In down times, Chick-fil-A sales, growth are up

If all that weren't enough to make competitors' mouths water, Chick-fil-A is on track to be completely debt-free -- something unheard of for a company of its size -- within the next 36 months.

So what's the secret?

"Get a good CEO," company founder and CEO S. Truett Cathy, 88, joked Friday, slipping from his characteristic humility for just a moment during an interview. He and son Dan, the company's president, were in Washington on Friday for a speech at the National Press Club.

Just as quickly, Truett and Dan Cathy returned to their mantra about what really makes their company and its nearly 1,500 stores in 38 states work.

First, it's the food, the father-and-son management team said. But it's also the people who serve it -- and how they serve it -- they said.

The company just rolled out a new customer service program it calls "second-mile service." Like much at the company, one of the country's most religiously oriented, it's based on Scripture.

"Jesus said, ‘If someone asks you to go one mile, go with him a second mile,' " Dan Cathy, 56, explained. "We put that under a microscope and found that there are just tremendous opportunities -- particularly in this economy -- to treat our customers with honor, dignity and respect."

The service improvements can be subtle, such as fresh flowers and fresh pepper grinders on every table. Employees are trained to pull out chairs to seat female guests. When it rains, they're supposed to run out and greet customers with an umbrella. And every thank-you is supposed to be answered with "My pleasure."

"They've always been really customer-centric," said Darren Tristano, executive vice president of Technomic, a Chicago-based restaurant consulting firm. "They try to provide high-quality service to match the quality of the food, and I have to say, the reviews they get are fantastic."

The result, Tristano said, is Chick-fil-A's trend-bucking growth. He predicts sales across the rest of the restaurant industry to be flat or down for this year.

The two Cathys say the key to customer service is finding the right employees, partners and "operators" -- Chick-fil-A's version of franchisees -- to begin with.

Last year, the company got 22,000 applications from aspiring store operators, who pay just $5,000 in upfront fees and split profits 50-50 with the company. Of those, the company selected only 100.

According to Truett Cathy, store operators are typically "family men" with track records of responsibility and good decision-making.

"We're seeking people with character rather than experience," he said. "If you can't manage your own life, how do you expect to manage a business?"

Joe Emma became a Chick-fil-A operator 16 years ago after retiring from the military.

Emma says what persuaded him to buy his Chick-fil-A location in Fair Oaks, Va., was not just the earnings potential, but his belief in the company's business philosophies.

"I've tried to lead a life of leadership," he said. "And I learned in the military a long time ago that whatever goals you make are carried on the shoulders of your people. That's the same thing they believe at Chick-fil-A."

Forty-two years after opening his first Chick-fil-A in a metro Atlanta shopping mall, Truett Cathy says one of his remaining goals is for his company to be debt-free, which he says will likely happen within three years.

"It's something I've been preaching for years," he said. "Businesses' No. 1 problem is debt. I can handle every problem except debt."