The CFO dishing up data for restaurant expansion

“You have leaks, you have power outages, you have trucks that don’t show up, you have employees that don’t show up, you have technology that breaks. But your customers don’t know that. Every day you open the doors, and the customers want to come in and have a great experience, and so whatever challenges you’re having, you have to find a way to get through them,” CFO Drew Travis told CFO Brew.

On top of that: “It is a highly saturated market. There are endless amounts of choices for restaurants. There is a very low barrier to entry,” he added.

Welcome to the restaurant business! Travis joined fast-casual chain Chicken Salad Chick this summer, but he’s been in this challenging, fast-paced restaurant industry long enough to see what works and what doesn’t. (As well as why people stay: “Once you get in, it kind of hooks you and has a hold on you.”)

Travis has joined at an “inflection point” for Chicken Salad Chick, “with the growth trajectory [it’s] on,” he said. Founded in 2008, with roughly 350 locations and serving “Southern-style chicken salad made from scratch,” the chain has doubled in size in the past five to six years.

“What makes certain organizations successful or unsuccessful around this time in their lifecycle is not just how fast you grow, but who you grow with, who you partner with, and how you grow,” he said. Travis told us how he makes some of those choices.

Cost trends. Along with just about everyone else, restaurant operators like Chicken Salad Chick have endured a surge in operating costs. The National Restaurant Association estimated that restaurant expenses increased an average 36% between 2019 and 2026, which “puts continued pressure on margins,” the association noted.

Higher prices in areas like fast food means that there’s “less competition on price alone” between restaurants, Travis said. Chicken Salad Chick won’t sacrifice food quality to cut costs, which is a “slippery slope for restaurants” since customers will notice, he said. Instead, it’s focused on installing efficient processes and technology so that franchisees aren’t “wasting or spending extra dollars that could be going to their bottom line.”

“It’s just trying to set them up for success because there’s just going to be economic factors that are outside of our control at some points,” he said.

High risk. Chicken Salad Chick is now in 27 states, and “we’ve always set targets of opening 40 to 50 stores a year,” Travis said.

But without the right information, franchise businesses can fall into the trap of incentivizing the “wrong partnerships” or moving into the wrong markets, Travis said. And the stakes are high with expansions, since real-estate decisions are long term—commitments can last up to 20 years, and it can be “cost prohibitive” to relocate, he noted.

As CFO, Travis said he works closely with other functions like marketing, real estate, and supply chain management to equip them with the right information.

“I think a great finance leader is a great partner across the organization…My job is to help my fellow leaders in the organization make better decisions, make data-driven decisions, and [make] sure that as we grow, we’re growing in a very smart, methodical way with the right partners and the right markets,” he said.

Data hungry. In recent years, Chicken Salad Chick has invested heavily in data, “both on the marketing side and on the real-estate development side,” according to Travis. That data, he added, “gives the company “a much better understanding who our customer is.”

It also shows where Chicken Salad Chick’s locations perform best: near schools and hospitals or down the street from specific grocery stores or home-goods stores.

Those variables help Chicken Salad Chick decide how many seats to put in a dining room or whether a new location should be free-standing or an end cap of a larger retail building.

“The answer” to these questions, Travis said, “is always ‘it depends.’ It depends on the market; it depends on a lot of that other data, the customer data…Marrying those two datasets and merging them together to form that view is really important for us to make good decisions.”

Because of this data-driven approach, Chicken Salad Chick made its big entry into New York state by bypassing Manhattan. Yes, you heard that right. It’s starting in Upper New York in places like Albany and Buffalo, “because we’ve done a lot of research and understanding that the customer in that area is very similar to the customer in a lot of other markets where we have success,” Travis said.