Church’s Texas Chicken CEO Joe Guith acknowledges there’s been an industry-wide shift in recent years to take as much of the business outside the dining room as possible. It wasn’t a departure at Church’s. “That’s who we are, not where we’re going,” he says.

This compass—“who we are”—has served as the central theme in the 72-year-old brand’s turnaround since Guith, a former GoTo Foods (then Focus Brands) executive, arrived in early August 2022. Church’s was founded in 1952 in San Antonio, Texas, by George W. Church. It was a walk-up stand located a block south of the Alamo that sold two pieces of chicken and a roll for 49 cents. It began as “Church’s Fried Chicken-To-Go.”

“That’s what we were—that’s who we are,” Guith reiterates.

Later this year, Church’s will introduce a 1,000-square-foot prototype (about 700 smaller than the traditional build) with new equipment designed around efficiency and throughput, as well as multiple points of ordering. There will be some seating—likely somewhere between five and eight—but the core focus will flow through convenient channels of trade.

That restaurant, however, is merely one piece of a larger story unfolding at Church’s today, which, again, gets back to Guith’s point.

At the QSR Evolution Conference last September in Atlanta, somebody got up during a session with Guith and mentioned he wasn’t familiar with the brand as a customer. “What are you going to do to get me?” he asked.

Guith’s answer: “Not a whole lot.”

Ever since he accepted the role, Guith recognized Church’s brand equity and execution were pulling in different directions. People knew Church’s and revered what it stood for. But what it stood for and what it was actually doing didn’t line up. Namely, this pulsed across two points: value—Church’s had started to skew premium and chase competition; and its footprint. “George Church envisioned serving the underserved the best chicken at the best value,” Guith says. “So we’re just getting back to those principles. We were off them.”

Guith’s tenure began by working through many of the granular details. In 2023, results started to surface.

Church’s, in a lot of respects, is a tale of two cities as a brand. The international arm (Texas Chicken) opened 70 new locations last year in 15 markets across Canada, Mexico, Central America, the Caribbean, Middle East, and Asia Pacific. The brand inked deals in Asia, the Caribbean, and Middle East, and is poised to scale internationally by more than 50 percent over the next five years. Currently, there are about 700 units outside the U.S. Guith says the number should cross 800 in 2024.

And that’s not a paper pipeline, either, he points out. Eighty percent of the brand’s expansion is stemming from existing franchisees.

Guith says a running theme of that success was a focus on unit-level profitability. In many prior cases, the company didn’t know what that was outside of its corporate locations. “Now, we do,” he says, “both in the U.S. and around the world. And I think that’s generated the faith around the pipeline internationally.” Texas Chicken found success in markets like Vietnam and Qatar where it can enter as a challenger brand and showcase its differentiators. There are partners there, Guith says, who have signed up to “double and triple their unit counts.”

Recent financial growth also anchored another development for Church’s. The brand surpassed $1 million average-unit volumes in the U.S. for the first time in 2023, Guith says. Additionally, it posted a threefold increase in the number of domestic new deal signings compared to the previous year.

Church’s in 2022 trimmed its U.S. unit count by 91 locations, exiting the year at 812 total restaurants (654 franchised and 158 corporate). The store figure decreased by 13 in 2021 and 27 in 2020.

Guith says the goal is to get back to a 2–3 percent net unit growth run rate, but that will take “a few years.” Development generally doesn’t turn as fast as comp sales. “But with unit-level profitability skyrocketing like it did over the last year, with our AUV growth, and our work on supply chain and delivering better margins, we will see an acceleration in that,” Guith says. “And we’re looking to take that number up another, call it 20–50 percent on top of that.”

Ultimately, he adds, Church’s believes it will have enough commitments to return to positive restaurant growth within the next 18–24 months. By 2028, the company also projects to lift system sales from $1.5 billion to more than $2 billion.

Guith’s confidence in Church’s path isn’t built on well-wishes. He says there’s north of 100 units today doing the volumes the company projects in the marketplace (above $1 million). “So this is not a stretch by any means,” he says.

And returning to how Church’s became sidetracked, Guith says the first task was to update and reignite the brand versus reintroduce it. It was about making Church’s more relevant for the guest who already loved it. Improve layouts, efficiencies, fix the construct so Church’s wasn’t simply putting “the old in the new,” as Guith refers to it.

“People loved us for this, and somehow we got away from it and it undermined our economics,” he says, “and, quite frankly, our execution. And when you’re undermining the economics, you look at the investment and it just starts rolling downhill, which is what was happening with this brand.”

“It takes a good bit of effort,” Guith continues, “but the team has been able to reverse that trend. We’re now investing in those units and getting back to who we are as a brand.”

The result, from a tangible perspective, is Church’s has become more nimble. Instead of asking operators to spend $1.5 million to build a restaurant that generates $1 million, it’s giving them the option to drop $800,000 on one that pushes $1.2 million, or $1.3 million.

“This isn’t crazy talk,” Guith says. “And we’ll have those things in our FDD. But those numbers are very different in terms of the investment in the sales-to-investment ratio. We completely rectified that.”

What Church’s needs to do now, he says, is put more proof points in the market. That’s exactly what’s on deck in 2024 with the new prototype. But also, the brand has remodeled more than 100 restaurants since it debuted a contemporary “Blaze” concept in 2022. Another 400 remodels are expected over the coming three years in the U.S. Guith says Church’s will invest on the corporate-store side along with franchisees.

“And we’re not seeing what you would normally see out there,” he says of remodels, not able to divulge exact metrics due to the brand’s private holding. “… You’re seeing twice the impact you would normally see, or I’ve seen, with other brands.”

This owes to two factors as well: One, it shows how far Church’s was behind in terms of investing in assets. It let those go too long. Secondly, though, it’s another sign of the chain’s equity.

“People really want to see us show up,” Guith says. “And when those things come together, similar with what’s happening in the push for value and us getting back to being the value players, you’re seeing these outsized effects and results. Now, it’s our job to continue to build that pipeline, to push toward positive unit growth in the U.S., which is something we haven’t been in decades.

“That looks to be in range now.”

Expounding on value, this is a tick at Church’s that can’t be understated. Guith shares an anecdote where he recently ordered from another quick-serve and the bill ran $50 for two people. Church’s can feed a family still for $20, he says.

“And by the way, we will make really good money on that, and we know it,” Guith explains. “That is not some crazy 50 percent food cost, trust me franchisee, you’ll make money [promise]. No, you will make money. And our corporate stores and our corporate profitability is up double-digits. And now it’s double-digits on double-digits.”

Church’s got right to work in Guith’s early days rethinking pricing and menu architecture. This continues, with innovations ahead not just in regard to what’s offered product-wise, but the layout and presentation as well. The brand overall, however, has been “extremely conservative” on price, Guith says. “Way, way below the industry,” he says. “And we’ve seen it. I’ve talked to a number of people in the industry and we had very meaningful traffic growth both toward the end of last year and well into this year.”

Ordering online from a North Carolina restaurant, 16 pieces of chicken at Church’s costs $20.99. Add in three large sides and eight Honey-Butter biscuits and it comes in at $34.99. A six-piece shrimp basket is $4.99. Three different seafood (Lenten season) LTO combos currently are under $10. So is the classic 2-Piece Combo. A Chicken Sandwich combo is $7.99.

It’s a clear picture.

But to Guith’s earlier comment, it had grayed. The brand needed to bring value back to center and feels there’s upside in accelerating further, Guith says. “There are several more iterations that we have coming around menu innovation that will just double down on that,” he says. “And so we feel very good at where we’re positioned. Our competition is publicly traded, so we see where our numbers at and where their traffic is and we’re winning the battle.”

Guith can’t delve into too many specifics about what’s launching to Church’s menu. The chain made an appearance on Hulu’s documentary series “Superhot: The Spicy World of Pepper People.” Featured in episodes 8 and 9, Church’s Chefs Kevin Houston and Eric Stein were joined by executive leaders to “put have pepper growers to the test and help inspire a signature hot sauce.” That end product is slated to launch in mid-April or so.

This is a bigger deal than it might appear at first glance, Guith says. Church’s handed out some 70 million hot sauce packets last year. None of them were Church’s branded. “There was an insight right there … it’s not getting away from our core by any stretch. It’s saying, how do I become more relevant in my core because, clearly, people like spicy.”

Church’s will also introduce a new version of its spicy chicken over the course of the next three or four months. The product will taste better, Guith says. It will be easier to execute, too.

“We’re finding these double wins, if you will,” he says. “Double and triple wins where it’s like, ‘oh, it tastes better and it’s easier to execute?’ Those are powerful combinations.”

Guith hints Church has “probably 10 more examples” of such changes coming in the next year, year and a half.

Along the way, new Church’s builds will keep dropping in. There are straight walk-up and older versions where customers pickup, but do so inside. Then, the upcoming 1,000-square-footer as well as the more traditional restaurant that’s gained momentum of late, too, Guith says, especially when it’s remodeled to Blaze. The company engaged in an operations study for the first time in a while where it looked at flow and optimized in response. It implemented third-party audits and increased the number of eyes on restaurants (people coming in-store and measuring the state of standards and guest sentiment) by 7X, year-over-year. Church’s switched guest feedback platforms about a month ago and continues to bring more metrics to franchisees to show where the line is headed, and what it takes to get there. “We’re seeing that movement, but again, we’re still maybe less than a year into that journey,” Guith says of the turnaround.

Church’s app, simply, wasn’t working a year ago. It’s been improved and loyalty is coming in 2024 with a custom skin and CRM platform that’s going to be more robust than the company has enjoyed. “I can’t imagine a better time to be getting this done, especially with our guest profile, which tends to be on a lower-income,” Guith says. “So that’s very important to them. As we’ve continued to focus on that and make that part of our repertoire, we’re seeing the benefits.”