Lorden, Abigail A, After hitting the $1Billion Mark, Church's Chicken aims to double in size by 2011, Hospitality Technology, September 2007
Cover Story: Millions of Chicken's Sold
Summary
Since George W. Church found the chain, Church's Chicken in 1952 it has expanded into a billion dollar business. Through a mix of innovation and simplicity Church's Chicken plans to double in size by the year 2011 from approx. 1600 locations now to 2500 locations across the globe. Harsha V. Agadi, the company's current president and CEO became a chief executive on December 26th, 2004 a date which is referred in the company as "Independence day" because of when Church's Chicken's official shifted from AFC Enterprises to Crescent Capital. In 2005, guest number's increased and Church's introduced two new product launches inclusive of a spicy bone-in chicken and the 99-cent Spicy Chicken Sandwich. The growth will occur though the expansion of units in both domestic and international markets and building out it's franchise base. Church's Chicken is located in 30 states and targets lower income neighborhoods where great food at lower prices are valued. Internationally there are over 400 stores in 18 International countries. 80% of new locations will be franchised and 20% will be company owned internationally. Agadi feels that the key to successful franchising is setting the standard at the corporate level. Innovation at Church's has meant outsourcing many of it's operation and technology systems through installation of Radiant point of sales systems and Texas digital drive thru timers, Mirus Restaurant Solutions, sandwich stations into kitchen operations, rebuilding and relocating numerous company stores, and new spicy chicken options. Outsourcing functions include accounting and employee expense reporting, bank reconciliation, and payroll. Agadi feels that outsourcing help the company grow without having to add resources. And the ultimate goal is to simplify operations, drive down operating costs, and free up capital to invest in the product as to grow more locations world-wide.
Reflection
I found that this article was very informative. Through outsourcing IT and setting proper goals, Church's Chicken will hopefully be able to double in size by 2011. Sonata Information Technology, out of Bangalore, India helps Church's Chicken in providing IT consulting, application development, and management services. It creates personalized reports for the executive and management teams and helps them make quick decisions for the companies worldwide. Sonata is able to focus on Church's immediate access to information so that executive offices can deal with the core business function of the company......to make chicken. The "independence day" of the company was a pivotal step in the expansion and future for Church's Chicken. A 390 Million transaction allowed Church's to revamp their menu strategy to target the product offerings. I found this change to be essentially and with the marketing of the new spicy bone-in chicken and the 99 cent spicy chicken sandwich the company was well on it's way down a path of success. This article proves how a good partnership with an IT company and a strong company like Cresent Capital can make a world of difference in the hospitality industry.
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7 comments:
This case is a perfect demonstration of how technology can benefit hospitality business in an effective way. I can take two main ideas from this article. The first one is the outsourcing strategy for restaurant automations. In this way, properties don't have to worry about the high expense to develop, test and implement a specific system for everything which will greatly lower the cost and labor. One suggestion is that maybe SAP model could be one choice for Church's Chicken as it will save more money and this model is largely available for properties like this. However, as all information such as ordering and accounting are going through the outsourcing companies, Church's Chicken should really pay attention to the permission to use the information as you will never know what data mining result will be if you put different information together. They should have some kind of pre-agreement on the information usage.
The second point I want to take from this how to differentiate the property from others. Technology is good in the automation but also it will bring mass commoditization to the company. Every company can use the same technology to get the same result. However, as this company aims lower income neighborhoods where great food at lower prices are valued, maybe this is not a serious problem for them.
I agree in that this is a great example of technology helping a hospitality outlet. When technology is used in an effective manner it can increase revenue and success of a company into unchartered terretory. Being able to integrate technology into hospitality in a easy to use and effective manner is the challenge that we must overcome.
This article is a very good example of how an up and coming companies can improve on their services while outsourcing their IT practices to external companies. Just like what church's is doing there are a lot of companies that are now outsourcing their businesses abroad because of the low cost of labor and the level of expertise that these technology companies may possess. With the use of Outsourcing church's is able to continue opening up more stores and franchising the brand to potential business owners who may not be technology friendly. Church's chicken is a fast food chain which has more locations in the southern region of the country this is just something i observed when i visited Atlanta two years ago. one concept that Church's can adopt to provide better services is to have a healthy menu, using trans fat oil in preparing their food. outsourcing payroll and accounting functions is something that a lot of smaller companies are doing in this day and age. With the outsourcing of their different services church's can continue to grow as a company but then the company has to create a system whereby they have an idea to how the different units of the company function
This an an excellent demonstaration of how outsourcing labor and IT can effectively help a company to grow. A company like Church's Chicken will have an easier time growing if they are able to work with experts who can easily facilitate rapid growth and are familiar with it. This should help them achieve their goals by 2011. The advent of the spicy chicken sandwiches should help them compete with compnaies such as Wendy's effectively. Plus, they also have really good chicken.
It seems that the technological choices made by Church's Chicken have enabled this company to move forward. The IT savvy decisions they have made will ultimately lead to its success as a company. Their clear vision of the future also acts as an indicator of the success they will achieve. It is amazing how rapidly this company is growing and much of its growth can be attributed to the smart business decisions they have made.
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