Everything You Need To Know About Zaxby's Fried Chicken

Since opening the doors of its first restaurant in 1990 in Statesboro, Georgia, Zaxby's has become a nationally recognized player in the fast-casual restaurant industry. There are more than 900 U.S. locations serving fried chicken fingers and wings. And though Zaxby's is primarily in the Southeast, it has more than made the most of its domain. As of 2021, QSR ranked Zaxby's the No. 24 overall quick-service restaurant franchise in America and No. 5 in the chicken segment, behind only Chick-fil-A, KFC, Popeyes Louisiana Kitchen, and Wingstop.

Today, we're looking at the behind-the-scenes story of Zaxby's and how it has prospered for more than 30 years and counting. Even with the chain's success, some of the most fascinating things about the company are the least known. Where did the idea come from? How has Zaxby's risen in the crowded chicken market to post annual sales of more than $2 billion? And why does the chain add Z's to so many food names? We've answered those questions and many others — complete with sides of dipping sauce.

Before Zach McLeroy and Tony Townley founded Zaxby's, they were childhood friends. McLeroy recalled to The Atlanta Journal-Constitution that they met each other in fifth grade and spent their formative years in Oconee County, Georgia. And supposedly, they got the idea for Zaxby's during a game of basketball. McLeroy and Townley both thought the chicken options available nearby were lacking — both in taste and personality. They decided on the court that, instead of waiting for someone else to come up with a better chicken restaurant, they could do it themselves.

However, the seed had been planted before that fateful pick-up game. One of the ways McLeroy paid for his college degree at the University of Georgia was by working at restaurants near the campus, and he came to enjoy serving others. Townley, meanwhile went to Georgia Southern in Statesboro — and the first Zaxby's location would ultimately be near the campus of his alma mater. They agreed McLeroy would focus on the food aspect, while Townley would put knowledge from his mortgage job to work running the business side.

Although this story of two lifelong friends going into business together sounds like a fairy tale, there is a bit of a dark side to it — specifically, that Zaxby's might have ripped off another joint. In 2014, cofounder Zach McLeroy told The Atlanta Journal-Constitution that while attending the University of Georgia in Athens, he had seen how successful Guthrie's was with fellow students.

But it turns out it was more than just a view from afar. Joe Kelly Guthrie, the son of founder Hal Guthrie, later told Franchise Times that McLeroy worked for Guthrie's in 1987. For that matter, so did the founder of Raising Cane's. According to Guthrie, his family pioneered the concept of a restaurant focused on chicken fingers and sauce, and everyone else is a copycat.

For what it's worth, Guthrie added that he doesn't mind the copycats and that the competition makes everyone better. But it's clear who the leader in the chicken finger clubhouse is. As of early 2023, Zaxby's has 925 locations, while Guthrie's only lists 50 restaurants.

There are many stories of people mortgaging homes or selling prized possessions to fund a business venture. In the case of Zaxby's, co-founder Zach McLeroy gave up on his dream of being a rock star to pursue his new dream of having a successful chicken restaurant. McLeroy sold his prized drum set to help come up with his half of the $16,000 they needed to open the first Zaxby's location in 1990. (The restaurant was known initially as Zax.) As he later told Franchise Times, "I gave up one set of drumsticks for another."

The duo also relied on a fortunate connection to get up and running. The Bullock County Bank president also happened to be best friends with Tony Townley's mother-in-law. That was enough to secure a loan to purchase a building — with a combined mortgage and land payment of $1,000 per month. And although McLeroy went years without drumming because of how much time the business needed, as of 2015, he had finally purchased a new set to play for fun.

The restaurant industry is tough to succeed in. One study published in Cornell Hospitality Quarterly found that 26% of restaurants don't last a year, and anywhere from 57 to 61% go under within three years. However, Zach McLeroy says Zaxby's was profitable right away (via The Atlanta Journal-Constitution). The restaurant did $350,000 of sales the first year, and even paying himself only $10 an hour, McLeroy personally made $50,000 — which equates to working around 96 hours a week. Since the advertising budget was limited, Zaxby's did a lot of "guerilla marketing" and specials to raise awareness.

From there, Zaxby's began expanding. The chain initially stuck to locations in other college towns but changed its tune after a business district restaurant went just as well. Then, in 1994, McLeroy and Townley followed customer suggestions and started franchising the brand, which meant opening a corporate headquarters in Athens, Georgia. After a decade in business, Zaxby's had 100 total stores, with 80 of them franchised. And the chain took those new restaurants seriously, putting so much capital into them that it sometimes needed bank loans to pay the taxes.

How is it that so many people were, and still are, drawn to Zaxby's? Industry insiders and reporters say it's because the chain goes out of its way to stand apart from the competition. Food writer Larry Olmsted once opined that, by largely sticking to chicken fingers and chicken wings, Zaxby's had found a "middle ground" between burgers and classic fried chicken (via USA Today). And while it's undeniably a fast food restaurant complete with ordering counters and drive-thrus, the interior of Zaxby's has more of a homey, sit-down vibe. The décor even varies from location to location with items unique to the area.

Zaxby's prefers not to make drastic changes or constantly reinvent the menu, instead concentrating on what it already does well. Even on the occasions it does step outside its niche, the chain comes up smelling like roses, having been much more successful than other fast food restaurants at introducing salads. The results have been so positive that even industry titans like KFC have made changes so they can adapt and try to recapture their lost market share.

In addition to the chicken itself, Zaxby's dipping sauces have a loyal following. The signature (and trademarked) Zax Sauce has always been on the menu — and it's a fast food mystery on the level of Coca-Cola or KFC's 11 herbs and spices. Zach McLeroy made and distributed every batch himself until there were too many locations to keep on. When switching to large-scale manufacturing, McLeroy split up the process to keep it a secret. According to Zaxby's, even the executive chef doesn't have the full recipe.

But that's not the only sauce you can get. The Zaxby's menu has a dozen sauces, including other in-house creations like Nuclear, Wimpy, and Buffalo Garlic Blaze. In late 2022, the chain even announced a limited run of free "saucesicles" in partnership with Frios, which infused either Zax Sauce or Tongue Torch into popsicles.

Of course, we must also talk about the Z's that Zaxby's adds to items like Fingerz, Zalads, and Rewardz. The company even addresses this practice on its website. Although the origins are unknown, there's officially one question behind each Z: "Will it make someone look twice and smile?"

If any business is successful, it's seemingly only a matter of time before it grows beyond its home turn. After sticking to the Southeast for more than two decades, Zaxby's started growing its horizons in 2013. And not just to a neighboring state, either — the chain's first non-Southeast location was in Utah. The following year, Zaxby's came to Oklahoma with a Tulsa franchise. As of 2023, Zaxby's has locations in 19 states, having spread to Indiana, Missouri, Kansas, and even Montana.

Zaxby's also is known to go big for restaurant openings and re-openings. For example, when a Murfreesboro, Tennessee, store reopened following renovations, the company marked the occasion with a day-long celebration that included a wing-eating contest. And when a new Jasper, Indiana, franchise was ready in 2022, Zaxby's held a ribbon-cutting ceremony with the town's chamber of commerce. Notably, both locations' exteriors had a farmhouse aesthetic, indicating that Zaxby's still tries to keep a cozy feel even in the fast food business.

Like its fast food rivals that have pushed outwards, Zaxby's has remained deeply connected to its original home turf. More than a quarter of Zaxby's locations are in its home state of Georgia. And even that's small compared to some regionally focused chicken chains. For instance, 43% of all Bojangles locations are in North Carolina, and 41% of Church's Chicken restaurants are in Texas.

Zaxby's also has a large presence in the five states bordering Georgia, with 90-plus stores each in North Carolina, Florida, South Carolina, Alabama, and Tennessee. And interestingly, the single city that has the most Zaxby's is Jacksonville, Florida, with 12 establishments. Even with all the locations already in the Southeast, new Zaxby's openings are greeted with enthusiasm. In 2015, people camped overnight for the opening of an Elizabeth, North Carolina, store — in part because of a promotion that granted 52 free food deals to the first 100 customers. Zaxby's has also made use of shopping centers, with 47 mall-based locations in 12 states.

Even with locations in "only" 19 states, Zaxby's has still positioned itself well among nationwide restaurant chains. In 2022, Technomic ranked Zaxby's No. 37 on its annual "Top 500 Chain Restaurant Report" with estimated previous-year sales of $2.234 billion (via Restaurant Business Magazine). That put it in front of many fast food chains with more total locations, including Jersey Mike's, Wingstop, Five Guys, and Hardee's. Curiously, that represented a drop from No. 30 in the 2021 Technomic report (via Restaurant Business Magazine) — even though year-to-year sales increased by nearly 12% from $1.996 billion. Franchise Times also placed Zaxby's as the 62nd-best franchising opportunity of 2022 with estimated average sales of more than $2.2 million per location.

However, despite that 2021 sales bump, it appears growth has cooled in recent years. As recently as 2016, Nation's Restaurant News had Zaxby's in the top 10 fastest-growing chains with per-year unit growth of 10.3%. In 2020, Zaxby's sold a large stake in the company to private equity firm Goldman Sachs with the idea of eventually being a national chain. At the time of the sale, Zaxby's had 904 stores, but as of February 2023, Zaxby's was at 925 stores — an increase of less than 1% per year. Though the reasons for the relative stagnation aren't clear, whether the chain's national dreams will eventually be realized remains to be seen.

So Zaxby's food is well-loved. But what about the company itself? Any questions about whether it's a good place to work may have been answered in 2021. That year, Forbes and Statista placed Zaxby's at No. 111 on their annual list of America's best large employers — and No. 1 among its competitor restaurants (via PR Newswire). The list considered all businesses that employ at least 1,000 people and was based on how likely current employees were to recommend their family and friends also work there. In the 2023 Forbes ranking, Zaxby's slid down some but still made the list with room to spare.

Granted, like every restaurant, there are a few "bad apples" within the bunch. In 2022, for example, a Georgia Zaxby's franchise was fined for violating child labor laws at two locations. But by and large, it appears Zaxby's is a great place to eat and work. The chain showed its commitment to licensees during the COVID-19 pandemic by waiving $5 million in franchise fees and adding a bonus program to increase pay at company-owned stores.

The Chicken Sandwich Wars have been well-known in the fast food industry over the last few years, drawing in everyone from McDonald's to Boston Market. On October 27, 2020, Zaxby's entered the ring with its new Signature Sandwich. And it did so as only Zaxby's could, beginning with a "Y'all ready?" tweet that referenced the original social media interaction between Popeyes and Chick-fil-A (which is seen as the start of the "war"). Initial Zaxby's ads also poked fun at people thinking the sandwich wars were over.

At the time, Joel Bulger, Zaxby's CMO, told QSR that the sandwich had gone through several rounds of testing, showing the chain's commitment to getting things right. Zaxby's continued to play the chicken sandwich long game by starting with a limited test release before offering the Signature Sandwich at all restaurants beginning the following March. The approach appears to have paid off, as a month later, Zaxby's won the inaugural Fasties award for best fried chicken sandwich among fast-casual restaurants. In March 2022, the Signature Club Sandwich joined the lineup — which added bacon and American cheese — while the original Signature Sandwich officially became a permanent menu item.

In modern fast food and fast-casual dining, good mobile apps are key to success. In October 2022 alone, the McDonald's app was downloaded 4.4 million times, and the top 10 quick-service restaurants combined for 12.3 million app downloads.

Zaxby's, meanwhile, made major mobile inroads in 2022. The chain's app had the seventh-most downloads of October, and for the year, its engagement soared more than anyone else's, increasing by 317%. This was nearly double Zaxby's nearest quick-service competitor Jersey Mike's, which came in at 176%.

There were two possible reasons for the surge. One was the introduction of Zaxby's Signature Chicken Sandwich, and the other is the relaunch of the Zax Rewardz program — which Newsweek, working with Statista, named one of the year's best loyalty programs. According to Zaxby's marketing chief Patrick Schwing, rewards registrations more than doubled year-over-year after the relaunch, showing just how much a good program can excite customers.

Although Zaxby's couldn't allot much money to advertising in the beginning, it seems the chain has made up for it. As of early 2012, 45 different celebrities had appeared in the Zaxby's "Indescribably Good" series since it began in 2003. Although we were unable to find updated numbers, they surely have only grown since then.

The list of celebrities that have appeared in those Zaxby's ads is a who's who of entertainment. In April 2012, Chris Kattan and Jill Hennessy appeared in ads for the Zensation Zalad and Brownie Batter Milkshake. Others who have been in Zaxby's commercials include boxer Evander Holyfield, race car driver Bobby Allison, singer Melinda Doolittle, and baseball announcer Chip Caray. Zaxby's has also partnered with Sony Pictures for multiple movie releases, including "Men in Black: International," "Jumanji: The Next Level," and "Ghostbusters: Afterlife." Ads can venture into the silly as well. In 2022, Zaxby's reimagined an old video series called "Guy on a Buffalo" as a commercial called "Guy on a Buffalo Wing" to promote its new Buffalo Garlic Blaze wing sauce.

Sports are big business in the U.S. — and another way that Zaxby's has stamped itself onto pop culture. Perhaps the biggest splash came in early 2013 when the restaurant branded itself as "Zaxby's – The Official Chicken of College Sports" — right down to filing a trademark application and creating a website. As part of the campaign, Zaxby's signed individual agreements with the football and basketball teams of 25 universities, covering every state the chain was located in at the time. Then, in 2014, it signed a four-year agreement to be the title sponsor of the Heart of Dallas Bowl in Texas.

While the website and bowl sponsorship are no longer active, Zaxby's is still part of college sports. After new rules allowed college athletes to profit off their Name, Image, and Likeness (NIL), Zaxby's signed two different University of Georgia Bulldog football players as brand ambassadors, inking J.T. Daniels in 2021 and Brock Bowers in 2022. It might be a coincidence that Georgia won the National Championship both years, but we're not one to decide. Zaxby's was also a regular sponsor for cofounder Tony Townley's son John Wes Townley when he competed in various NASCAR and ARCA national racing series. (Tragically, John Wes was fatally shot in a domestic violence incident in 2021.)

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Through all of Zaxby's growth, new sauces, fun commercials, and other landmarks, the chain's co-founder and namesake Zach McLeroy has been the one constant. Although Tony Townley exited the business in 2020 after Goldman Sachs purchased a stake, McLeroy stayed on. The Goldman Sachs sale — reported to be worth $2 billion — was simply a buyout of Townley's portion, meaning McLeroy remains a part owner.

He did step back to a certain degree in October 2021 when Zaxby's hired Bernard Acoca away from El Pollo Loco to replace him as CEO. However, as of February 2023, McLeroy is still Zaxby's chairman. Following Acoca's hiring, McLeroy told Franchise Times that a new CEO was part of the company's long-term plans to grow more aggressively. But even if another Zaxby's never opens, McLeroy has come a long way from needing to sell his drums to open a restaurant. And he's kept his sense of humor, joking after the Goldman Sachs acquisition that "we're breaking up the band after all these years" (via Franchise Times).