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Lesson #5: Flexibility Is Fundamental to Success
After realizing the potential success of his novel chicken sandwich, Cathy thought about ways of expanding his business. Initially, however, he did not want to create a chain of restaurants. Instead, he opted to trademark the name, license sales, and provide licensees with the breaded product ready for cooking. He chose the name Chick-fil-A because he felt that the ‘A' symbolized a high quality product.
With that, in 1964, Cathy actually began promoting Chick-fil-A as an item to be added to other restaurants' menus. He rented a booth at the 1964 Southeastern Restaurant Trade Show and secured many interested offers. He began traveling around the country to promote the product and teach licensees how to cook and serve the chicken. Within four months, Cathy had signed agreements with 50 licensees, including the Houston Astrodome, which Cathy considered a big win.
But while Cathy was seeing success, he was also beginning to see signs of problems down the road. He had no quality control power over his licensees, and some of them were failing to live up to his standards. In the long run, he knew this would damage the Chick-fil-A image and reputation. He knew that despite his current success, he had to switch tracks, which is why he decided to form joint ventures with independent operators instead.
Cathy then began experimenting with the outlets. Should he create freestanding structures? He decided to rent a 384 square foot space in a Georgia mall, where his sister already ran a gift shop. It was a small space, so he had to be creative with layout, finally settling on placing the kitchen area in full view of customers. In the end, it cost Cathy $17,000, far less than a freestanding structure would have. And, with a steady flow of customers, Cathy's gamble had paid off.
By 1971, Cathy's strategy was well in place. With seven stores in operation, he held his first annual seminar for operators. But Cathy decided it was time to try something new again, which is when he began to consider the possibility of creating free-standing stores.
More costly than mall outlets, Cathy knew he needed a new tactic. This was when Cathy first introduced advertising, hiring a company to give Chick-fil-A a public face. The result? Large billboards showing cows that urged people to "Eat mor Chikin." It was a humorous slogan, and it worked. The first free-standing outlet opened in 1986 and was a hit.
Over the years, Cathy continued to experiment. In 1993, he opened his first drive-through-only Chick-fil-A outlet, and also introduced catering services for school and businesses. He even launched a mobile service for public events and university campuses.
Cathy's expansion plans might have varied over the years, but what remained constant was his management style, remaining flexible in the face of change.
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