Founder of Chick-fil-A Explains the Best Business Decision He Ever Made


#1

download

In 2016, Chick-fil-A’s average sales per restaurant was $4.4 million while only being open 6-days per week. The competition was open 52 more days in 2016 and averaged Panera $2.7m, McDonald’s $2.5m, In-N-Out Burger $2.0m, Chipotle $1.9m, Wendy’s $1.57m, KFC $1 million, etc. Chick-fil-A doesn’t just beat its competition, it dominates them, all while not being open on one of the busiest QSR days of the week.

In this excerpt from How Did You Do It, Truett?, Truett Cathy (March 14, 1921 – September 8, 2014) explains the decision to stay closed on Sundays:


One decision, perhaps, has affected our reputation more than any other. I don’t remember much about the fourth Sunday in May 1946, except that I was tired. For weeks, we had worked alongside carpenters, plumbers, and electricians to get the Dwarf Grill ready to open. Finally, on Thursday, May 23rd, we opened the doors to customers, and we stayed open twenty-four hours a day. My brother Ben and I rotated twelve-hour shifts - and more. I lived in a rented room next door to the restaurant, and in those early days I only went home to sleep. Otherwise, I was in the restaurant. By midnight on Saturday I was exhausted. I can’t remember ever being more thankful for Sunday, a day to rest.

On that Sunday morning in 1946, it never occurred to me to open the restaurant. In fact, it would have been unusual for us to be open. Almost all businesses remained closed on Sundays in those days. We all recognized the need for a day of relaxation and to be with family, and many people spent at least part of the day worshiping the God who commanded His followers to set aside the Sabbath for rest. I took the time to go to church on Sunday morning and relax on Sunday afternoon and evening, and when I came back to work on Monday morning, I was refreshed and found it easier to greet our breakfast customers with a smile.

Twenty-one years later when we opened the first Chick-fil-A restaurant in Atlanta’s Greenbriar Shopping Center in 1967, the mall was still closing every Sunday. After just a few years, though, mall developers and retailers across the country began to see Sunday as a day of shopping instead of a day of rest. Mall managers gave their tenants a choice of whether to open on Sunday, and we chose to remain closed. It wasn’t long, though, before those same managers wrote a clause in their contract with retailers that they must remain open seven days a week. We refused to sign such a contract, and our decision kept us from opening restaurants in some attractive malls around the country. Luckily, by that time our success had made Chick-fil-A attractive to mall developers even for just six days a week.

In recent years, the question I’ve been asked more than any other is why we close on Sunday. When the malls asked us to open, it would have been easy to take advantage of that seventh day of the week and serve the millions of people across the country walking past our restaurants. Some have suggested that we lose a lot of money by closing on Sunday. After all, I’ve been told that 20 percent of all sales at other quick-serve chains are generated on Sunday.

I think that’s the wrong way of looking at it. Everybody needs a break – Operators, their team members, our corporate headquarters staff. I also believe that the store itself needs a break. Even the equipment needs a rest after working hard for six days. The only way to make sure we all get at least one day off every week is to close. Companies that are open seven days a week may try to rotate days off so that everybody gets one day off every week. But if the business is open, you’re going to be thinking about it, even if it’s your day off. That takes away from your relaxation.

Closing on Sunday also gives us an advantage when we’re hiring, because people like to know that they’ll be guaranteed a day off every week to rest, spend time with their family and friends, and worship if they choose. Other companies may promise a day off every week, but if the company is open every day, the employee’s day off might be on a Tuesday or a Thursday. Most people would rather be off on Sunday, when many of their friends and family members are also off.

Finally, we close on Sunday because we believe it is the right thing to do. America has changed dramatically since I started out in the restaurant business in 1946. But principles have not changed. I was teaching Sunday school to thirteen-year-old boys one week, and I asked:

“What would you think if you knew that my cash registers were jingling while I was teaching this lesson on the observance of the Lord’s Day?”

One boy answered, “I would think you are a hypocrite.”

That sizes it up pretty well.

I believe the record has proved us correct. Closing on Sunday turned out to be the best business decision I ever made. We generate more sales in our restaurants in six days than many other chains do in seven. So, I tell our customers, “You eat with us six days a week, and I’ll give you permission to eat somewhere else on Sundays.”

“Truett doesn’t see Chick-fil-A as a platform for his faith. He applies faith principles to the business." - Tim Tassopoulos, Senior Vice President, Operations, Chick-fil-A


If you enjoyed this article, you should become an Intelligent Fanatics member. As a member, you get our current and future Intelligent Fanatics books and case studies for free, as well as the ability to participate here on our community. Join Us.


#2

Truett passed away in 2014, and now his son Dan Cathy is Chairman and CEO. Here is some commentary from Dan Cathy on staying closed Sundays from 2010:

I just would share with you, we’re going to continue to be closed on Sunday. We’re going to continue to be a privately held business. My brother and sister have signed a covenant of agreement that we’re committed to keeping the main thing the main thing in our business…My challenge is to make sure that we don’t mess up what he (Truett) got started for us.”


#3

I have always thought that this was one of the boldest decisions of any successful company I have ever studied. I wouldn’t say it was bold at the time that they initially decided not to open (as Truett believed it was just ‘natural’ to be closed on Sundays), but over the past decade I think it’s incredibly bold that they have stayed true to their values and not given into the pressures of those suggesting they are missing out on another day of revenues and profits.

The amazing thing is if another highly successful company comes along and follows this model of closing on Sundays (maybe there is one already?) , it won’t be viewed by the public and investors as a key to that companies success, but rather it would be viewed as trying to emulate the successful model that Chick-Fil-A has put into place.


#4

Obviously there is a lot more to the Chick-fil-A success story than just being closed Sundays. We are going to get into these areas in some follow up posts, but…I do believe that most people, even if you aren’t a Christian per se, are attracted to principled leaders with virtue, and especially when the quality of their product offering lives up to their principles.