Dive Brief:
- Chicken Salad Chick is acquiring Piece of Cake, which will allow the chain to expand its dessert menu, according to a Wednesday press release.
- The terms of the acquisition were not disclosed. Piece of Cake has 10 units in the Atlanta region, which will continue to operate as normal.
- Following the completion of the acquisition, Chicken Salad Chick will test the cakes across some of its units, with the goal of serving cake for dessert from all of the brands’ 245 units in 18 states.
Dive Insight:
Chicken Salad Chick’s menu is fairly limited, confined largely to chicken salad and dishes that include chicken salad as a major component, save for a few children’s meals and a dessert cookie. According to the brand’s franchise disclosure document, its core menu is “chicken salads, pimento cheese and side salads individually or in pound quantities.”
The addition of cakes to this menu could help Chicken Salad Chick compete with fast casual brands with broader menus, like Panera, which serves a range of pastries alongside its soups, sandwiches and salads, or Sweetgreen, which has been testing desserts and a greater emphasis on the dinner daypart. A broader menu could boost sales in non-lunch dayparts.
Chicken Salad Chick locations have an AUV of around $1.4 million, a section of its FDD notes, and the brand requires units to be open for at least seven hours a day, six days a week.
After adding 24 stores (20 net new units) in 2022, Chicken Salad Chick has set a goal of 35 new stores (14% unit growth) in 2023, as part of a plan to eventually reach 500 units. Its current units are spread across 18 states, primarily in the South and the Midwest along the Ohio River, which could make the task of supplying its units with hand-frosted cakes challenging.
Chicken Salad Chick did not immediately respond to a request for comment about the challenges of supplying its stores with cakes, or whether individual units would bake cakes fresh. The company did say, in the release announcing the acquisition, that the national expansion of its dessert category was conditioned on successful market testing.
Piece of Cake Founder and CEO Melissa Jernigan will remain with the company after the completion of the transaction, per the press release.
