Chick-fil-A Walks Away From $1 Billion a Year on Purpose

Picture the single-busiest [music] day in fast food, Sunday. Now, picture the most successful chicken chain in America closing the doors on that day every single week [music] on purpose. Chick-fil-A is closed every Sunday, its biggest sales day potentially, [music] and has been doing this ever since the very first store. It runs one of the smallest menus in fast food, and it refuses to sell your franchise [music] the normal way. To run one, you pay about $10,000, not millions, only 10,000. And yet, it earns one of the highest [music] average sales per restaurant of any fast food chains in America. Not McDonald's, not Starbucks, it's a chicken [music] place that's dark 52 days a year. And friends, if you run a restaurant, this is a counterintuitive move that you'd be scared [music] to make because everything in your body says open more, sell more, say yes [music] to more. So, let's dive into the playbook as to how this restaurant chain has gone to such popularity by closing one day out of the week. 1946 in Georgia, a man named [music] Truett opens up a tiny 24-hour diner called the Dwarf Grill. Ten counter [music] stools, a few booths, that's the entire business. But Truett does something almost no restaurant owner does. From the very first [music] week, he closes on Sunday, locks the door on a diner that otherwise runs around the clock six days a week. Now, part of this is because of [music] his faith. Now, the other part is because he's worked brutal hours his [music] entire life. And he wants that his people, himself, to have one day guaranteed to rest, one day with family, no exceptions. [music] Now, years later, Truett cracks a problem that nobody had solved, how to serve chicken as fast as a burger. [music] He pressure cooks a boneless chicken breast, drops it on a buttered bun with two pickles, [music] and basically invents the fast food chicken sandwich. So, in 1967, he actually opens [music] the first restaurant called Chick-fil-A in Atlanta. And he carries that Sunday rule with him into the malls, into the suburbs, into thousands [music] of locations. He never drops it, not once. But that decision, the one that actually looks and feels [music] wholesome on the sign on the window, was about to cost him more money than almost any decision in fast food history. So, how do you get the opportunity to run [music] one of these franchises? Here's where it actually gets strange. For most franchises, you buy [music] your way in. McDonald's, Subway, bring 1 to 2 million dollars, and if that check clears, you're basically in. [music] Chick-fil-A does the exact opposite. To become an operator, you pay about $10,000. Chick-fil-A [music] owns the building, the equipment, and the land. Everything. You don't buy the business, you get selected to run one. And the selection process is brutal. They reportedly accept well under 1% of applicants. And in some years, it's actually harder to become a Chick-fil-A operator than to get into Harvard. [music] Out of tens of thousands who actually apply, only a hundred somewhat get the nod. Now, here's the catch that changes everything. >> [music] >> You can only run one operating franchise. Not 50, not an entire [music] region, we're talking about one store that you're expected to stand inside [music] of every single day. Most chains want operators who scale fast and to grab 10 locations. Chick-fil-A, on the opposite, wants [music] one obsessed owner in that one dining room. Now, pull that back to your only shop for a second, [music] friends, because Chick-fil-A decided it would rather grow slower with the right person in every single store than to grow fast with absentee owners [music] chasing for revenue. They said no to easy money over and over again on purpose. But, saying no has a price, and theirs was [music] about to get enormous. And here's the part that nobody saw coming, because that little Sunday rule, the wholesome one on the window, quietly [music] becomes one of the most expensive decision in the history of American fast food. Real quick, friends, if you're finding any value in this, make sure you subscribe [music] along the journey, and drop me in the comments section below. What's that one rule in your business that you would never break, even [music] if it costs you money? Make sure you guys leave a comment so then way I know what to break down next. Now, [music] here is what that closed door actually cost. Now, let's do some quick [music] math. Chick-fil-A stores are amongst one of the highest grossing in all of fast food. So, closing every Sunday, the [music] single busiest potential sales day of the week, means walking away from a full seventh [music] of the year. Analysts have widely estimated that staying closed on Sunday actually cost Chick-fil-A more than a billion [music] dollars in sales every single year. A billion dollars left on the table on purpose forever. And the pressure to break it is very real. Imagine you're the operator. Your mall is packed on Sundays. The food court [music] next to you is printing money and your lights are off. Every competitor, every landlord, every spreadsheet [music] is screaming the same word at you. Open! But, here's what most [music] people don't know. Truett almost didn't make it at all. In his early years, this wasn't [music] a billion-dollar empire. It was one man deep in debt. Two of his early restaurants [music] were destroyed. One of them by fire. And around that same stretch, he got hit with serious health problems that went through [music] major surgery. He lost his business. He's lost his health for a while. And he owed money that he was unsure that he [music] could pay back. And in that hole, broke, sick, scared, the one lever that would have helped [music] most was staring right at him. To open on Sundays. Add a seventh day of sales. >> [music] >> Nobody on Earth would have blamed him. Yet, he never did. Not when he was broke, not when he was rich. That's the whole story, friends. [music] The temptation to trade your own discipline for volume at the exact moment that volume would [music] have saved you. Yet, he refused. So, why did this discipline win? Because every single no was quietly building something else. Closing Sundays didn't [music] just cost sales. It actually brought rest, loyal staff. [music] In an industry where turnover is a nightmare, Chick-fil-A USA hands its people a guaranteed [music] day off every single week. So, people stay, retention goes up, and people [music] who stay get good and great at their job. And that's the reason why year after year Chick-fil-A [music] gets ranked number one in customer satisfaction in American fast food. [music] The famous my pleasure, the order that's actually correct. That's not a slogan. That's what rested [music] long-tenured employees produce. The tiny menu does the same thing. [music] Fewer items means the kitchen does few things perfectly and moves people through the line faster than almost >> [music] >> everyone else. The constraint actually became the throughput. And the scoreboard is clear. With only around 3,000 locations, [music] a fraction of McDonald's, Chick-fil-A is the third largest restaurant chain in America by sales. Per store, it reportedly earns more than double what a typical McDonald's [music] does, widely cited north of $6 million a year per restaurant working only 6 days [music] a week. They open less, sell fewer things, and grow slower than anyone else. And yet [music] they out-earn almost all of them per door. The constraint was never the tax, the constraint [music] was the moat. So, what does this actually save you from? Three things. Number one, the constraint held long enough actually becomes [music] your brand. Chick-fil-A's closed door says more about who they are than any ever advertising or PR could ever do. At 720 Sweets, [music] our strongest signal was collaborations, the stuff that actually works and stuff actually keeps us >> [music] >> relevant. That is something that we consistently stay on top of every single quarter. And that is something that our loyal customers are actually coming back over and [music] over again for. Number two, saying no to volume can actually become the moat. Everybody around you will tell [music] you to add hours, add items, add locations, but every single yes actually dilutes something that you don't realize. Chick-fil-A [music] grew slower on purpose and won anyway. So, you must guard, you know. And number three, the most [music] important of them all, take care of your people and service becomes the product. I learned this one the hard way, friends, [music] because the season that we burnt our staff out, the guests felt it and the numbers [music] showed. Rested people are the ones that's going to treat your customers well and that becomes [music] your product. A day off isn't a cost, it's an investment that walks back through the door Monday sharper than [music] anyone else in your industry. Friends, take this as a reference, not as a rule book, but before you say yes to more, ask what that [music] yes is quietly costing you. So, there it is, friends, Chick-fil-A closes on the busiest day of [music] the week, refuses to sell franchise the easy way, and keeps a tiny menu. And yet, [music] still out-earns every single fast-food chain in America per store. And because of the fact that they have constraint, that became their moat. Open less, say [music] no more, and take care of your people. And there it is, friends. If you guys find any value in this, make sure you guys smash that like button. It shows me this is the type of content [music] that you enjoy. So, then that way we make more of this for you. Otherwise, we'll see you in the next one.