The Coca-Cola Upcharge Scheme That Led To Chick-Fil-A
"We're joining new communities nearly every week," claims the Chick-fil-A website. That's quite an accolade, even if someone could consider it a little arrogant for the company to boast about it. Chick-fil-A also goes on to explain that the restaurant chain has locations in 47 U.S. states, so clearly it is embedded in many American neighborhoods.
With such a wide presence in communities across the country (Chick-fil-A operates more than 2,600 locations in the U.S., per its website), the company carries out various methods of giving back to local people. In accordance with its giving philosophy, the restaurant chain benefits communities by redistributing unwanted food, boosting education initiatives, and donating millions of dollars to community groups.
Given Chick-fil-A's stated focus on helping communities, you might not expect that long before the restaurant existed, its founder, S. Truett Cathy, started his path to business success by getting people to pay more for a product than they needed to. It happened through a simple little scheme that didn't involve chicken but rather selling Coca-Cola.
Cathy started making money by selling Coca-Cola bottles
S. Truett Cathy was clearly born with a business instinct. The Chick-fil-A website explains that he worked from an early age to help his mother prepare meals, and took on a paper route to pay for the family's groceries. But, according to Tampa Bay Times, Cathy's first entrepreneurial success came at the age of 8 when he started selling Coca-Cola.
In fact, it was a little bit of a scam, because Cathy would buy six Coca-Cola's for 25 cents and re-sell them for 5 cents each – thus realizing a 5-cent profit (or an impressive 20%). Eventually, Cathy's Coca-Cola scheme raised enough money that he could flag down passing Coca-Cola trucks and purchase full cases of 24 bottles for 80 cents, explains Smart Business. This netted the eight-year-old an impressive 50% profit per case of 40 cents. Those endeavors helped shape him into a future businessman.
Cathy and his brother started their first restaurant in 1946. This in turn generated money to open the first Chick-fil-A in 1967 (per Chick-fil-A). As high as Cathy's Coca-Cola profit margins were, Chick-fil-A trumps them. According to Franchise Times, Chick-fil-A's profits in 2021 were 67.3% higher than in 2020, the equivalent of $1.2 billion in growth.