Chick-fil-A Heads to China

By Douglas A. McIntyre Published Mar 14, 7:30AM EDT

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Chick-fil-A Heads to China — © andymag / Flickr

Chick-fil-A wants to take its successful model and menu to international markets. It has over 2,000 stores in the United States. While the company is private, along with financial details of its operations, most restaurant industry experts believe it is extremely successful. To succeed, it must do well in Europe and Japan. It also needs to do extremely well in the fast-food capital of the world, China. (Here are the best new restaurants in America.)

Chick-fil-A CEO Andrew Cathy told the Wall Street Journal, “We feel like it’s time to continue to innovate and try and test how we will do in international markets so that we can learn.” He says he will write checks up to $1 billion to get there.

Why China? Yum Brands spun out Yum China into its own company. It has 13,000 stores in 1,800 cities. These include KFC, Taco Bell and Pizza Hut locations.

McDonald’s has 3,500 stores in China. That compares to 13,000 in the United States. China continues to grow rapidly, compared to flat store sales in America.
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Starbucks plans to open a huge number of stores in China. It already has more stores in Shanghai than in any other city. Last year, management said it would soon have more stores in China than in the United States.
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Chick-fil-A has a potential edge as it spreads overseas. Many consumers prefer it to other fast-food chains. It ranked first in the American Customer Satisfaction Index, well ahead of its rivals. McDonald’s was last.
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Chick-fil-A faces many of the same hurdles that companies have when they move overseas. Which cities are most likely to have receptive customers? What store layouts work? Does the menu need to be altered from the one in the United States? What is the best way to train staff? How does Chick-fil-A screen franchise owners?

Chick-fil-A has proven itself to be one of the world’s best-run and most adroit fast-food companies. That gives it more than a fighting chance as it moves into other markets.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.