonda, his wife of 29 years. The tables were dirty and the service was slow. The result?

"Rhonda said, 'This is another restaurant that we will not be coming back to.' ... I'm starting to run low on inventory of restaurants that I can take my wife out to because several of them have been taken off the list," he says.

Cathy is an unusual executive—part Donald Trump, part P.T. Barnum and part Billy Graham.

"I'm a marketplace minister," he says without hesitation. "I get over 1,000 pulpits that are over 40-feet long that just happen to have cash registers on them."

Cathy is vocal about his faith, but he doesn't shove his beliefs down employees' throats. Cathy points out that a wide range of religious beliefs is represented among Chick-fil-A's ranks.

Kyle, who attends a nondenominational church, has witnessed firsthand Cathy's bold witness.

"If someone's uncomfortable with another individual being ... verbal about his faith, then I think they would be uncomfortable around Dan Cathy. But he doesn't intentionally make them [uncomfortable.]," Kyle says.

Kyle notes that Chick-fil-A's values-based approach helps to attract new restaurant operators: "Most religions have basic tenets of honesty and hard work, and a lot of values that Chick-fil-A holds close. They [operators] may not all believe in Jesus, but they believe in being good people and doing a good job, working hard. And we see that in operators of other faiths."

Dan Cathy likes to joke that it's easier to get a job at the CIA than the "C-F-A." It's not far from the truth.

Chick-fil-A's unique operator agreement allows franchisees to sublease one of their restaurants for a financial commitment of only $5,000. More than 10,000 apply annually to run a Chick-fil-A restaurant, but less than a 100 are selected. Cathy calls those who make the final cut his "1-percenters."

"While we have to grow, we don't want to grow so fast that we lose the ability to properly clone and replicate the philosophies of the business," Cathy says. "It's like going out into the yard and putting a lot of nitrogen out there. You can grow a lot of grass real quick, but it won't have the roots it needs to get through the dry spell."

So how fast does the company want to grow? "It's very simple," Cathy explains. "It's the number of chairs around my dining room table. I'm not going to open up a restaurant unless I've had an operator over to my house for dinner."

At those dinners, Cathy is a chef and a waiter. He grills ribs; he refills iced tea; he wins the respect of his team members.

The secret to great customer service, says Cathy, "is the retention of people. It's not technology, it's not having reader boards [in drive-thrus] that talk back to you and all that sort of stuff, it's having a good, consistent team."

Which brings us back to the way Chick-fil-A treats its people. "The way you treat people internally is what drives the customers' emotional response back to the business," Cathy says.

Cash Cows

When it comes to marketing its product, Chick-fil-A doesn't clown around. Their spokespersons are bovine ... and a divine hit with the public.

Created by Dallas-based The Richards Group, Chick-fil-A's "cow" campaign was first introduced in 1995 as a 3-D billboard concept depicting a black-and-white cow sitting atop the back of another cow painting the words "Eat Mor Chikin."

These cash cows have beefed up sales for Chick-fil-A. They are now the focal point of the company's in-store point-of-purchase materials, promotions, and radio and TV advertising. Clothing and merchandise sales—including cow toys and annual cow-themed calendars—have exceeded $32 million since July 1996.

But when it comes to growing the company, Dan Cathy is anything but cow-ardly. The chain is having its most aggressive expansion year ever, opening 90 new restaurants in 2004, including 73 free-standing units, two mall locations and 15 licensed restaurants.

Chick-fil-A is already a staple in the Southeastern United States; now Cathy's setting his sights on the West Coast. The chain anticipates opening up to 75 stores in California within the next five years.

Chick-fil-A operator Kyle says: "Dan operates on a different level than most of us. He's a big-picture thinker. He's definitely very well-read and has a great feel for our industry and where its headed, and how we can enhance our position in the marketplace."

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