Chicken sandwich chain plans Chicago-area debut
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(Crain’s) — Known for its ads with cows imploring customers to “Eat Mor Chikn,” the Chick-Fil-A Inc. chicken sandwich chain has struck a deal for its first restaurant in the home of the Big Mac.
Atlanta-based Chick-Fil-A has agreed to buy the site of a shuttered restaurant next to the Westfield Fox Valley Shopping Center in Aurora, where the company plans to tear down the existing structure to build a new restaurant with a drive-through.
“I know they are looking at multiple sites, I just don’t know how many,” says real estate broker Al Caruana, who represents the seller, Orlando, Fla.-based Darden Restaurants Inc.
Yet despite nearly $3 billion in annual sales, Chick-Fil-A is unlikely to unleash a wave of new locations in the Chicago area, where Oak Brook-based McDonald’s Corp. already has about 500 restaurants. Instead, privately held Chick-Fil-A typically takes a cautious approach to expansion. After entering California in 2004 with eight restaurants, the company now has just 32 locations in the entire state.
“We’re not trying to meet Wall Street’s expectations, and we’re not trying to attract franchisees because we don’t grow through franchise capital,” says John Featherston, senior director of real estate for Chick-Fil-A.
He says the company hasn’t decided on its strategy in the Chicago area, but points to the firm’s track record in California and in Arizona, where the company has just 23 restaurants after entering the Phoenix and Tucson markets in 2004.
Chick-Fil-A, with 1,435 locations nationwide, plans to open just 64 freestanding stores in 2009, the company said April 21. The company plans an additional dozen restaurants in malls and other locations, such as college campuses.
In Aurora, Chick-Fil-A would buy a former Smokey Bones restaurant at 4435 Fox Valley Center Drive, Mr. Featherston confirms. That structure would be demolished to make way for a 4,000-square-foot restaurant, according to BidClerk.com, a Web site that tracks construction projects.
Chick-Fil-A, which is advised by Oak Brook-based Mid-America Real Estate Corp., will look at suburban sites before turning its attention to the city itself, Mr. Featherston says.
Chick-Fil-A’s story is a classic tale of an entrepreneur. Founder and Chairman S. Truett Cathy opened his first Chick-Fil-A restaurant in an Atlanta mall in 1967, focusing on boneless chicken sandwiches because they outsold hamburgers in his first restaurant, a tiny 24-hour grill called the Dwarf House diner. In 2008, Chick-Fil-A’s sales increased 12.17% to $2.96 billion, compared to 2007.
Darden’s broker, Mr. Caruana, who was with Schaumburg-based real estate firm Owen Wagener & Co. when he began marketing the Aurora property, has since joined Cushman & Wakefield Inc., where he is a director.
The asking price for the Smokey Bones site was $1.6 million, according to Mr. Caruana, who declined to comment on the purchase price.
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