Eat Mor Chikin? McDonald's franchisees aim to compete with Chick-fil-A

Dive Brief:

The National Owners Association told McDonald's franchisees on Tuesday that adding a chicken sandwich to the menu should be a top priority, especially with Chick-fil-A's growing dominance in the industry. The organization warned franchisees that even though Chick-fil-A may not be in every market and have the same scale as it does in the southeast, it is expanding quickly and doesn't offer discounts, according to CNBC.
McDonald's already offers Chicken McNuggets and a McChicken sandwich, but doesn't offer a premium or crispy chicken sandwich akin to Chick-fil-A's recipe.
The organization suggested that McDonald's should start testing a Southern Style Chicken Sandwich and use similar techniques as Chick-fil-A, such as using a foil bag and buttered bun. McDonald's used to have this sandwich, but pulled it off of the national menu a few years ago.

Dive Insight:

Chick-fil-A's growing dominance in the industry, boasting sales of $10.5 billion even though it's closed on Sundays, is rightfully a concern for McDonald's franchisees. Chick-fil-A grew 16.7% in sales last year, according to Nation’s Restaurant News. The overall restaurant industry grew 3.6% in 2018.

The chain is posting these sales even though it has 2,000 units compared to McDonald's 14,000 U.S. units and is quickly expanding outside of its main territory of the southeast, according to CNBC. Average sales per unit dwarf McDonald's. Chick-fil-A averages $4.4 million per unit, roughly $2 million more than McDonald's average unit sales. The chain also doesn't offer a value menu, has offered a simplified menu from day one, and has quickly become a customer favorite.

NOA's call for a premium sandwich may be an uphill battle, especially since corporate just cut its premium burgers and sandwiches from the menu. But considering McDonald's has been experimenting a lot lately to try and boost overall growth and efficiencies, NOA does have a chance to influence menu decisions. The chain is also giving franchisee concerns much more credence, ceding control of all-day breakfast menu to local operators.

The NOA told franchisees in the email that two of the biggest issues franchisees have struggled with is the chain’s approach to everyday value at the national level, calling it "impossible and ineffective" and not sustainable for local operators.

It also criticized the chain’s use of product promotions. While Quarter Pounders promotions have proven successful since it followed customer trends, recent promotions on worldwide favorites have not been. Instead, McDonald's should focus on providing a sandwich that can compete with Chick-fil-A, especially in the southeast.

The chain is planning to roll out a spicy chicken sandwich and spicy chicken tenders in mid-September, which could provide corporate with some data on how successful a chicken menu item can be.