Bill Gates may have started Microsoft out of his garage but Stacy Brown nearly got arrested when she launched her business, Chicken Salad Chick, out of her kitchen in Alabama in 2008.
Based on her scrumptious chicken salad recipes, Brown started selling it in teachers’ lounge and hair salons when the business started picking up steam. When the local health department heard about it, they visited her kitchen and told her the business couldn’t be run out of her home. But she found a way to comply with the law and her chicken salad specials found a growing audience.
The private equity firm Eagle Merchant Partners acquired a majority stake in the restaurant chain in 2015 and installed Scott Deviney as CEO. Brown remains on the board and is involved in the restaurant’s charitable efforts.
By 2019, Chicken Salad Chick has expanded to 114 restaurants. Of that number, 37 are company-owned and 76 are franchised. It opened 28 new restaurants in 2018, a healthy pace. And in 2019, it’s looking to add 45 locations, which would bring it to over 150 locations by the end of 2019.
Most of its locations are in the Southeast, Midwest and Texas, covering 13 states.
Its most popular item, The Chick, includes a scoop of chicken salad and the choice of another scoop, which could be a side salad, cup of soup or mac n’ cheese. The top selling chicken salads are: the Classic Carol, Fancy Nancy, which consists of apple, grapes and pecans and Sassy Scotty, with bacon, cheddar cheese and ranch dressing.
The average dinner check is about $14.60 a person.
Here’s what CEO Scott Deviney who is based in Auburn, Alabama, said about Chicken Salad Chick’s growth:
In Technomic’s ranking of the top 500 U.S. restaurant chains, Chicken Salad Chick’s revenue spiked 43% in 2018. What were the major factors in that rise?
Deviney: It came from three different things: 1) We opened 26 restaurants in 2018, 2) We grew same store sales 3.6%, 3) All the new restaurants had average unit sales volume that was 20% higher than the chain’s average.
Chicken Salad Chick’s menu of classic chicken salads sounds like comfort food. How do you see it?
Deviney: I think it is comfort food, Southern-style comfort food. There are different types of chicken salads depending on where you go. Our chicken salad includes shredded chicken mixed together.
Who’s the target audience?
Deviney: About 70% of our customer base is female. Our primary customer is female, roughly between the ages of 30 and 60, and most have two kids at home under the age of 14. Our restaurant’s decor and ambiance lends itself to them. It’s warm and inviting. Men still come in. but we skew heavily female.
It sounds more like a lunch place than dinner place. True or not?
Deviney: We do about 60% to 65% of our business at lunch. Our restaurants are open from 10 a.m. until 8 p.m.
Once private equity company Eagle Merchant Partners got involved in 2015, how did it step up expansion?
Deviney: Stacy and Kevin Brown started looking for an equity partner. I met them when I was selling my Wendy’s franchise. I put the deal together with Eagle Merchant Partners. When I got here on May 1, 2015, we needed to build a strong foundation to accelerate growth. We started by hiring the right people including a head of real-estate, marketing, technology and a CFO. We already had a head of operations. And then we began building out the company store model and working closely with franchisees to help them expand.
When you were named CEO in 2015, how did you want to change its culture?
Deviney: I wasn’t hired to change the culture, but it was more to continue cultivating the culture that was already in place. They had a servant heart, which means taking care of our guests, our team and franchise owners. We defined that into a purpose of spreading joy, enriching lives and serving others.
Why decide to franchise?
Deviney: In 2012, Kevin and Stacy had been approached by their best customers who wanted to become franchisees. I think a franchise system if done well, works. We want to keep it about 80% franchisees and 20% company-owned.
You’re only in 13 states. Will you be branching out?
Deviney: We will branch out, but we’re doing concentric circle growth. If we’re in 13 states, we draw a line to the next set of states and that’s where we’ll be. We won’t jump over the next state.
On what basis do you choose locations?
Deviney: Generally speaking, we target 50,000 to 60,000 people in a trade area with $50,000 average household incomes. We use a real estate analytics team, which helps with site selection.
How do you ensure that you recruit and promote managers during your fast expansion?
Deviney: The great quote I like is, If you want to go fast, you go alone. If you want to go far, go together. We have great franchise owners and a great support team in Auburn. We could grow much faster than we are, but we’re methodical in how we grow.
Opening up 45 new restaurants in a year is a rather speedy growth rate. What’s the trap?
Deviney: We have a healthy support staff in training, development and marketing. I like to say that’s all part of the soup. If you miss an ingredient or put in the wrong ingredients, it doesn’t taste the same. You have to stick to the recipe. About 50 a year is the right number in the foreseeable future.
How many of your new restaurants will be company-owned?
Deviney: Of the 45 restaurants we’re opening this year, we’re going to open 13 company stores, 18 restaurants from existing franchise owners, and 14 from new franchise owners. We consider that a healthy split. We’ll finish this year at 150, the next year at 200, and 250 the following year.
Any talk of going public?
Deviney: We’ve discussed it. That depends on our size and growth prospects, longer than two years in the future, and what capital requirements would be needed.
Describe your three key to future success.
Deviney: 1) Continue to find people who are purpose-driven and match our purpose, 2) Ability to find the best real estate, 3) Continue to grow brand awareness.
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