'We are exceeding targets by over 25 percent'

Following the Mrs. Winner's-to-Church's conversion, Gary Marstall eyes growth [From our print edition featured in Monday's City Paper]

Email | Print By William Williams

Gary Marstall

Gary Marstall is the Nashville Area zone director of Church’s Chicken, which began as one family-owned location in 1952 and is now located in 33 states and 22 countries (with system sales of an estimated $1.2 billion). Recently, Church’s — which is owned by private-equity firm Friedman Fleischer & Lowe — expanded into Middle Tennessee and Southern Kentucky by buying 23 former Mrs. Winner’s.

Post correspondent William Williams and Marstall sat down to talk about the fast-food industry and the challenges and opportunities facing Church’s Chicken.

This is the largest expansion in company history. Why now and why Nashville?

Nashville is a market with tremendous potential. Our research indicates an unmet demand for high-quality affordable chicken offerings. Church’s is open to growth and growth opportunities. Nashville is definitely a growth opportunity. As it is unfolding now, the effort is exceeding expectations in a highly positive manner.

You’ve overhauled the interiors and exteriors of the former Mrs. Winner’s buildings. What has that entailed and can you provide a cost?

We are upgrading the facilities to incorporate our color schemes and images. It is important to leverage the look of the brand as well as what the brand has become in the eyes of the consumer. We are enhancing the facilities to meet Church’s high operating standards to consistently produce a quality product with corresponding service and cleanliness that showcases our powerful brand.

We have allocated a little over $100,000 for each facility to upgrade the facilities, with the need varying by location. So far, our efforts have been well received by our guests as well as the communities in which we have entered. Our vibrant and inviting colors have been warmly embraced.

From a personnel perspective, did you keep many Mrs. Winner’s employees?

I’m happy to say that 95 percent of Mrs. Winner’s former employees stayed with us and that additional positions were created to meet the expected demand.

Of the national fast food chicken-oriented chains, Church’s is best known for offering “hot chicken.” What is the marketing significance of that?

We offer two flavors of bone-in: original and spicy. We launched this new flavor a few years ago to provide another option to our customers and it has become a very important part of our menu. We do brand both of the original and hot and spicy chicken. We bring both of those player profiles. You’ll actually see some television media advertising it. It’s about the marinating. The spice is in the breading, skin and meat. We encourage customers to buy a pepper pack. We’re emphasizing this in Nashville.

In some markets, Church’s is co-franchised with the White Castle Hamburger chain. What is the relationship of the two entities in the Nashville market?

White Castle has done a great job in representing the Church’s brand, and we’re thrilled to join them in the market and expand our presence in the greater Nashville area.

Regarding both costs and logistical perspectives, what have been the main challenges to your Nashville market effort?

The main challenge has been to leverage all the advantages we have throughout the country in our current supply chain and have those same advantages here in Nashville. Now that the supply chain is set up, we want to ensure it continues to meet capacity needs and cost assumptions.

In the Nashville market, who is Church’s main fast-food competitor and why?

Clearly in the chicken segment of QSR (quick-service restaurant), our main competitor is KFC. However, Church’s takes a broader view in that market share is available to all players in the QSR arena as everyone is competing for the disposable food dollar. And of course, McDonald’s is a formidable competitor for everyone.

Can you provide any financials?

At this time, we cannot share specifics, but we looked at targeted sales retention as well as the targeted brand growth projections and we are positively exceeding all targets at all units by over 25 percent. We are definitively off to a very good start and we are validating several of our assumptions.

This is a big investment for Church’s not only in size but scope as we look at the inclusion of the breakfast timeframe and the potential it may hold for the rest of the system. We have added the breakfast time frame in all of the Church’s locations in Nashville, which will allow great financial perspective and insight as to what the future may hold for other avenues of growth.

There are several reasons to be very excited about this acquisition and the performance of the market to date and this absolutely includes the financial side as well as all the possibilities.

There have been various instance lately of negative publicity about the fast-food business. Do you feel your industry has been unfairly maligned by animal rights groups and in films such as Super Size Me, Fast Food Nation and Food Inc.?

Our primary goal is to meet the needs of our customers. Through extensive research, we’ve found that customers love our food and feel good about serving it to their families. We will continue to offer freshly prepared products made with high-quality ingredients at the best value. Everybody needs to have some balance in their perspective.