Regional Chicken Chain Thrives On Small-town Values

When QSRweb.com asked the question earlier this week "Are QSRs overusing sex as an advertising vehicle?", it caught the attention of small, regional chain Golden Chick.

Mark Parmerlee, chairman of the board of Golden Southern Chicken Corp., franchisor of Dallas-based Golden Chick, said while such advertising can work with the right audience, using sexual-themed advertising "just wouldn't fit for us." Golden Chick operates 85 locations "" many of them in small towns "" in Texas and Oklahoma.

The key to any good advertising campaign, of course, is to know your target audience. And Golden Chick certainly seems to understand its customer: families.

The chain's local broadcast advertising illustrates that understanding by depicting families' everyday lives while focusing on Golden Chick's convenience and value.

"It's important that chains know who their core customer is, and they need to be true to them," Parmerlee said. "We have people of all ages who dine at our restaurants, who do takeout and even delivery. But again, to me, it's all about the core customer or what the objective is on a particular product." The company, which operates mostly franchised locations, creates the broadcast spots as well as print advertising. Its franchisee advertising cooperatives then fund the fees for each market.

Golden Chick's advertising extends into local store marketing, which includes sponsoring local sports teams and offering school rewards programs. For stores in large cities, the restaurant focuses on the neighborhood in which it operates. Being involved in the community is important to the company and is something it encourages of its franchisees as well.

Value messaging Focusing on the chain's value and convenience has paid off in several ways for the company. While other quick-service brands, from Jack in the Box to Carl's Jr. and Hardee's have struggled with falling same-store sales, Golden Chick has done well in the downturn.

"We feel like we've benefited from trade-down in the market," Parmerlee said. "A family still has the need for convenience but may not want to spend the money to go to a full-service restaurant." To attract those consumers, Golden Chick has stepped up its advertising, focusing on value, quality and service, which has paid off.

The leaders in the chicken segment may also have benefitted from the consumers trading down, with KFC and Popeyes both reporting improved comps recently. KFC credits its grilled chicken line, while Popeyes said it gained from discounting and boosting its national advertising.

Parmerlee said Golden Chick holds its own against the large chicken chains, which also includes Church's Chicken. Church's has 99 stores "" 14 more than Golden Chick's total "" in the Dallas market alone. Popeyes has 15 stores in the Dallas and Houston markets.

"We're never afraid to mix it up with the big guys," he said. "We feel that our food quality and variety in fact are enough to separate us from the pack." The chain, known as the originator of the ubiquitous chicken tender, is known for the size of chicken pieces. It also offers a variety of side items.

"We try to provide a high quality meal with some options and with variety for the family," Parmarlee said. "And we try to provide something that's convenient and at good value although not necessarily at the lowest price." Parmalee said the chain's portion sizes offer a good value proposition, so Golden Chick can focus on that without the need for deep discounts. Instead, it continues to feature its everyday combo family meals as well as special offers on a calendar basis.

"We focus more on quality than we do on price," he said. "Some other chains often when all else fails will default by discounting their product. We don't really feel the need to do that." Growth plans, domestic and abroad Parmarlee did not provide sales figures but said its recent success is speeding up its growth process.

The company normally adds about six franchised stores a year. Next year, the store has 10 units in the pipeline, he said.

Golden Chick's sales growth also attracted an investor who plans to expand the chain to 10 countries in Asia, including China.

Foodservice consultants Allen Tharpe and Associates purchased a minority interest in the company in December, which includes the master license rights to develop the Golden Chick brand throughout Asia.

Tharp said in a news release about the agreement that he was attracted to the Golden Chick concept because of its continued double-digit, same-store sales growth during what has been a down cycle for most restaurant chains.

"This deal is a tremendous opportunity to bring a great concept like Golden to the exciting and fast growing economies of Asia," Tharp said.

Parmerlee said Tharp's proven track record, which includes developing other brands in Asia, allowed to company to consider international growth.

"For a regional company like us to make a big leap, we wouldn't do it with just anyone," he said. "That takes somebody with real qualifications and background. He has the resources, including an experienced management team to make things happen for us over there." The contract calls for the development of more than 100 units over the next 15 years.

"We start slow, and success begets success in Asia just like anywhere else," Parmerlee said. "It could take off very rapidly or be like our chain has been, which has been under controlled, concentric growth."

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