National Press Club

Chick-fil-A Founder Tells Down-Home Success Story

November 16, 2009 | By Andrew Kreig | andrew.kreig@gmail.com

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The 88-year-old founder of Chick-fil-A told a Nov. 13 Club luncheon audience about his company’s tale of continued growth through recent hard times enabled by low-debt, customer service, family ownership and religious faith.

Truett Cathy, who borrowed money in 1946 to start his first restaurant in suburban Atlanta, remains chairman of the privately held company that announced its 42nd straight year of record sales and an expected record of $3 billion in total revenue by year-end.

“I had the privilege of growing up in poverty,” he said. “The blessing is you have to work for a living.”

Chick-fil-A President and CEO Dan Cathy, the founder’s son, amplified on both the company’s success and why the story can help other companies and employees prosper.

Dan Cathy said the company is on track for a 9% increase in sales this year through its 1,475 U.S. restaurants in 38 states, and will continue its low-debt tradition by becoming completely debt-free within 36 months.

The company heavily relies on controlled growth, he said, along with hiring top personnel and providing exceptional service, especially by the standards of a fast-food restaurant. Dan Cathy described his practice of camping out overnight with customers at shopping center parking lots to get to know each other better and how the chain is introducing a new spicy chicken sandwich in June.

He describedd the “tremendous opportunities to treat our customers with honor” by such means as placing flowers on customer tables and teaching teen-age trainees to “pull out a chair for a lady” about to sit down.

Such traditions are easier to maintain, he said, by keeping the company committed to family ownership. Family ownership is expected to continue despite the vagaries of estate taxes, he said, after he and his sister recently signed legal documents pledging such control.

He said that Chick-fil-A avoids even the current bank loan rates of 2.5% interest because the company seeks self-funding in effect financed by satisfied customers, not outsiders.

Truett Cathy is credited with inventing the fast-food industry’s boneless chicken sandwich and chicken nuggets. He teaches Sunday school to 13-year-olds in recognition of his religious mentoring when he was that age, and made available to attendees signed copies of his five books, several focused on community and religious service.

In introducing the speakers, Club President Donna Leinwand said, “The chain’s growing revenues and expanding stores have come without the burden of layoffs. And without ending its long-questioned policy of closing its doors every Sunday.”

Dan Cathy quoted his father as saying Sunday-closings was “the most important business decision I ever made.”

Shying away from religious connotations on this question, they said the original decision was because they were so tired from working the other six days, but that ultimately a day of refreshment revitalized restaurant quality and enthusiasm overall.

The Cathys repeatedly argued the importance of religious faith in their company’s success while denying bias against any employees who might not share it. “Biblical principles work,” Dan Cathy said. “The challenge is to keep up with change, but pay attention to the things that never change.”

As for the future? Truett Cathy, who in 2006 landed on the Forbes list of the nation’s richest and now leads the company’s foundation arm, said, “Why would I want to retire from something I enjoy doing?”