Building A Comfort Food Brand In An Uncomfortable Time
Nov 30, 2020
An In-Depth Interview With Scott Deviney, President & CEO of Chicken Salad Chick
Eight years ago, my ever-present restaurant and franchise radar went up when I first heard of a new franchise brand called Chicken Salad Chick. At first, I thought, OK, I love the Southern classic comfort food, but could you actually build a chain of restaurants around the simple idea of Chicken Salad? Of course, there are many examples of expanding single-product businesses. Not only because they strike a chord with consumers, but also because of passion, love of mission, and sometimes circumstance driving the founder to forge ahead regardless of the potential pitfalls. Such is the case with Chicken Salad Chick.
Its founder, Stacy Brown, perfected her chicken salad recipe at home. She started selling it door to door, garnering rave reviews and letting nothing stop her. When I learned this, I thought, wow, could a chicken salad version of Debbie Fields and her creation of the premium cookie franchise be on the horizon. So I researched and found that yes indeed, yet another entrepreneurial endeavor, born out of necessity, was captivating great food lovers.
As their website states: Orders poured in; Chicken Salad Chick was born. One day Stacy received a call from Stan with the Lee County Health Department, who told her the home business was illegal. With her chicken salad still in high demand, Stacy and her husband, Kevin Brown, were motivated to open up a carry-out only, humble yet honest-to-goodness restaurant where they could spread joy, enrich lives, and serve others. The rest, as they say, is history.
Chicken Salad Chick opened it’s the first unit as a “take out” shop in 2008. Today, it’s grown to 160 units. Currently, the company is headed by former banker and former Wendy’s franchisee, Scott Deviney. I had the pleasure of conducting an interview (albeit via email) with Scott. He shared his thoughts on the founder, the brand, and navigating through the challenging times brought to us by the coronavirus.
Gary Occhiogrosso: Can you share more about Chicken Salad Chick’s story?
Scott Deviney: Chicken Salad Chick was founded in Auburn, Alabama, by Stacy Brown. In 2007, Stacy was a newly-divorced, full-time stay-at-home mom when she started making chicken salad out of her home and selling it door-to-door. Two months after launching her delivery service, Stacy’s love of chicken salad had become a thriving entrepreneurial business. In 2008, Stacy sought the business expertise of family friend, Kevin Brown, and they partnered (and later married) to turn the concept into a takeout-only restaurant. The first Chicken Salad Chick location opened in Auburn that year, and within two hours, the restaurant completely sold out of chicken salad, becoming what most would call “an overnight success,” although Stacy probably feels differently about that.
Stacy and Kevin expanded Chicken Salad Chick to three restaurants throughout Auburn and began franchising in 2012. The earliest franchise locations opened in Alabama, Georgia, and Florida, and it took off from there! I took over the reins as president and CEO when private equity firm Eagle Merchant Partners purchased Chicken Salad Chick in 2015. Today, the brand has grown to more than 160 restaurants in 17 states, all selling Stacy’s original chicken salad recipes. We like to think we put a twist on a Southern classic, offering guests a “custom fit” chicken salad experience with 12 original flavors to choose from, as well as gourmet soups, flavorful side salads, and freshly-baked desserts.
Occhiogrosso: Tell us more about your background.
Deviney: After graduating from the University of Georgia, I spent 13 years in various roles in banking, including five years in the restaurant space. I spent some time in New York early in my career working with large corporations and then in Atlanta to help form a food and beverage group for the bank; that’s when I began calling on restaurant franchisees and franchisors. At the time, restaurant franchises like Burger King and Pizza Hut were selling restaurants to franchisees to create large multi-unit operators. I financed many of the deals for these brands, and that’s how I really learned the industry. Once I learned more about the franchisee-franchisor relationship and realized that franchising was a people business, no matter the product, I fell in love with the model.
I got the entrepreneurial bug and left banking in 2008 to purchase 19 existing Wendy’s restaurants in the Atlanta area, followed by purchasing five more in early 2009. I ran that business for six years. I sold the business in 2014 and began working on the Chicken Salad Chick transaction with private equity firm, Eagle Merchant Partners. The rest is history!
Occhiogrosso: How did you get involved with Chicken Salad Chick?
Deviney: Chicken Salad Chick’s cofounder, Kevin Brown, had a high school friend named Adam Reeves, who introduced me to the brand. I had known Adam for a few years, and in 2014 he approached me about partnering up to become a franchisee of this brand called Chicken Salad Chick, which had less than 15 locations. I had never heard of the chain, and at the time, I was in the process of selling my 24 Wendy’s, so I didn’t have the strong desire to be in the franchisee role again.
A few weeks later, Adam called me again and asked me to help him become a franchisee. We talked more about the concept and how it was growing and occupied a unique niche. Somewhere in that conversation, Adam brought up Kevin’s cancer, and I thought Kevin might want to sell the business and focus on his health and life. That night, Kevin and Adam discussed the idea, and Kevin was interested. (Chicken Salad Chick’s co-founder, Kevin Brown, passed away in 2015.)
Not too long after that conversation, Adam and I went to Auburn and spent the day with Kevin. I had the opportunity to learn a lot more about the business. I ended up meeting Stacy later the same day, and we discussed what the next chapter could look like. The next day we signed the non-disclosure agreement, and I started building a model. I then reached out Eagle Merchant Partners to gauge their interest in partnering with me, and we worked on a potential transaction. We closed on the acquisition May 1, 2015, following a team effort.
Occhiogrosso: When you first started with Chicken Salad Chick, what was your long-term vision for the brand?
Deviney: There were several things I loved about Chicken Salad Chick right away. One, it is a female-centric brand, so – whether it’s on-trend or off-trend – women are usually the ones making the decisions for the household. I also loved the fact that the product was made from scratch daily using fresh ingredients. Often times, there’s somewhat of an instinct to identify a brand’s core product and then go build a full menu around it with something else, but I didn’t want to do that with Chicken Salad Chick. It was obvious chicken salad was the hero, and what made the story so unique.
Although Chicken Salad Chick’s menu is predominantly focused on chicken salad as its core product, there is still plenty of variety with different flavors to choose from and combinations to make, along with soups, salads, and more. Its simplistic business model and unique offering made it incredibly viable for scalability, and I saw the potential to grow the brand to a national scale driven by a purpose of spreading joy, enriching lives, and serving others.
By the time I came into the brand in 2015, Stacy and Kevin had already laid the groundwork to position Chicken Salad Chick for accelerated growth. There were 32 restaurants in six states and an established network of franchise owners that had a true desire to build the brand. We saw it as our opportunity to take all that Stacy and Kevin had done organically and put the right people and systems in place to take the brand to then next level.
We placed our focus on building out the team and having our functional department leaders, immediately hiring leaders for real estate, I.T., marketing, finance, and franchise development. We also looked at every facet of the business, including store layout, menu, demographics, and the successful franchise owners to take inventory of what was really working and what we could do to switch up what wasn’t.
Occhiogrosso: Can you tell us more about Chicken Salad Chick’s growth throughout your tenure?
Deviney: From the beginning, our plan was to grow in states that were concentric to the six states where there were already restaurants open. We wanted to make sure we had strong brand awareness where we were, and growing in this way also helped with the distribution of our products. Once we had the infrastructure in place, we made it our goal to build up to 50 restaurants a year.
Last year was our most successful year yet in terms of grand openings and sales. We opened 40 new restaurants in 2019, including our first locations in Ohio and Illinois, and signed 26 franchise agreements to open 60 new restaurants over the next several years. The year before that, in 2018, we opened 26 new restaurants, and 17 in 2017. Despite some delays with the pandemic, we’ve still opened 19 new restaurants this year and are projected to open 34 total by the end of 2020. So, we’ve been on this uphill trajectory for a few years now, and we’ve also seen significant average unit volume increases, up 36% since 2015.
What’s been key to this success is the balanced mix of opening company stores alongside both new and existing franchise owners and having the right partners in place, which has allowed us to build up our pipeline and reach our goal of 50 openings a year pretty quickly. By 2019, we had grown so much that Eagle Merchant Partners had seen profit on their investment and was ready to exit.
I immediately got to work on finding a new private equity partner that would create a secure future for us and help to support our aggressive growth plans. We made the strategic decision to partner with Brentwood Associates in November 2019. Brentwood has a long track record of working with leading restaurant companies, and they shared our vision for long-term growth and had a clear understanding of our business objectives. They have been a tremendous partner to us, especially throughout the past several months during challenging times.
Today about 20-30% of our 160+ restaurants are company-owned and 70-80% franchised. Our growth plan is to continue to open state by state by maintaining that mix and staying true to our united purpose of spreading joy, enriching lives, and serving others.
Occhiogrosso: The COVID-19 pandemic has obviously been an unprecedented time, and it has had a big impact on the restaurant industry. How did you mobilize, navigate, and support your corporate team and franchisees?
Deviney: COVID-19 came with no playbook. You know, if sales drop because of marketing, there’s lots of playbooks you can go to for that. With this one, it was unprecedented, so there was nothing to work from, and we were all faced with the dilemma at the same time. We were all moving at the speed of light to try and maneuver this. The executive team got on the phone every morning for an hour to an hour and a half, six days a week, to walk through everything. We were running through every scenario, looking at data, trying to figure out what we needed to do on the corporate side to help our franchise owners navigate. We were so fortunate to have a really strong team of people in place, which made the process of making decisions in the best interest of the public, and our brand, employees, and franchise owners a little easier.
We also had some really great ideas from franchise owners that we implemented systemwide, like Quick Chick Drop-Offs in local communities, as well as giveback initiatives like “Feeding the Frontlines” and “Donate A Meal” programs. We really listened to our franchise owners when they had an idea, rather than just dismiss it because we wanted to keep an open dialogue going throughout all this.
Long story short, there was no holy grail of ‘this is the one thing that’s going to keep us afloat and keep us going.’ It was a culmination of a lot of good things coming from all areas of our network. Ensuring our franchise owners felt seen and heard was the thing I felt was of the utmost importance because they were working night and day, around the clock to find ways to help keep their businesses going. It was really fascinating to watch.
Occhiogrosso: How did your experiences as a franchisee aid you as a president/CEO on the franchisor side?
Deviney: Being a franchisee of a very large brand at a time when the country was recovering from the 2008 recession, opened my eyes to a lot of things that I still carry with me today. Throughout the six years, I was a franchisee, there had been four company CEOs, and around three or four new building prototypes. Each time a new limited-time offer was rolled out, there was a sizeable invoice for equipment and extra inventory. It’s because of those experiences as a franchisee why I always keep a “franchisee hat” on in my current role – to make sure our franchise owners are profitable and doing well.
Having my experiences as a franchisee proved more important than ever during this time of unprecedented uncertainty because I knew some of what our owners were going through. It was imperative to me that our franchise owners felt supported and that we were all in this together. In that same vein, I try to keep the whole executive team in the franchisee mindset as well, reminding them that our franchise owners have invested capital and put their name on a personal guarantee – whether it be a loan, commercial lease, or something else – and to never underestimate the sleepless nights that can come with that. If our franchise owners are happy and doing well, they will want to stay and grow with us, or be an advocate for those that want to grow with us. I keep a franchisee-first perspective in everything I do.
Occhiogrosso: Tell us more about your franchisees and some of the ways they innovated.
Deviney: I may be biased, but I believe we have the best franchise owners in any system. They’re passionate about Chicken Salad Chick and do a wonderful job of building their businesses in their communities. About half of our system is husband-and-wife partnerships, about 25% is female-owned, and the remaining 25% is male-owned. Our business model is perfect for the husband-and-wife team that want to pursue entrepreneurship but don’t want the business to rule their lives. Our restaurants close by 8 p.m. Monday through Saturday and are closed entirely on Sundays. While we prefer restaurant experience, it is not mandatory. Our purpose is to spread joy, enrich lives, and serve others, and our franchise owners share this purpose and live it each and every day. Throughout the pandemic, our owners have been our greatest innovators.
Like I mentioned before, there were several great ideas that came from our franchise network that we ended up implementing systemwide. Only around 40% of our locations have drive-thrus, so a few of our owners got innovative and, in addition to creating pop up drive-thrus outside of their restaurants, began doing what we now call “Quick Chick Drop-Offs.” Quick Chicks are prepackaged portions of our 12 chicken salad flavors that guests can traditionally come into the restaurant and pick up from a cooler situated by the cash registers.
With mandated closures of restaurant dining rooms, our franchise owners began posting announcements to social media that they would be doing drop-offs at a local meeting place, such as a high school or conveniently located parking lot. Stores would collect preorders in advance of the drop, and then guests could come meet them at the designated meeting place where team members would deliver orders directly to guests in their vehicles. This was wildly successful during this time and allowed guests to still interact with the brand in a way that kept everyone safe.
In addition to the drop-offs, our franchise owners came up with community giveback initiatives that aligned with Chicken Salad Chick’s purpose. Through programs like “Feeding The Frontlines” and “Donate A Meal,” we donated thousands of free meals to healthcare workers and first responders like nurses, doctors, medical technicians, EMTs in hospitals, and medical offices, as well as police and fire departments, grocery stores, and more.
Occhiogrosso: What have been some key takeaways from the pandemic you’ll apply to Chicken Salad Chick in the future?
Deviney: Continue to keep an open dialogue with your franchise owners and corporate employees. We have approximately 1,300 corporate employees across our home office and company stores, and sometimes in a franchise organization, you can spend so much time talking to your franchise owners, you forget you have over a thousand people working for you. I had to take a step back and remember the balance between the two because, like our franchise owners, our company employees have families they’re looking out for, and they’re looking for guidance and support through the process too.
Be willing to talk about innovation – wherever it comes from. Our franchise owners were an excellent resource for us to tap into as we worked to navigate these uncharted waters, but, at the end of the day, it’s our responsibility as the executive team to be the guardrails for the brand. It is extremely important to always keep the brand at the forefront and ensure that whatever it is that you’re implementing is in the best interest of the system in totality. Some great ideas work well in local markets but won’t work well for the entire system so, we had to take into account the long-term ramifications of our decisions.
Another takeaway I had was there are a lot of people that are either falsely over-confident or under-confident. By that, I mean, if you have a drive-thru, you have something that is in high-demand; but if you don’t, you have to be a little more innovative. Some restaurant brands can fall victim to success because there’s limited supply, but extreme demand, so you’re going to have great success right now, and it’s not because of anything particularly innovative other than the fact that you’re open and have a drive-thru. So you can take for granted the success, but you also can’t get too down on yourself if you’re not doing as well because, again, there is no playbook. Keeping things in perspective is extremely important during these times. And, of course, how you treat your people will always help you be successful in the long run, and I made it my goal to have our team come out on the other side stronger than we were before.
Occhiogrosso: What does the future look like for Chicken Salad Chick?
Deviney: The future has never been brighter for our brand than it is right now. We’re proud of how we navigated the pandemic, and we’re coming out on the other side of this with a larger guest base than we had going into the shutdown. More people are aware of Chicken Salad Chick and the wonderful food we serve in our restaurants due to our grassroots marketing and delivery efforts, and I believe we will continue to expand and grow our business. Our vision is to be America’s favorite place for chicken salad, and we plan on having 500 restaurants open by the end of 2025.
To Sum It Up
I want to thank Scott Deviney for his time answering all these questions and showing us that perseverance, strategy, and franchisee participation will always win the day. It need not be complex or expensive to find a way to grow and succeed. It’s comforting to know that comfort food is not only good for the soul; it’s also good for business.