Kevin and Stacy Brown knew they were onto something in 2008 when Stacy’s chicken salad reached peak demand in their hometown of Auburn, Ala., but their door-to-door orders wouldn’t cut it with the local health department. So, they opened a standalone location featuring drive-thru and takeout only and sold out on day one. They doubled their inventory for day two, but once again sold out.
“That’s when the brand was off and running,” as CEO Scott Deviney explained during the recent ICR Conference in Orlando.
They opened three more locations in the Auburn area and started franchising in 2012. By 2015, when Deviney joined the company, there were 32 locations, eight of which were company-owned. There are now about 250 locations in 18 states with average unit volumes of about $1.5 million and systemwide sales of about $350 million. Deviney expects those sales to jump to about $400 million for 2024.
This growth story is remarkable, to be sure. But according to Deviney, it’s “very, very early days” for Chicken Salad Chick’s opportunity, adding that there is “significant” white space and the potential to become a 2,000-unit brand. Should the company realize that goal, it would surpass legacy concepts like Applebee’s and IHOP and sit close to concepts like Panera, Waffle House, and Jack in the Box.
To get there, the company is expanding to New Mexico this year. It has also sold units in Iowa, Nebraska and Kansas, which will open sometime in the next 12 to 18 months. Entry is targeted next in Michigan, Minnesota, Wisconsin, West Virginia, Pennsylvania, and Maryland, which are currently open for sale. Franchised locations make up about 70% of the system and Deviney said sold units are a “nice mix of existing franchisees and new franchisees.”
Driving this interest is a growth story that extends beyond just unit development. The company has experienced same-store sales increases each year with the exception of 2020. Those current $1.5 million AUVs are $500,000 higher than they were in 2016, equating to a compound annual growth rate of 6%. Deviney makes it a point to note that the $1.5 million number comes despite being closed on Sundays and operating only for lunch and dinner dayparts, or about 60 hours total a week.
Throughout the past year, Chicken Salad Chick has made several changes to support its continued growth, including new menu innovations. In the fall, the company launched its first hot sandwich, called the Chick Melt, adding only a small toaster to the kitchen. The croissant sandwich now makes up about 8% of the menu mix and has laid the foundation for more hot innovations.
Also, chicken salad itself provides a strong base for different flavor profiles, Deviney said, and the company leverages that base for quarterly limited-time rollouts. Another differentiator is its “Quick Chick” menu, curated to-go items available in a refrigerated section by the front counter. Quick Chick items generate about 20 to 25% of the business.
“Chicken salad can be very portable, so this is great for guests who want to come in and just grab a lunch and go,” Deviney said.
Other channel mixes include 27% for dine-in, 20% for drive-thru, 31% for takeout, 8% for third-party delivery, and 6% for catering. Catering experienced year-over-year growth of 15% in 2023 and has the potential for even higher numbers as brand awareness picks up.
A newer story for Chicken Salad Chick is its dessert menu. The company has long sold cheesecake and pie on an LTO basis, and in Q4, it acquired Piece of Cake bakery to complement its sweet offerings.
“You might think what’s a chicken and mayo company doing buying a cake company, but we sell desserts. They represent a small percentage of sales, but when we thought about Piece of Cake, we thought about their bakery. They have more flavors and fit well with our brand, so we can take one, two, three flavors of cake and sell them through our restaurants,” Deviney said.
The cake slices are slightly bigger than the cheesecake and pie offerings and priced a little higher.
“So, franchisees make more money,” he said. “In the five stores we currently sell (cakes) in, it’s around a 3% product mix, which is pretty good for a slice of cake.”
That five-store availability will grow this year as the cakes are integrated into Chicken Salad Chick’s distribution centers.
Another initiative Deviney is bullish about is the chain’s loyalty program. First launched in 2014, the program will be a priority for the company this year, with a revamp that makes it more user-friendly, more personalized, and easier for franchisees to run promotions.
“We have a very loyal guest and, in some cases, fanatical, so this will be one of our major initiatives in 2024,” Deviney said.
Indeed, Chicken Salad Chick generates some of the highest customer satisfaction scores based on Merchant Centric data, especially for loyalty and referral.
For Deviney, all of this steady and consistent work – franchising development, menu innovation, loyalty upgrades – is generating significant optimism about the brand’s near-and-long-term potential.
“There are not many chicken salad concepts out there. We’re a category of one. Our food is scratch-made in-house every day. But it’s our culture that sets us apart a little bit. The newest member of our executive team has been here for four years,” Deviney said. “We have a good track record for same-store sales and unit growth, and we’ll continue that. We’re excited about 2024.”
Contact Alicia Kelso at [email protected]