When Church’s Chicken Engaged Its Franchisees, Traffic Grew For The First Time In 5 Years

Food & Drink

The chicken category has no doubt been the most exciting in all of fast food this year, complete with sandwich wars, social media punches, even a somewhat surprising entry into the plant-based space. 

It’s very clear that chicken is on a roll. In fact, chicken sales at quick-service and fast casual restaurants jumped 42.1% from 2011 to 2016, according to market research from Euromonitor.  There doesn’t seem to be an end to this trend. According to Technomic, 33% of consumers say they will try to eat more chicken over the next year. 

“At a time when growth is hard to come by, the limited-service chicken category is performing exceptionally well,” Charles Winship, senior research analyst at Technomic, said in a press release.  

In other words, the chicken category is a good place to be. And while Chick-fil-A dominated the narrative earlier this year when it surpassed Taco Bell and Subway for the No. 3 spot in the industry in sales, Popeyes has had its share of the spotlight with its sandwich madness, and KFC successfully injected itself into the plant-based movement to the delight of a sold-out crowd. 

Not in the headlines? Sixty-seven-year-old Church’s Chicken.

That may soon change, however, as the Atlanta-based chain with slightly more than 1,000 units just rolled out a national advertising campaign for the first time in 10 years. The campaign features the chain’s new tagline, “Bringin’ That Down Home Flavor” and is part of a larger, much-needed turnaround effort that began about three years ago.

According to CEO Joe Christina, the company had been losing traffic for five years, restaurants were closing and franchise profitability was declining. As a result, franchisor/franchisee relationships were strained. Perhaps because of this, rumors of a potential sale began swirling

“Now, we’ve got a lot of momentum,” he said. “That didn’t happen by accident.”

That momentum started in 2016, when the company put a three-year strategic plan into place. Priorities from the plan included more engagement with franchisees and employees, correcting traffic declines, launching the Church’s To Go platform and accelerating international growth. The company has checked off every item on this list including its top priority–re-engaging its franchise community. The company did this by launching an annual nationwide conversation tour with franchisees and establishing an Excellence Advisory Council.

“We’ve been working hard with the entire Church’s community to make sure they know this strategic plan wasn’t Joe’s plan or corporate’s plan, but it was our overall plan as an entire company to improve traffic and profitability,” Christina said. “When we all got on the same page, we had our first year of positive traffic in five years and net new unit growth.”

In an oversaturated and intensely competitive marketplace where every brand is battling over traffic, these accomplishments are a big deal right now. 

Christina acknowledges the competitive pressures of the industry haven’t made things easy, and added that Church’s has historically hindered its own efforts as well by presenting itself as a deep discounter. Accordingly, the company made another change in tweaking its menu pricing strategy. 

“We’re all stealing share from each other, but we made it even more difficult on ourselves. We were heavily discount driven,” he said. “We approached value as how inexpensive we could make our food. That is not a recipe for long-term success.” 

Church’s Bourbon Black Pepper Smokehouse Chicken, sold at the $5 price point, is a good example of how the brand has been able to find a better promotional balance. According to the company, the popular LTO has driven unprecedented sales and transaction growth

The resurrected marketing campaign also certainly helps. To support this initiative, franchisees have been asked to provide input on how to best pool their money to support more national media. 

“We’re not asking franchisees to incrementally spend on advertising. We have found a way to create a great partnership that allows them to reallocate funds so those funds work harder for us,” Christina said. “When you’re positive for 33 out of 35 quarters and the biggest change is national media, we know it works. Our franchisees want to build on that national media presence because they know it’s building awareness and improving traffic.” 

Church’s is also reimaging its restaurants to modernize the brand. The company will end this year with 50% of its domestic business in the new image and a goal of 100% in two years. Christina won’t disclose specifics, but says there are positive sales lifts at the updated restaurants. 

Notably, the company’s reimaging program is about much more than aesthetics. The new restaurants also include operational changes to keep up with added volumes from the Church’s To Go platform. Every restaurant has been equipped with a new “operational readiness plan” that includes training across the system, increased communications through a new intranet and a restaurant center employee assigned to every 10 restaurants to ensure operational efficiencies.

“We left no rock unturned. In all of my years in the industry (more than 30 years), I haven’t seen a better plan for operations than this one,” Christina said. “We knew we had to do this well because, between our drive-thru and takeout, 80% of our food leaves the restaurant. Convenience is changing for our guests and we had to change with it.”

Currently, just over 960 domestic locations offer delivery through the top four delivery platforms in Uber Eats, DoorDash, Postmates and Grubhub. Having multiple providers allows Church’s to keep a quick delivery pace and also scale into new markets. 

Christina said many Church’s franchisees are averaging $1,000 in orders a week from third-party delivery and have therefore added $40,000 to $50,000 to their topline that they’re investing back into their restaurants. 

“That’s why we’re seeing quicker reimaging, because of their willingness to reinvest. Right now, we’re seeing delivery at about 3% of sales and we hope to grow it to 6 to 8% of sales,” he said. 

 Church’s seems to be hitting on all cylinders at what seems to be the right time, and as it continues its momentum into 2020, the company fully expects to be a bigger part of the chicken conversation. Christina even hinted that it will throw its hat into the chicken sandwich ring, perhaps leveraging some of its international menus to create the right product. 

“When we do rollout out a sandwich, we’ll do it right. We’ll lean into our bold, Texas flavor,” he said. “We have restaurants all over the world and innovation across those markets will be a big part of how we continue our traffic trends.” 

That’s not to say it will be easy. Church’s may be on an upward swing in sales and traffic, but there are a lot of chicken contenders emerging and growing. Still, Christina admits he’s as optimistic as ever.

“We’re not sitting aside. Whatever the competition throws at us, we know we have products to answer,” he said. “Every restaurant company has something to work on. The most important thing for us is we are all finally talking the same language and it’s driving us to keep executing.” 

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