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Chick-fil-A expands to 'most unforgiving restaurant market'

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Courtesy of Chick-fil-A/Business Wire/File

(Read caption) Chick-fil-A's signature chicken sandwich meal. The chain will open its first New York location on Saturday.

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While McDonald’s is closing more stores than it’s opening this year for the first time in over 40 years and KFC’s parent company Yum! Brands Inc. is down nearly $17 per share from its peak in May, Chick-fil-A has 20 store openings planned over the next two months, most notably the company’s first full-service location in New York City.

On Saturday, the Georgia-founded company will open a location right in the heart of what The New York Times describes as “one of the toughest and most unforgiving restaurant markets in the country.”

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Though the company operates a branch inside the food court at New York University, the new restaurant coming to Avenue of the Americas will offer the full menu and be the first location open to the general public in the state.

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This particular store opening signals the company’s continued growth and formidability in pushing the brand into regions where it is not well established.

Many New Yorkers have never heard of the restaurant chain, which could pose a considerable challenge for Chick-fil-A. In fact, the company reported that “more than three-fourths of the 160 people hired to staff the Manhattan location” were unfamiliar with the brand, according to The New York Times.

Of course that unfamiliarity could also be considered a plus for the chain in a city that largely supports gay rights. Chick-fil-A CEO Dan Cathy has made no secret of his opposition to gay marriage – a stance that cost the chain a chance to enter the market in the city of Boston in 2012.

But its failure in Boston aside, Chick-fil-A is growing apace. The quick-service chicken chain, which is still “privately held and family owned,” reported nearly $6 billion in sales in 2014, according to the company website.

“On the surface, Chick-fil-A pales in comparison to its competitors: it has only 1,700 stores, a small handful compared to KFC’s [4,370 stores], and because it’s a private company its financials are undisclosed, making it impossible to know precisely its earnings,” reported Time Magazine.

But a report done by Janney Capital Markets in 2014 estimates that Chick-fil-A posts an average annual growth rate of 12.7 percent. Chick-fil-A gained the greatest percentage of market share for chicken-focused fast food in 2012 and has held it since.

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Chick-fil-A’s success can be partially attributed to quick adaptation to the health food trend that has pushed quick-service restaurants to appeal to younger generations who are increasingly making food choices based on health and environmental benefits.

In 2014, Chick-Fil-A announced its plan to go completely antibiotic-free by 2019. Their extensive plan, in coordination with the United States Department of Agriculture, will require suppliers to “meet the commitment of no antibiotics ever,” which includes antibiotics used in food, water, or vaccines administered to chickens.

They also moved away from the use of high fructose corn syrup in their buns and artificial dyes in their sauces and dressings, reported Natural News.

Regardless of menu changes, the brand has been able to position itself as a stand-out compared to fast food chains typically categorized as greasy and fattening.

“The product is very simple, a breaded chicken breast, but they somehow manage to convey with the cleanliness of their stores and their service that the quality is somehow higher, not health food but healthier than most fast food,” restaurant consultant Aaron Allen told The New York Times.