Too Chicken to Convert A Chick Fil-A Dilemma Discussion Questions

Too Chicken toConvert?
A Chick-Fil-A Dilemma
•
Chick-Fil-A has a long standing reputation for
being vocal about its Christian values both inside
and outside of their business.
•
All locations are closed on Sundays
•
The franchise owners are required to “espouse
Christian values”
•
Are these “Christian values” becoming a
potential problem for Chick-Fil-A? Why or why
not?
•
What are some issues that Chick-Fil-A is facing?
•
What are customers critiquing them about?
•
Breakout Groups (1-2)
•
What is the central issue in this case?
•
Three recommendations can be made to Dan Cathy:
•
Maintain status quo: Continue to demonstrate ChickFil-A’s strong, Christian values despite the negative
publicity.
•
Change to reflect current trends: Adopt values that are
more neutral to attempt to appeal to a wider population
(this means giving up the values that it has been
following for decades).
•
Adopt a balanced solution: Continue to follow
conservative values but be less public about it.
•
Breakout Groups (3-5)
•
Maintain Status Quo:
•
Chick-Fil-A has already established itself as a
Christian organization, so this route is the most
practical operationally.
•
Company could use the same policies that it has
been accustomed to without any modifications.
•
What are the benefits of maintaining the status
quo?
•
Why would maintaining the status quo be
detrimental?
•
Adopt Neutral Values-adopt new values that
distance the company from its traditional
Christian values.
•
What are the benefits of adopting a neutral/new
values stance?
•
What are the drawbacks of taking on a more
neutral stance?
•
A Balanced Solution: find the middle ground
between keeping the same conservative values
and adopting new ones.
•
Find ways to demonstrate their faith that are not as public or that
publicly separate the Cathy family’s religiosity from its business
operations.
•
How do you prevent your very public beliefs from
overriding your business goals?
•
What are the benefits to Chick-Fil-A’s company
and customers of adopting a balanced solution?
•
What are the issues with adopting a balanced
solution?
•
What companies have remained true to their
Christian values, but attracted a wider audience?
•
What have these companies done to espouse
their values and still retain a wider audience?
•
Breakout Groups (6-8)
•
•
How should Chik-Fil-A implement a balanced
solution?
•
•
What would you do if you were Dan Cathy when
presented with these different potential strategic
options and why?
•
Masterpiece Cakeshop v. Colorado Civil Rights
Commission
•
(Breakout Groups 9)
•
Colorado Anti-Discrimination Act prevents
discrimination by business entities on the basis
of sexual orientation..
•
1st Amendment Freedom of Religion-free
exercise clause-prevents the government from
interfering in individuals’ freely practicing their
faith.
•
1st Amendment protects all forms of speech or
expression-including artistic expression. Baking
a cake may be a form of artistic expression.
Government cannot compel any form of speech.
•
Charles Craig and David Mullens requested a
cake from Masterpiece Cakeshop for their
wedding.
•
Baker Jack Phillips refused to make the wedding
cake because making a cake for a same-sex
couple’s wedding violated his religious belief.
•
Phillips was found to be in violation of the
Colorado Anti-Discrimination Act for refusing to
bake a cake for Craig and Mullens.
•
Phillips appealed the decision to the U.S
Supreme Court alleging that the Colorado AntiDiscrimination Act violates his First Amendment
Right to Freedom of Religion and Free Speech
•
Can the government compel Phillips to bake a
cake for Craig and Mullens or does this violate
his 1st amendment right to free speech?
•
Does a business owner have the right to refuse
service to a same-sex couple because of his
religious beliefs?
•
What are the broader implications if the court
rules that in fact Phillips does have a right to
refuse service to gay couples because of his
religious beliefs?
Homework
Too Chicken to Convert? A Chick-Fil-A Dilemma
1.
What are Chick-Fil-A’s central issues?
2. What recommendations do you have for Dan Cathy? Consider Cathy’s options and
the benefits and potential issues with each option.
In class Discussion
Chick-Fil-A case
The Chicken Has Issues
1. Are Chick-Fil-A’s “Christian values” becoming a potential problem for the
company? Why or why not?
a. What are some issues that Chick-Fil-A is facing?
b. What are customers critiquing them about?
2. What is the central issue in this case?
What Should Chick-Fil-A Do?
3. Maintain status quo: Continue to demonstrate Chick-Fil-A’s strong,
Christian values despite the negative publicity.
a. What are the benefits of maintaining the status quo?
b. Why would maintaining the status quo be detrimental?
4. Change to reflect current trends: Adopt values that are more neutral to
attempt to appeal to a wider population (this means giving up the values that
it has been following for decades).
a. What are the benefits of adopting a neutral/new values stance?
b. What are the drawbacks of taking on a more neutral stance?
5. Adopt a balanced solution: Continue to follow conservative values but be
less public about it. Find ways to demonstrate your faith that are not as
public or separate the Cathy’s religiosity from the business.
a. What are the benefits of adopting a balanced solution?
b. What are the issues with adopting a balanced solution
6. What companies have remained true to their values, but attracted a wider
audience? What have these companies done to espouse their values and still
retain a wider audience?
7. How should Chick-Fil-A implement a balanced solution?
8. What would you do if you were Dan Cathy when presented with these
different potential strategic options and why?
Masterpiece Cakeshop v. Colorado Civil Rights Commission
9. Colorado Anti-Discrimination Act prevents discrimination by business
entities on the basis of sexual orientation. 1st Amendment Freedom of
Religion-free exercise clause-prevents the government from interfering in
individuals’ freely practicing their faith. 1st Amendment protects all forms of
speech or expression-including artistic expression. Baking a cake may be
considered a form of artistic expression/speech. Government cannot compel
any form of speech. Charles Craig and David Mullens requested a cake from
Masterpiece Cakeshop for their wedding. Baker Jack Phillips refused to make
the wedding cake because making a cake for a same-sex couple’s wedding
violated his religious belief. Phillips was found to be in violation of the
Colorado Anti-Discrimination Act for refusing to bake a cake for Craig and
Mullens. Phillips appealed the decision to the U.S Supreme Court alleging
that the Colorado Anti-Discrimination Act violates his First Amendment Right
to Freedom of Religion and Free Speech
a. Can the government compel Phillips to bake a cake for Craig and
Mullens or does this violate his 1st amendment right to free speech?
b. Does a business owner have the right to refuse service to a same-sex
couple because of his religious beliefs?
c. What are the broader implications if the court rules that in fact
Phillips does have a right to refuse service to gay couples because of
his religious beliefs?
For the exclusive use of T. Haidar, 2022.
W13434
TOO CHICKEN TO CONVERT? A CHICK-FIL-A DILEMMA 1
Valerie Ho, Professors Seung Hwan (Mark) Lee and Matthew Thomson wrote this case solely to provide material for class
discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation.
This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the
permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights
organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western
University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com.
Copyright © 2013, Richard Ivey School of Business Foundation
Version: 2013-10-08
Dan Cathy, president and chief operating officer of Chick-fil-A, put down his morning newspaper after
reading another scathing article about his now notorious fast-food chain. Cathy and his family had strongly
rooted Christian beliefs that had carried into their business, but he had never intended for those beliefs to
offend anyone. Now, the media and the public were beginning to misconstrue Chick-fil-A’s strong values
as discrimination and prejudice, the opposite of what Cathy had envisioned. Were the Cathy family’s
deeply rooted Christian values hindering the business?
The Chick-fil-A company started in 1946, when Dan’s father, Truett Cathy (Chick-fil-A’s current
chairman and chief executive officer) and his uncle, Ben, opened the Dwarf Grill (later named Dwarf
House) in Hapeville, Georgia. However, in 1949, Ben was tragically killed in a plane crash. 2 Despite the
death of his brother and business partner, Truett continued to franchise Dwarf House throughout the
Atlanta area, opening another location in 1951.
In 1960, tragedy struck yet again, when a fire destroyed the first Dwarf House location. Instead of giving
up, Truett had seen the fire as an act from God. “When I had two restaurants, I had one too many, so the
Lord burned one down and gave me the chance to start Chick-fil-A,” Truett optimistically claimed. 3 He
used the fire as an opportunity to open another restaurant. After years of experimenting with pressure
cookers, Truett perfected the boneless chicken breast sandwich in 1961. He called the sandwich a “Chickfil-A,” a clever spin-off of chicken fillet. Six years later, Truett Cathy opened up the first Chick-fil-A’s
restaurant in Greenbriar Mall in Atlanta, Georgia. 4 Today, Chick-fil-A boasted 1,700 locations in 39 states
with annual sales over $4.6 billion 5 in 2012. Two of Truett’s sons served as executives for the company.
Dan Cathy was the president and chief operating officer, while Donald “Bubba” Cathy was executive vice
1
This case has been written on the basis of published secondary sources. Consequently, the interpretation and
perspectives presented in this case are not necessarily those of Chick-fil-A or any of its employees.
2
Truett Cathy, “Truett’s Timeline,” The Cathy Family website, 2013, http://www.cathyfamily.com/truett/timeline.aspx#3,
accessed July 13, 2013.
3
John
J.
Milller,
“Service
with
a
Smile,”
Philanthropy
Magazine,
fall
2008,
www.philanthropyroundtable.org/topic/excellence_in_philanthropy/service_with_a_smile, accessed July 21, 2013.
4
Truett Cathy, “Truett Cathy Embracing Unexpected Opportunities Since 1929,” S. Truett Cathy website, 2013,
http://www.truettcathy.com/about_opps.asp, accessed July 21, 2013.
5
All currency amounts are shown in U.S. dollars unless noted otherwise.
This document is authorized for use only by Turki Haidar in Law for the Entrepreneur Spring 2022 taught by Sona Gala, Loyola Marymount University from Jan 2022 to Jul 2022.
For the exclusive use of T. Haidar, 2022.
Page 2
9B13A030
president and Dwarf House president. 6 Chick-fil-A was also proud of its charity work, having donated
more than $68 million to over 700 organizations.
All members of the Cathy family were devout Christians. All three children practised regular worship,
Bible study, prayer and tithing. Dan Cathy believed that it was an “incredible privilege” to have been
raised in a Christian home. He remembered being taken to church “every time the doors were open.” His
parents were highly active church members, both teaching Sunday school. Many of the charities and
foundations that the family supported, including those supported by Chick-fil-A, were Christian-based
organizations. For example, WinShape, the family-owned foundation, sought to help young people find
and develop a relationship with God to enrich their personal and professional lives. 7
The Cathy family was extremely proud of their faith, which was reflected in the daily operations of Chickfil-A. “We don’t claim to be a Christian business,” Dan Cathy told the Biblical Recorder in July 2012,
“But as an organization we can operate on biblical principles. So that is what we claim to be.” 8 However,
Chick-fil-A had recently come under fire for upholding its conservative views. Critics had accused Chickfil-A of everything from discriminatory hiring to supporting anti-gay organizations. 9 Some critics were
urging the company to take a less conservative stance in public and to opt for more neutral views.
Although Cathy may not have been willing to abandon the Biblical principles on which the company had
been founded, a change might be necessary to create a more positive image of the company in the eyes of
the public. However, would such a change cause Chick-fil-A to lose the strong following it had worked so
hard to develop?
Chick-fil-A proudly used the Bible to guide its business decisions. The most notable example was the
Sunday closures at all Chick-fil-A locations. Truett believed that “all franchised Chick-fil-A Operators and
their Restaurant employees should have an opportunity to rest, spend time with family and friends, and
worship if they choose to do so,” 10 which closely aligned with the Christian practice of Sabbath. In
addition, Chick-fil-A took a firm stance against the legalization of same-sex marriage. “We are very much
supportive of the family — the biblical definition of the family unit,” Cathy asserted. “We are a familyowned business, a family-led business, and we are married to our first wives. We give God thanks for
that.” 11 Chick-fil-A also preferred that its franchise owners shared its Christian values. The company asked
that its franchise owners “espouse Christian values and be willing to participate in group prayers during
training and management meetings.” 12
Cathy was genuinely torn about how to move forward. Maintaining conservative business practices had led
to many benefits. For one, Chick-fil-A had already established itself as an organization that operated on
Biblical business practices, and adapting new or changing those values could decrease brand equity.
Maintaining a consistent brand image was crucial to maintaining a strong brand. 13 One of the reasons that
Chick-fil-A had remained one of the top brands in the United States was possibly due to its consistent selfportrayal as a company that closely followed the Bible.
6
Chick-fil-A, “Company Fact Sheet,” Chick-fil-A website, 2013, http://www.chick-fil-a.com/Company/Highlights-Fact-Sheets,
accessed July 13, 2013.
WinShape Foundation, “About,” WinShape website, 2013, http://winshape.org/about, accessed July 21, 2013.
8
http://www.chick-fil-a.com/Company/Highlights-Sunday, accessed September 17, 2013.
9
Ibid.
10
Ibid.
11
Ibid.
12
Lisa Magloff, “How to Get Approved to Open a Chick-fil-A,” Small Business by Demand Media, 2013,
http://smallbusiness.chron.com/approved-open-chickfila-11450.html, accessed July 21, 2013.
13
Kevin Lane Keller, “Conceptualizing, Measuring and Managing Customer-Based Brand Equity”, Journal of Marketing, Vol.
57 (1), 1993, 1-22.
7
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For the exclusive use of T. Haidar, 2022.
Page 3
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Chick-fil-A’s conservative values had also helped the company to establish itself as family-friendly brand
that many consumers had become attached to. Chick-fil-A’s website was filled with testimonials from
loyal customers who had been taking their families to Chick-fil-A for years, including a couple who had
celebrated their 58th anniversary at a Chick-fil-A in North Carolina. The couple was graciously treated to
free lunch and ice cream and claimed to be “overcome with love and attention.” 14
Additionally, many customers were avid supporters of Chick-fil-A’s use of conservative Christian values
to guide its business operations. When Cathy took a stand against same-sex marriage, hundreds of Chickfil-A fans flooded the Abingdon, Virginia, location in support of his views. Many felt empowered by
Cathy’s seemingly unpopular stance. For example, pastor Marva Choates said, “It’s time for Christians to
stand up and take a stand for what we believe in. We need to let others know that the Bible is right. . . .
[Dan Cathy] is not ashamed to let others know where he stands.” 15 Moreover, Chick-fil-A’s employees
appeared to be extremely satisfied with how Chick-fil-A operated. As a result of their Biblical operations,
Chick-fil-A employees worked under much less strenuous circumstances (e.g., not having to work on
Sundays). And although the estimated average employee turnover for fast-food restaurants was 145 per
cent, 16 Chick-fil-A boasted an incredible 3 per cent turnover rate in 2011. 17
On the other hand, there were also numerous reasons why it would be beneficial for Chick-fil-A to adopt
more neutral practices. First, a less extreme stance would help gain market share by appealing to a wider
target market. Many people were beginning to boycott Chick-fil-A because of the causes it did or did not
support. Recently, despite being located in the heart of Chick-fil-A’s home state of Georgia, Emory
University announced that Chick-fil-A would be removed from its food court. The university had
originally issued a statement claiming that Chick-fil-A’s stance on gay marriage did not “reflect [the
school’s] values of access, inclusion and equity,” though administrators later released a statement claiming
the decision had not been politically motivated. 18
Additionally, many Christians and other religious groups were becoming less conservative and were
beginning to support more liberal causes. 19 According to a national poll conducted by Bloomberg, 52 per
cent of Americans support legalizing same-sex marriage. 20 At the same time, a sizable numbers of
Christians (e.g. 60 per cent of Catholics, 38 per cent of Protestants) were actually broadly supportive of
same-sex marriage. 21 In an editorial, the managing editor of Christianity Today wrote “I hope and pray that
14
Chick-fil-A, “Surprise 58th Anniversary,” Chick-fil-A website, http://www.chick-fil-a.com/Story/Detail/5613, accessed July
20, 2013.
15
Bryna Zumer, “Fans of Chick-fil-A and ‘Christian Values’ Take a Stand in Abingdon,” Baltimore Sun, August 2, 2012,
http://www.baltimoresun.com/explore/harford/news/ph-ag-chick-fila-appreciation-0803-20120801,0,6236001.story, accessed
July 22, 2013.
16
Chad Halvorson, “3 Easy Ways to Minimize Employee Turnover,” When I Work, February 26, 2013,
http://wheniwork.com/3-easy-ways-to-minimize-employee-turnover, accessed July 21, 2013.
17
Lisa Landoe, “Chick-fil-A on Doing unto Others,” The Christian Century, April 26, 2011,
http://www.christiancentury.org/blogs/archive/2011-04/chick-fil-doing-unto-others, accessed July 21, 2013.
18
Glennisha Morgan, “Chick-fil-A Removed from Emory University’s Food Court,” The Huffington Post, March 11, 2013,
http://www.huffingtonpost.com/2013/03/11/chick-fil-a-emory-university-_n_2854599.html, accessed July 21, 2013.
19
Barnes, Megan, “Evangelicals Becoming More Accepting of LGBTs, Study Finds”,
http://www.edgeonthenet.com/news/religion/148558/evangelicals_becoming_more_accepting_of_lgbts,_study_finds,
accessed September 25, 2013.
20
Lisa Lerer and Greg Strohr, “Gay Marriage Gains Ground in Poll as Court Readies Ruling,” Bloomberg News, June 6,
2013, June 5, 2013. http://www.bloomberg.com/news/2013-06-06/gay-marriage-gains-ground-in-poll-as-court-readiesruling.html, accessed July 21, 2013.
21
Gallup poll, July 29, 2013, www.gallup.com/poll/163730/back-law-legalize-gay-marriage-states.aspx, accessed September
25, 2013
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church communities will take up the duty and delight of stitching single brothers and sisters, gay and
straight, into its shared life,” one Christian wrote. 22
Adopting more neutral values would allow Chick-fil-A to be open to operating on Sundays, when it would
be able to generate more revenue. For example, if the restaurants had been open on Sundays in 2012, the
company could have generated hundreds of millions in additional sales. 23 Lastly, if Chick-fil-A were to
adopt more neutral values, it would be easier to become a publicly traded company, which would be
advantageous if the company wanted to expand or needed additional funds for another project. Investors
would naturally be attracted to Chick-fil-A’s high-performing business. If Chick-fil-A adopted more
neutral values, it would potentially attract other investors who may not share the company’s current
political and religious views.
Either option — maintaining conservative values or adopting more neutral values — would lead to
negative consequences. If Chick-fil-A decided to maintain its conservative values, the brand would
continue to receive support from the conservative Christian community. However, as more Christians were
becoming less conservative, Chick-fil-A could eventually reach a ceiling in terms of the number of new
customers that it could attract. Additionally, if Chick-fil-A were to ever need additional capital, investors
may shy away from such investments after considering the company’s Bible-based business operations. On
the other hand, adopting more neutral values also had its share of consequences. Although the company
could gain greater market share, the fast-food industry was so saturated that changing values could have no
effect on profits at all. Instead, such changes in business policy could upset loyal customers who identified
with those Biblical values. Further, employees at the retail level could become upset if they were required
to work on Sundays, causing a spike in employee turnover.
With increasing scrutiny from the public media, Dan Cathy pondered over this quandary. Should he
continue to use business practices that aligned with his family’s personal beliefs but conflicted with many
others, or should he adopt new values that could satisfy the greater public but directly clash with his own
beliefs? With pressures mounting, Dan Cathy planned to raise this issue in his upcoming board meetings.
22
Katelyn Beaty, “Same-Sex Marriage and the Single Christian,” Christianity Today, July 2013,
http://www.christianitytoday.com/ct/2013/july-web-only/same-sex-marriage-and-single-christian.html?start=2, accessed July
22, 2013.
23
In 2012, Chick-fil-A made $4.6 billion in sales, which is approximately $14.7 million per day (365 days – 52 Sundays =
$4.6 Billion / 313).
This document is authorized for use only by Turki Haidar in Law for the Entrepreneur Spring 2022 taught by Sona Gala, Loyola Marymount University from Jan 2022 to Jul 2022.