Chicken Salad Chick inks franchise deals as it targets 500 units by 2025

Dive Brief:

Chicken Salad Chick has ramped up development across Texas, signing two franchise agreements that will bring 16 new restaurants, with eight designated for Austin and another eight for San Antonio over the next few years, according to a press release.
The fast casual chain will open five locations in the Lone Star State this year, adding to its plan of opening 50 units nationwide by the end of 2022.
The company, which surpassed 200 units in 2021, said it’s on track to its goal of having 500 units operating by the end of 2025.

Dive Insight:

Texas has become an increasingly popular destination for high-growth brands coming out of the pandemic due to its friendly business and tax environment. Chicken Salad Chick, which already has 21 locations across Dallas, Fort Worth and Houston, has a goal of adding 50 or more restaurants to the state over the next five years. The company is planning to leverage both additional agreements with existing franchisees as well as sign on new franchisees.

Existing franchise group Hazel 5 Ventures, which operates six units in the Forth Worth area, said it will open five more around the Greater Dallas region over the next three years. Metroplex CSC, which owns three locations in Dallas, plans to open 12 additional units over the next five years, with one in Frisco by the end of 2022.

"As our brand awareness and guest loyalty continue to increase, we are seeing a demand in franchise opportunities throughout the state," Scott Deviney, CEO of Chicken Salad Chick, said in a statement.

Other target markets in Texas include Abilene, Beaumont, Corpus Christi, Longview, Lubbock, Midland, Odessa, San Angelo, Sherman and Wichita Falls.

In 2021, the company opened 30 restaurants, increasing its unit count by 17%, according to a press release. By the end of this year, it should have around 250 restaurants. To reach 500 by 2025, it would need to accelerate its plans and open roughly 83 restaurants each year from 2023 to 2025.

Last year, Chicken Salad Chick saw its sales increase by 46% to $255 million compared to 2020. In the second half of 2021, the company claimed its average monthly sales growth outpaced the industry by over 14 percentage points.

The chain also expanded its various off-premise channels, rolling out third-party delivery with Uber Eats and DoorDash, which integrated with its online ordering partner Olo. Delivery grew to 7% of total monthly sales by the end of December. Catering also showed signs of recovery, with branded box lunch options making up more than 75% of its catering mix and helping the company increase catering sales by double-digits over 2019.

Chicken Salad Chick’s operations make it more attractive to franchisees since it doesn’t use fryers or grills, Deviney told Restaurant Dive in 2019. While it prefers drive-thrus and an outdoor dining area, it is flexible with its real estate and can use inline or endcaps as well, he said.

In addition to Texas, the company has also been targeting other states, including Virginia, West Virginia, Arkansas, Kansas, Nebraska, Iowa, Missouri, Illinois, Indiana, Ohio and Kentucky. Franchisees ideally should have a minimum net worth of $600,000 and liquid assets of at least $200,000. Initial investments cost about $562,000 to $740,000 with a $50,000 initial franchise fee.