Transcript Document
CHICKEN TEAM
Kristina M. Kasic
Patrick Johnson
Bernard Kanjoma
Erik Larson
Rob Killius
Raghad Khamou
Dragan Kosanovic
Agenda
Overview – Kristina Kasic
Situation Analysis – Raghad Khamou / Dragan
Kosanovic
Marketing Strategy – Rob Killius
Marketing Mix – Bernard Kanjoma
Financials – Erik Larson
Controls – Patrick Johnson
Overview
Company Overview
Founded in 1946 by S. Cathy Truett
Privately held company
Expands through franchising
Currently operates:
1700 + locations
39 states, including 1 in Michigan
Product Mix
Breakfast
Chicken biscuits
Chicken, egg and cheese bagel
Chicken breakfast burrito
Lunch / Dinner
Chicken sandwich
Chargrilled chicken sandwich
Chicken strips
Product Mix (cont.)
Sides
Waffle potato fries
Fruit cup
Breast of chicken soup
Salads and Wraps
Grilled chicken wrap
Asian salad
Grilled market salad
Healthy Alternative
Most entrees under 500 calories
Lean frying oils
Wheat buns grilled sandwiches
Light dressings
Franchise Layout Options
Company offers various options
Express
Stand-alone
Drive through only
Available in unique locations:
High traffic business buildings
College campuses
Hospitals
Proposal
Open 10 Chick-fil-A locations in Southeast
Michigan over 5 years
Year 1 – University of Michigan and Birch Run
Year 2 – Michigan State and Genesys Hospital (Grand
Blanc)
Year 3 – Detroit Metro Airport and Detroit Medical
Center
Year 4 – Ikea (Canton) and Lakeside Mall (Sterling
Heights)
Year 5 – Cabela’s (Dundee) and Great Lakes Crossing
(Auburn Hills)
Situational Analysis
Chick Competitors
Indirect Competition
National Coney Island
Direct Competition
McDonald’s
Possible Threats
Local restaurants
Subway
Burger King
Pizza Specialties
Jimmy John’s
Wendy’s
Local Grocery Stores
Sonic
Chipotle
Denny’s
Qdoba
White Castle
Baja Fresh
Tim Horton’s
Kentucky Fried Chicken
(KFC)
Taco-Bell
Popeye’s
Competitor Graph
Market Growth
Market Growth
Macro Environment
Trends and situations impact the success
Christian beliefs integrated in business
Competitive fast food environment
Changes in demographics
SWOT
Strengths
Industry recognition
Steady revenue growth
Over 1700 locations in
39 states
Healthy alternative to
beef and other meats
Established online
presence
Strong brand
Weaknesses
Fewer locations in
Michigan than
competitors
Weak presence in
Michigan
Closed on Sundays
SWOT (cont.)
Opportunities
Expansion of menu
offerings
Further expansion of
locations throughout
Michigan
Leadership Scholarship
Programs
Threats
Competitors with similar
menu offerings
Bird related diseases
Rising costs of raw
materials
Marketing Strategy
Value Proposition
Healthy alternative to beef and other meats
Treat every customer with utmost respect
Offer a good value
Financial Objectives
Financial Objectives
First year sales
In-line / mall – $1.1M
Stand-alone – $2.1M
Gross margin of 35%
Marketing Objectives
Maintain a gross margin of at least 35%
Generate a sales average of $4,500 each
business day
Realize an annual growth of approximately
10% for each year after the opening year of
each store
Target Market
Teens – 14 to 18 years of age
Have part-time jobs
Looking for good value
Young Adults – 19 to 25 years of age
Usually in college
Have full or part time jobs
Choose to not cook for themselves
Looking for good value
Target Market (cont.)
Adults – 25 to 55 years of age
In careers
Working long hours
Choose not to cook for themselves due to time
challenges
Looking for healthy alternatives to beef and other
meats
Seniors – 55 + years of age
Fixed incomes
Looking for healthy alternatives to beef and other
meats
Target Market (cont.)
Travelers – all ages
Families with children
Traveling through Michigan
Looking for good value
Critical Issues
Closed on Sundays
Competitive chicken products
Strong display of Christian values and beliefs
Marketing Mix
Marketing the Chick Overview
4 P’s: (product, price, place, and
promotion)
3 P’s: (people, physical evidence, and
process)
4 C’s: (customer value, cost,
convenience, and communication)
Chick Menu
Product Marketing: The restaurant only serves
chicken no beef or steak
Special Menus:
Build Your Own Meal
Being a Chicken
Satellite/Lunch-Counter
Getting the Chick-fil-A Word Out
Pricing
Promotion
Advertising channels (various counties)
Public relations
Direct marketing
More Chicken Marketing
Web planning
Website goals
Service
Marketing Strategy
Introduce healthy menu offerings through:
Social media
Coupons
Loyalty programs
Basic cable advertising
Financials
Income Statement
CHICK-FIL-A MICHIGAN
PROJECTED INCOME STATEMENTS
FOR FISCAL YEARS ENDED SEPTEMBER 30TH
NET SALES
$
2014
2015
2016
2017
2018
$
$
$
$
$
2014
2015
2016
2017
2018
3,257,800
6,841,380
9,741,118
13,973,030
18,628,133
925,000
1,850,000
2,500,000
3,425,000
4,350,000
28.39%
27.04%
25.66%
24.51%
23.35%
2,332,800
4,991,380
7,241,118
10,548,030
14,278,133
71.61%
72.96%
74.34%
75.49%
76.65%
1,640,000
2,300,000
3,440,000
4,440,000
4,800,000
50.34%
33.62%
35.31%
31.78%
25.77%
692,800
2,691,380
3,801,118
6,108,030
9,478,133
21.27%
39.34%
39.02%
43.71%
50.88%
57,600
71,100
99,900
128,700
130,500
1.77%
1.04%
1.03%
0.92%
0.70%
EARNINGS BEFORE TAXES
635,200
2,620,280
3,701,218
5,979,330
9,347,633
19.50%
38.30%
38.00%
42.79%
50.18%
LESS: TAXES (30%)
190,560
786,084
1,110,365
1,793,799
2,804,290
5.85%
11.49%
11.40%
12.84%
15.05%
2,590,853 $
4,185,531 $
6,543,343
13.65%
26.81%
26.60%
29.95%
35.13%
LESS: COST OF GOODS SOLD
GROSS INCOME
LESS: SELLING & ADMINISTATIVE EXPENSES
OPERATING INCOME
LESS: INTEREST EXPENSES
NET INCOME
$
444,640 $ 1,834,196 $
100.00% 100.00% 100.00% 100.00% 100.00%
CHICK-FIL-A MICHIGAN
PROJECTED BALANCE SHEET
FOR FISCAL YEARS ENDED SEPTEMBER 30TH
Balance Sheet
Assets
2014
2015
2016
2017
2018
$
$
$
$
$
2014
2015
2
7
Current Assets
Cash and Cash Equivalent
Accounts Receivable
Inventory
Total Current Assets
Property, Stores, and Equipment (net)
1,759,520
3,581,956
5,268,213
7,601,771
10,122,463
67.76%
68.15%
32,000
64,000
88,000
120,000
152,000
1.23%
1.22%
160,000
320,000
440,000
600,000
760,000
6.16%
6.09%
1,951,520
3,965,956
5,796,213
8,321,771
11,034,463
75.16%
75.45%
0.00%
0.00%
7
576,000
1,152,000
1,422,000
1,998,000
2,574,000
22.18%
21.92%
69,120
138,240
170,640
239,760
308,880
2.66%
2.63%
2,596,640
5,256,196
7,388,853
10,559,531
13,917,343
Accounts Payable
400,000
800,000
1,120,000
1,520,000
1,920,000
15.40%
15.22%
1
Salary's Payable
600,000
1,200,000
1,680,000
2,280,000
2,880,000
23.11%
22.83%
2
1,000,000
2,000,000
2,800,000
3,800,000
4,800,000
38.51%
38.05%
3
1,152,000
1,422,000
1,998,000
2,574,000
2,574,000
44.37%
27.05%
2
2,152,000
3,422,000
4,798,000
6,374,000
7,374,000
82.88%
65.10%
6
0.00%
0.00%
Other Non-Current Assets
Total Assets
1
100.00% 100.00% 10
Liabilities and Owner's Equity
Current Liabilities
Total Current Liabilities
Long Term Debt
Total Liabilities
Owner's Equity
Retained Earnings
Total Owners Equity
Total Liabilities and Owners Equity
$
444,640
1,834,196
2,590,853
4,185,531
6,543,343
17.12%
34.90%
3
444,640
1,834,196
2,590,853
4,185,531
6,543,343
17.12%
34.90%
3
7,388,853
$ 10,559,531
$ 13,917,343
2,596,640
$
5,256,196
$
100.00% 100.00% 10
Sales Forecast
CHICK-FIL-A MICHIGAN
SALES FORECAST
FOR FISCAL YEARS ENDED
2014
2015
2016
2017
2018
In Store
$ 3,225,222
$ 6,772,966
$ 9,643,707
$ 13,833,300
$ 18,441,851
On-line
$
$
$
$
$
SALES
Direct Sales ($)
Estimated Total Sales
32,578
68,414
97,411
139,730
186,281
$ 3,257,800
$ 6,841,380
$ 9,741,118
$ 13,973,030
$ 18,628,133
In-Store
$ 1,012,875
$ 2,025,750
$ 2,737,500
$ 3,750,375
$ 4,763,250
On-Line
$
$
$
$
$
COST OF SALES
Cost of Direct Sales
Estimated Total Cost of Sales
Cost as a % of Sales
50,875
101,750
137,500
188,375
239,250
$ 1,063,750
$ 2,127,500
$ 2,875,000
$ 3,938,750
$ 5,002,500
33%
31%
30%
28%
27%
Break-Even Analysis
CHICK-FIL-A MICHIGAN
BREAK-EVEN ANALYSIS
FOR STAND ALONE STORE
Cost
Annual Cost
Monthly Cost
35%
35%
Stand Alone Store
Variable Costs Assumption
Loan Payments
$
490,000
$
40,833
Payroll
$
360,000
$
30,000
Utilities
$
10,800
$
900
Recuring Marketing Expense
$
250,000
$
20,833
$
1,110,800
$
92,567
Revenue Break Even
$
1,708,923
$
142,410
Actual Revenue
$
2,150,000
$
179,167
Total Fixed
Mall/In-Line Store
35%
Variable Costs Assumption
35%
Lease Payments
$
96,000
$
8,000
Payroll
$
240,000
$
20,000
Utilities
$
8,000
$
667
Recuring Marketing Expense
$
100,000
$
8,333
$
444,000
$
37,000
Revenue Break Even
$
683,077
$
56,923
Actual Revenue
$
1,107,800
$
92,317
Total Fixed
Controls
Keys to Success
Create repeat customers
Generate new customers
Annual sales of $1.1 million at public locations
Uphold the values and traditions
Philanthropic contributor in the community
Host and sponsor community events
Increase profits at each location by 8% annually
Controls
Sell each item at a profit margin of at least 5.1%
Annual income for stand alone restaurants of $2.1 million
Annual income for mall/in line restaurants of $1.1 million
Continue to pay down the lines of credit by $40,000 per
year
Provide at least 3 $1,000 scholarships per year per location
for employees to further education
Employees participation in profit sharing at each location
Locations will be closed on Sundays to allow staff to spend
time with their families and observe Christian Sabbath
Implementation
Meet daily goals
Monthly meetings with managers and
assistant managers
Quarterly ownership and management
business plan reviews
Risks
Negative feedback from customers
Nontraditional franchise locations too
exclusive for general public
Scholarships and donations are given at a rate
that significantly reduce profits
Management does not comply with corporate
values
Risk Mitigation
Change management leadership
Lessen donations and scholarships for eligible
individuals/organizations.
Close non-revenue generating locations
Marketing Research/CRM
How did you hear about Chick-fil-A?
How frequently do you/your family eat out in a
month?
On a scale of 1-10 (1 lowest, 10 highest):
How was your overall experience at Chick-fil-A?
How would you rate the cleanliness of the
restaurant?
How was the service provided at Chick-fil-A?
Do you have any suggestions for improvements
that can be made to Chick-fil-A?
Summary
Chick-fil-A:
Healthy option
Good value
Profitable company
Invest in their people and the
community
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