Chicken Run

The success of chicken chains

By Allison Perlik, Senior Editor -- Restaurants & Institutions, 9/1/2003

Chicken has come a long way since fast-food pioneer Col. Harland Sanders first fried up the fare he called “finger-lickin’ good.”

More than 50 years later, finding a quality spot amid an abundance of chicken concepts is the simple part for poultry-hungry patrons. The difficulty lies in the host of menu decisions to be made: Wings, fingers, breasts or thighs? Broiled, fried, grilled or roasted? Dark meat or white? Marinated or sauced?

Given such a range of preparations, it’s no surprise that chicken’s appeal continues to grow. Per capita consumption has been on the rise for the better part of 40 years, according to the Economic Research Service of the U.S. Department of Agriculture. It estimates that Americans ate 80.9 pounds of chicken per capita in 2002, a number the Washington, D.C.-based National Chicken Council expects will grow to 84.5 pounds by 2006.

With nutritional values and extensive serving options that match current consumer tastes, chicken’s popularity is unlikely to wane. A flock of budding chicken chains stands ready to meet the rising demand.

Zaxby’s
Home base: Athens, Ga.
Units: 154
Seats: 96
Average check: $8
Average unit volume: more than $1 million
Growth plans: 1,000 stores by 2006
Why watch it?: Drive-thru adds convenience to concept billed as fast casual.

“A fresh approach to chicken” is the motto at Zaxby’s, a concept hatched in 1990 by childhood friends Zach McLeroy and Terry Townley while shooting hoops in their hometown of Statesboro, Ga. More than a decade later, the duo’s ambitious growth plans are spurred by recent success: In the past eight months, Zaxby’s has signed several multi-unit development agreements for five to 20 units each and added 35 more license agreements in May alone.

The chain’s menu is simple, focusing on fried chicken fingers and four dipping sauces: barbecue, honey-mustard, teriyaki and Zax Sauce, a zesty orange signature that CEO McLeroy says “really wakes up your tastes.” Other offerings include Buffalo chicken fingers and wings, sandwich baskets, salads and sides.

Customers order at a counter, and pagers alert them when their prepared-to-order meals are ready in eight to 10 minutes. Drive-thru service also is available but accounts for a small percentage of traffic.

Wing Zone
Home base: Atlanta
Units: 42
Seats: takeout/delivery only
Average check: $13
Average unit volume: n/a
Growth plans: 15 new stores in 2003; 200 to 225 total by 2008
Why watch it?: Free delivery, saucing options and college-town appeal differentiate it from other wing chains.

Out of the fraternity house and into the fire is one way to describe the evolution of Wing Zone, launched in 1991 by then-college students Matt Friedman and Adam Scott as an alternative to late-night pizza deliveries. Twelve years later, franchise-fueled growth has brought Wing Zone to more than 40 cities in 15 states.

The menu still centers on fresh, jumbo chicken wings, available in 25 sauces ranging from traditional hot and garlic-Parmesan to Nuclear Honey Teriyaki. As another signature option, diners can sauce up other menu items such as chicken sandwiches and fingers, burgers, salads and sides at no extra charge.

All wings are cooked to order, with 70% of sales typically from delivery (free within a three-mile radius) and the remainder from takeout. To best serve their young-adult audience, Wing Zones open at 4 p.m. and close between midnight and 3 a.m., with lunch service added on weekends.

Chicken Out Rotisserie
Home base: Gaithersburg, Md.
Units: 34
Seats: 100
Average check: $6.50 lunch; $8 dinner
Average unit volume: n/a
Growth plans: 4 to 6 in 2003; slow, steady expansion toward national coverage
Why watch it?: Securing $21.25 million in private financing fuels potential for long-term, large-scale growth.

Chicken Out Rotisserie’s menu may revolve around its signature product, but the lineup extends far beyond the hand-seasoned, marinated and basted chickens. In addition to a wider-than-usual selection of made-to-order sandwiches, salads and wraps, the fast- casual chain offers 24 side dishes, available in individual and large sizes. Customer favorites include red-skinned mashed potatoes, fresh-cut fruit salad, creamed spinach, orzo pasta salad and cranberry relish.

At lunchtime, platters—which include a quarter or half chicken and two sides—are top sellers, while family feasts of whole chickens with three large sides and French baguette are popular at dinner. President and CEO Lee Hindin says that while Chicken Out is not looking to be positioned as a healthy concept, it does offer products with high nutritional value and no additives or preservatives. Chickens are prepared every hour, with those not sold in that time used in chicken salad or for stock.

Chicken Kitchen
Home base: North Miami, Fla.
Units: 25
Seats: 48 to 60
Average check: $7.50 lunch; $11 dinner
Average unit volume: $1.1 million
Growth plans: 5 more in 2003; 5 to 6 new markets in 2004 as nationwide expansion continues
Why watch it?: Menu offers healthful items without sacrificing flavor; matches taste trends.

Striving to serve something other than the “bone in a batter” he says he found at typical fried-chicken chains, founder and President Christian de Berdouaré opened the first Chicken Kitchen in 1983. The dine-in, takeout and delivery concept’s units have no fryers or freezers on premise, and most menu tems are prepared in accordance with American Heart Association recommendations.

The chain soon plans to expand nationally, driven by the success of its California/Mediterranean-style menu of marinated, grilled-to-order chicken, pita sandwiches, salads, soups and sides. Most popular are Chicken Kitchen’s signature Chop-Chops: skinless, boneless chicken breast and toppings including vegetables, beans and cheese served on a bed of rice.

To bring the restaurants a modern, fast-casual look, de Berdouaré updated the décor to feature softer lighting, darker woods and granite countertops.

Pudgie’s Famous Chicken
Home base: Lake Success, N.Y.
Units: 33
Seats: limited; mainly takeout and delivery
Average check: $12.50
Average unit volume: $400,000 to $600,000
Growth plans: 5 more in 2003; 5 to 10 per year subsequently
Why watch it?: Maintains traditional QSR format and offers fried food that customers still crave while gaining edge for more-healthful products.

Being a fried-chicken chain doesn’t keep Pudgie’s Famous Chicken from crowing about its more-healthful fare. The Northeast regional concept coats its skinless, bone-in product with proprietary breading that it says contains 25% less fat and cholesterol than traditional fried chicken’s. Comfort foods such as barbecued ribs and chicken pot pie share the menu with sides ranging from zucchini sticks and stuffed jalapeños to spicy fries and mashed potatoes.

Pudgie’s also capitalizes on the advantages of co-branding, pairing most stores with Arthur Treacher’s Fish & Chips, a sister concept from parent company TruFoods Corp. Inside, the red, yellow and white décor is simple and bright. Delivery also is available, accounting for 40% to 70% of sales.

To develop additional location options, President and CEO Jeffrey Bernstein soon will test a Pudgie’s Express unit offering a streamlined menu suited to high-volume settings such as food courts and airports.