According to Berger (2015), Chick-Fil-A is the best fast-food company. The company enjoys market leadership for attributes that promote its marketability. First, the company applies a dedication to customer service. It enhances customer satisfaction by not only making use of the friendly staff but also building a positive customer in the process of serving customers. The second aspect of the company’s competitive strength is the use of powerful marketing tools such as the use of persuasive slogans. Thirdly, the company has a specialized menu that accommodates a variety of options for customers. Lastly, the company banks its success on values and authenticity; since the founder was a Southern Baptist, the company embraces the values of the church, which influences customer loyalty.
Chipotle Mexican Grill is ranked second in terms of customer satisfaction (Berger, 2015). The company commits to providing quality food by minimizing chains and processing of ingredients. It sources most ingredients from local producers. Berger (2015) confirms that the company declared that its products are non-GMO ingredients. Secondly, the company embraces simplicity in the presentation of its products. It rarely makes major changes to its menu. The simple menu ensures that the company delivers the necessary food quality owing to lack of complications. Thirdly, the company uses smart expansion strategies. The company builds and owns its restaurants giving it the operation control and the ability to deliver consistent quality.
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One of the challenges facing the fast-food industry is the demand for healthy foods. There is an increasing awareness of the essence of healthy foods that come from fresh ingredients. The need for a healthy lifestyle attributes to the increasing health complications such as cancer and obesity that are believed to be resulting from unhealthy food. Chipotle Mexican Grill manages to overcome the challenge through the strategy of making use of local ingredients from local producers, which minimizes the chain of supply that could compromise food quality.
One of the major sources of success for fast-food franchise competitors is brand recognition. According to Song and Jo (2018), marketing capability is a critical aspect of franchise businesses. Customers base their loyalty on established brands. A company that has already built a strong brand is likely to succeed in other markets as customers will easily recognize it. Secondly, franchise businesses have low operation costs. The parent organizations do not need to spend much in setting up the outlets or train staff. The franchisees make initial payments of becoming part of the parent organizations, which provides a cost-effective route for business development. Thirdly, management of franchise businesses is simple as the franchisees have the responsibility to run the businesses. Next, owing to the simple management structure, franchise businesses are not only able to expand faster but also have efficient market penetration.
Franchise businesses may not be reliable due to some limitations. First, franchise businesses have limitations that deter an entrepreneur from being innovative. Operational restrictions characterize the form of business such that an entrepreneur has the legal obligation to align the business as per the requirements of the parent organization. Park (2009) affirms that activities as the head office determine the success of the business. Therefore, a franchise entrepreneur only has a limit of control of the business. Secondly, the franchisor has to get a share of the profit. That limits the amount of profit that a franchisee can earn from the business (Winter et al., 2012). The objective of every business is profit maximization, the fact that the franchisor is entitled to a proportion of the profits impedes the development of the business. Next, there is a lack of flexibility in the type of business as the franchisor restricts the ability to introduce changes.
References
Berger, S. (2015, June 30). Best restaurants in USA: Chick-Fil-A trumps competition, McDonald's falls out of favor. Retrieved from the International Business Times Web site: http://www.ibtimes.com/best-restaurants-usa-chick-fil-trumps-competition-mcdonalds-falls-out-favor-1990232
Park, S. I. (2009). Analysis of factors affecting the performance of Korean franchise business by stages. Asia-Pacific Journal of Business Venturing and Entrepreneurship , 4 (1), 89-111.
Song, J. H., & Jo, G. B. (2018). Success Factors Analysis of Domestic Franchise Business: A Study on the CEO of Kwangju and Jeonnams. Journal of the Korea Society of Computer and Information , 23 (4), 155-165.
Winter, S. G., Szulanski, G., Ringov, D., & Jensen, R. J. (2012). Reproducing knowledge: Inaccurate replication and failure in franchise organizations. Organization Science , 23 (3), 672-685.
