Chick-fil-A plots international expansion

Atlanta-based quick-service giant Chick-fil-A is trying international expansion — again. But this time it’s not one-offs; it encompasses a $1 billion plan for stores across Europe and Asia.

CEO Andrew Cathy spoke with the Wall Street Journal earlier this week and said that Chick-fil-A has plenty of room to grow in the U.S., but that an international presence is necessary as the family-owned business charts its future.

“We feel like it’s time to continue to innovate and try [to] test how we will do in international markets so that we can learn,” Cathy said.

The company said it plans to open restaurants in Europe and Asia by 2026, with locations in five international markets by 2030.

Chick-fil-A’s last attempt to enter the European market — in London in 2019 — ended when gay rights activists continually protested the location. An earlier attempt at South Africa from 1996 to 2001 failed because the brand failed to register brand awareness among its customers.

There are, however, eight successful Chick-fil-A stores in Canada and three in Puerto Rico.

Chick-fil-A is wildly popular in the U.S., with higher AUVs than most other quick-service restaurants while only open six days a week.

According to Cathy — the third Cathy to run the company — Chick-fil-A is “planning to stick with its model in which franchisees run just one restaurant, working closely with the company and splitting profit with the chain after paying fees.”

Anita Costello, Chick-fil-A’s executive vice president for international, told the Wall Street Journal that the chain seeks to serve all customers in its markets, and that it takes seriously concerns raised about the company.

Chick-fil-A executives told the Wall Street Journal that they expect their global restaurants to perform similarly to their roughly 2,700 U.S. locations.

As for where the restaurants will be, Cathy told the Wall Street Journal that they are looking for “countries in Asia and Europe with stable economies, dense populations and a demand for chicken,” though they need to figure out a way to replicate their supply chain abroad.

Chick-fil-A isn’t the only brand looking toward expansion in Asia. Papa Johns made a big splash into the market back in 2022 with its biggest franchise deal ever in China. TGI Fridays signed 75 franchise agreements in 2022 to open units in South and Southeast Asia. And Brazilian steakhouse Fogo de Chão announced it would be entering the Asian market in 2022 as well.

That’s in addition to Chick-fil-A competitors like KFC, Popeyes, and McDonald’s, which all have an international presence. McDonald’s expanded its Asian presence in 2016, growing to nearly 6,000 restaurants throughout the continent.

Chick-fil-A’s newest menu innovation may see success in Europe and Asia.

Often, innovations that aren’t popular in the U.S. become popular overseas.

Take, for example, plant-based meat. KFC and McDonald’s have both tested plant-based options in the U.S. with middling results. However, overseas that result has shown to be much better — even positive. This seems like a good sign for the new Chick-fil-A cauliflower sandwich, which hasn’t posted any results in the U.S. yet but spent four years in development.

Source: NRN

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