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CHICK-FIL-A: INTERNATIONAL EXPANSION CHALLENGES1

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September 6, 2019, marked the grand opening of the “first Chick-fil-A franchisee-owned restaurant outside of the United States,”2 in Toronto, Canada. A month later, Chick-fil-A opened its second international franchise, in England.3 Chick-fil-A’s international expansion was accompanied by excitement from fans and anger from members of the lesbian, gay, bisexual, transgender, and questioning (LGBTQ) community and their allies.4 The US-based fast-food company’s international expansion came at the same time as the company had lost two US airport store deals within two weeks due to criticisms about its corporate donations to anti- LGBTQ groups and public comments opposing gay marriage made by its chief executive officer (CEO).5 As the US protests became a global movement, England’s first Chick-fil-A was forced to agree to relocate by April 2020,6 and a number of questions emerged about the company’s internationalisation strategy.

CONTROVERSIAL GROWTH

Chick-fil-A, whose titular A stood for “Grade A,” top-quality food,7 opened its first location in 1967 in a 384-square-foot retail space in Atlanta, Georgia’s Greenbriar Mall. It was founded by Samuel Truett Cathy, who had established a diner in 1946 called the Dwarf Grill before starting Chick-fil-A, where Truett was credited with having invented the boneless chicken sandwich, which went on to become a fast-food staple.8 In 2013, Truett Cathy was succeeded as Chick-fil-A’s CEO by his son, Dan Cathy.9

Chick-fil-A was anchored in the United States’ Southern “Bible Belt” region.10 From its first tiny store, it expanded to include approximately 2,400 restaurants that generated US$10 billion11 in system-wide sales (see Exhibit 1), earning a reputation as a family-owned chain whose stores were always closed on Sundays. In 2018, it was ranked the third-largest fast-food chain in the United States, after McDonald’s Corporation (McDonald’s) and Starbucks Corporation, and its sales were growing at a rate of 16.7 per cent annually. Moreover, in 2018, it had average per-location sales of $4.6 million (up from $4.2 million in 2017), as compared to McDonald’s $2.8 million.12

However, Chick-fil-A’s extraordinary growth was controversial. In 2012, Chick-fil-A became the “culinary symbol of one of the country’s major social issues” due to the Cathy family’s public opposition to same- sex marriage. The Cathy family, who self-identified as Baptist Christians, had donated millions of dollars to organisations that opposed same-sex marriage and that promoted “conversion therapy” for LGBTQ individuals. In 2012, Dan Cathy also stated publicly that Chick-fil-A supported “the biblical definition of a

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marriage.” This public relations (PR) battle became political during the 2012 presidential campaign, and Mike Huckabee, the former governor of Arkansas, declared a Chick-fil-A Appreciation Day. The controversy spilled into a wider media campaign (even the Muppets got involved), and protests erupted, with one LGBTQ group staging a “same-sex kiss-in day” at Chick-fil-A locations.13

Despite the protests, Dan Cathy stated that Chick-fil-A would “stay the course” and would continue to “operate on biblical principles.”14 The Chick-fil-A Foundation also continued to fund anti-LGBTQ organisations,15 with donations totalling more than $1.3 million in 2015 and increasing to more than $1.8 million in 2017, according to tax filings.16 The Human Rights Campaign’s Buyers Guide gave Chick-fil-A a rating of zero due to the company’s lack of pro-LGBTQ workplace policies,17 and Dan was discretely dropped from a 2018 conference on inclusive economic development.18 The controversy again made headlines in the spring of 2019 when, within a two-week period, two airports (in San Antonio, Texas19 and Buffalo, New York20) banned the opening of Chick-fil-A stores in their terminals. In response, in May 2019, Texas passed a “Save Chick-fil-A” bill (Senate Bill 1978) that supporters argued would provide religious protections to companies like Chick-fil-A, although critics contended that the bill allowed discrimination against LGBTQ individuals.21 The polarised debate continued in September 2019, when faculty at Kansas University characterised Chick-fil-A as a “bastion of bigotry” and sought its removal from campus, while some students petitioned to keep it.22

Despite these tensions, Chick-fil-A sales continued to grow. Eating at Chick-fil-A was generally perceived as a more pleasant and friendly experience than at other fast-food chains due to the politeness of Chick-fil- A employees, who were required to say “my pleasure” instead of “you’re welcome” and who generally signalled that they were well-treated.23 The negative press and boycotts since 2012 did not have a noticeably negative effect on the company’s business;24 between 2012 and 2019, Chick-fil-A sales more than doubled, and the chain opened an additional 700 restaurants.25 In 2018, the company was rated “America’s most beloved fast-food chain” in the American Customer Satisfaction Index’s annual survey.26 Chick-fil-A diners .were clearly willing to separate their dining experience from the company’s politics; this was perhaps best summarised by openly gay US presidential candidate Pete Buttigieg, who stated in March 2019, “I do not approve of their politics. . . but I kind of approve of their chicken.”27 Moreover, Glassdoor had repeatedly listed Chick-fil-A among the Best 100 Places to Work (#43 in 2014, #72 in 2018) and as having a Top 100 CEO (#26 in 2013, #37 in 2017, and #70 in 2019), and in 2017, it also listed the company as among the Best 100 Places to Interview (#37).28