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Southern Classic Chicken: Franchising In A Crowded Fried Chicken Universe

November 2, 2020

The giants of the fried chicken chains in the U.S. include KFC with about 4,500 locations, Chick-fil-A with 2,600 and Popeyes with around 2,500.

So why is Southern Classic Chicken, based in Shreveport, Louisiana, with 17 company-owned restaurants, joining the franchising wars in October 2020?  To succeed, it must prove it can carve out a niche in an increasingly crowded sector. And during a pandemic?

Owned by the Fanning family for over 30 years, it has hired Nick Binnings as director of brand development and Tom O’Keefe as managing director, who had been president and COO of Smoothie King.

Southern Classic Chicken is concentrated in the South, namely in Louisiana (it’s headquartered in Shreveport, La.), Mississippi, Arkansas and Texas, which happen to be states it’s targeting for franchising opportunities.

It will continue to expand in two ways: company-owned outlets and franchised locations. Since it often buys the real-estate when it develops a new corporate-owned outpost, it can be capital intensive. The franchise model relies more on the franchisee’s funding.

It prides itself on competitive pricing, based on its fried chicken dinner, which consists of a minimum of two pieces of chicken, one regular side, and a 20-ounce drink, for $5 to $7. Its sides include Cajun rice, mashed potatoes, red beans and rice, sweet-corn grit and French fries.

While most fried chicken chains offer healthier dining alternatives such as chicken salads, grilled chicken and wraps, Southern Classic doesn’t. Its classic fried chicken is the only entrée, so the health conscious have no options there.

“We let the consumer decide what level of moderation works for them,” points out managing director Tom O’Keefe.

“We might look into adding healthier items,” O’Keefe acknowledges, but it won’t stray far from its core business.

The pandemic hasn’t held it back. O’Keefe says, “Its affordable price point and a model that never relied on dining in, but on walk-up windows and drive-thrus, have increased sales over 20% this year.”

Furthermore, he expects there will be more favorable real-estate opportunities post-pandemic and a “forced competitive landscape in all segments created by the pandemic.”

When the pandemic hit, it assessed how the crisis would affect its franchising efforts, O’Keefe notes  It determined that its business model, which relied on convenience and quick ordering, could withstand the pandemic.

Asked how the franchising efforts were going, O’Keefe replied that it’s early but there’s been considerable interest and “some buzz generated. We have an established history; we’re a 35-year-old brand.”

It’s going to be selling franchised markets in three unit packages, not individual locations, such as a section of New Orleans. It’s pursuing franchisees “who are seasoned operators, have the financial wherewithal, and infrastructure and may have experience with other brands,” O’Keefe asserts.

It’s thrived in the South, O’Keefe notes, because “of the price and value relationship in the market has been terrifically received. Fried chicken has its roots in the South.”

Most of its restaurants in the South have returned to indoor dining at 75% capacity, but with spacing requirements, it amounts to about 50% capacity.

With its drive-through and walk-up sales, and about to introduce online ordering, its revenue is up about 20% pre-pandemic. And, at this point, it doesn’t offer any third-party delivery service.

Joe Caruso, a principal at consultant Franchise Info, based in Havre de Grace, Maryland, says Southern Classic Chicken isn’t just tangling with chains for market share but a bevy of quick-service eateries that also sell fried chicken. “So they will have to compete on taste, price and convenience,” he points out.

He also says it possesses a “local market advantage with their 30 year history, and they’ll need to leverage that along with filling in the map with new restaurants within their current footprint.”

Caruso cites certain advantages including a “streamlined menu and in an age of Covid-19, an off-premises food carryout with a tight menu served hot, fresh and fast is an advantage.”

Furthermore, it’s expanding in the South where people know its name. Yet Caruso wonders if “Southern Classic has the Chick-fil-A cachet and perceived value with its customers” to become competitive with the giants.

By the end of 2021, O’Keefe expects that it will have signed five to 10 deals, which entails 15 to 30 locations in the pipeline. 

He describes the three keys to its success as: 1) operating the business model efficiently and profitably, 2) embarking on a successful franchise development program, 3) adhering to a strict, disciplined growth strategy.

Source: https://www.forbes.com/sites/garystern/2020/11/02/southern-classic-chicken-franchising-in-a-crowded-fried-chicken-universe/?sh=4ef52526f14e

Gary Stern, Contributor
Food & Drink
I cover the restaurant industry.

 

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