Case Study - Law Class

1. Identify the stakeholders?

2. Draft a Corporate Management Practice.

3. Map out the scope.

4. What ideas would you share the ideas with management

Chick-fil-A is arguably best known for three things: its juicy chicken sandwiches, its employees perpetually chipper attitudes, and its long history of donating to charities with anti-LGBTQ stances.

But one of those things seems to be changing next year. The fast-food chain is changing its charitable giving approach in 2020 and says, in an oblique way, that it will no longer donate to such organizations.

The Chick-fil-A Foundation will instead take a more focused giving approach, Chick-fil-A announced in a Monday press release. The foundation has set aside $9 million for 2020 that will be split between three initiatives: promoting youth education, combating youth homelessness, and fighting hunger. Those funds will be distributed to Junior Achievement USA, Covenant House International, and local food banks in cities where the chain opens new locations.

The release didnt outright say the biggest change to Chick-fil-As philanthropic giving plan: In 2020, the chain wont give any money to charities that take anti-LGBTQ stances. In an interview with real estate publication Bisnow, however, Chick-fil-As president and CEO Tim Tassopoulos made it clear that the companys new donation strategy is at least partly related to the constant backlash Chick-fil-A has faced over its donations.

Theres no question we know that, as we go into new markets, we need to be clear about who we are, Tassopoulos told Bisnow. There are lots of articles and newscasts about Chick-fil-A, and we thought we needed to be clear about our message.

Notably, Chick-fil-A never explicitly said it would permanently stop donating to anti-gay groups or organizations that discriminate against LGBTQ people it just said it was changing its philanthropic giving model. Chick-fil-A didnt respond to The Goods request for comment, but a company spokesperson did tell VICE that it wouldnt rule out giving to religious groups in the future.

No organization will be excluded from future considerationfaith-based or non-faith-based, Chick-fil-A President and COO Tim Tassopoulos said in a statement to VICE.

Chick-fil-As controversial donations dont seem to have made a dent in its profits as of late 2018, it was on track to be the third-largest fast-food chain in the United States though its hard to know for sure since the company is still privately held. Still, Tassopouloss comments suggest that the companys reputation has suffered even if its bottom line hasnt.

LGBTQ groups are cautiously optimistic about the change

LGBTQ rights groups like GLAAD say Mondays news is a step in the right direction for Chick-fil-A, though they warn the chain is still far from inclusive.

Chick-fil-A investors, employees, and customers can greet todays announcement with cautious optimism, but should remember that similar press statements were previously proven to be empty, Drew Anderson, director of campaigns and rapid response for GLAAD, told The Goods in an emailed statement. In addition to refraining from financially supporting anti-LGBTQ organizations, Chick-Fil-A still lacks policies to ensure safe workplaces for LGBTQ employees and should unequivocally speak out against the anti-LGBTQ reputation that their brand represents.

As Andersons statement suggests, Chick-fil-A has promised to cut ties with anti-LGBTQ charities before. In 2012, the Chicago-based Civil Rights Agenda issued a statement claiming that Chick-fil-A had promised to no longer give to anti-gay organizations, such as Focus on the Family and the National Organization for marriage.

Chick-fil-A declined to comment on the matter at the time, instead issuing a boilerplate statement to BuzzFeed News:

We have no agenda, policy or position against anyone. We have a 65-year history of providing hospitality for all people and, as a dedicated family business, serving and valuing everyone regardless of their beliefs or opinions. The genuine, historical intent of our WinShape Foundation and corporate giving has been to support youth, family and educational programs.

But the companys donations to anti-LGBTQ groups continued. As ThinkProgress reported in 2017, Chick-fil-A continued to bankroll anti-gay groups like the Fellowship of Christian Athletes, the Salvation Army, and the Paul Anderson Youth Home through its foundation. Recent tax filings show that Chick-fil-As foundation donated $115,000 to the Salvation Army and $1.65 million to the Fellowship of Christian Athletes in 2018, though a company spokesperson told Bisnow that those donations were the result of multi-year commitments to each organization.

This time around, though, Chick-fil-A announced the change to its philanthropic plan itself instead of letting the news trickle out through a third party. But it didnt quite promise to end all donations to anti-LGBTQ groups. Instead, the Chick-fil-A Foundation will begin doling out donations through annual grants, Tassopoulos told Bisnow, and it will reevaluate the charities it donates to each year.

Chick-fil-As business model is largely rooted in its owners religious beliefs

S. Truett Cathy, a devout Baptist, opened the first Chick-fil-A in Atlanta in 1967, and the chain has remained in his familys hands ever since. Today there are more than 2,300 locations across the country all of which are closed on Sundays. (Having worked seven days a week in restaurants open 24 hours, Chick-fil-As website reads, Truett saw the importance of closing on Sundays so that he and his employees could set aside one day to rest and worship if they choose a practice we uphold today. A previous iteration of the website reportedly claimed the restaurant was closed on Sundays as a testament to [Cathys] faith in God.)

It was not an issue in 1946 when we opened up our first restaurant, Dan Cathy, Truetts son and the chains current CEO, said in a 2012 interview with the Baptist Press. While developers had no identity whatsoever with our corporate purpose to glorify God and be a faithful steward of all that is entrusted to us and have a positive influence on all that come in contact with Chick-fil-A, they did identify with the rent checks that we wrote to the mall, based on our sales.

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Boycotts havent stopped the growth of Chick-fil-A

That 2012 interview, in which Cathy was quoted as saying that he believes in the biblical definition of the family unit i.e., that marriage should only be between a man and a woman was the catalyst for a major national controversy. Cathy later tried to clarify his point in a radio interview: As it relates to society in general, he said, I think we are inviting Gods judgement on our nation when we shake our fist at him and say, We know better than you do as to what constitutes marriage.

The backlash to Cathys comments was swift. First a New York woman named Carly McGehee planned an LGBTQ kiss-in at Chick-fil-A restaurants across the country. It was scheduled for August 3, 2012. Then came the backlash to the backlash: Former Arkansas Governor Mike Huckabee responded to McGehees plan with a Chick-fil-A Appreciation Day scheduled for August 1. Thousands of people across the country bought chicken sandwiches in support of the Cathys and their mission, and Dan Cathy himself made an appearance at a Chick-fil-A location in Fayetteville, North Carolina, to thank customers for showing up.

But the 2012 incident wasnt the first time the Cathys were accused of homophobia. A year earlier, a Pennsylvania Chick-fil-As decision to donate food to a marriage seminar conducted by the Pennsylvania Family Institute, a group known for its anti-gay advocacy, prompted a nationwide boycott of the chain. Cathy issued a video statement in response to the boycott, in which he claimed the company serves all people and that, while he personally believes in the biblical definition of marriage, his company doesnt have an anti-gay agenda. And back in 2002, a former employee of a Houston Chick-fil-A sued the chain for discrimination. The employee, who was Muslim, alleged he had been fired because he refused to pray to Jesus with other employees. The suit was settled out of court.

These controversies also shined a light on the fact that the Cathys regularly made donations to charities known for discriminating against LGBTQ people.

In 2011, the same year a Pennsylvania Chick-fil-A franchise donated food to a local anti-gay organization, the LGBTQ advocacy group Equality Matters obtained tax records which revealed that the Cathy family had donated more than $1.9 million to anti-gay groups in 2010 through the WinShape Foundation, the Cathy familys charitable giving organization founded by Truett Cathy in 1984. Those donations included a $1.1 million gift to the Marriage & Family Foundation, a group that promoted so-called traditional marriage and opposed both gay marriage and divorce; $480,000 to the Fellowship of Christian Athletes, an athletic organization that requires applicants to agree to a sexual purity statement that condemns LGBTQ people for living impure lifestyle[s]; and $1,000 to Exodus International, a group that promotes anti-gay conversion therapy.

For Chick-fil-As opponents, the problem was bigger than Cathys anti-gay comments, it was that he was apparently putting his money where his mouth was, and he had a lot of money to go around.

Petitions and boycotts didnt hurt Chick-fil-A the chain continued expanding across the country despite peoples opposition to the Cathys views on marriage but they did potentially contribute to making the Cathys somewhat less vocal about their political beliefs.

In a 2014 interview with the Atlanta Journal-Constitution, Cathy admitted he regretted getting involved in the gay marriage debate. Cathy didnt claim to have regretted what he said, just that he said it. I think the time of truths and principles are captured and codified in Gods word and Im just personally committed to that, he said at the time. I know others feel very different from that and I respect their opinion and I hope that they would be respectful of mine. ... I think thats a political debate thats going to rage on. And the wiser thing for us to do is to stay focused on customer service.

Chick-fil-As controversies somehow havent been bad for business, but they are bad PR

Though Chick-fil-A never managed to fully shed its reputation as a homophobic purveyor of delicious chicken sandwiches, it continued to expand its national presence, especially above the Mason-Dixon line. New York Citys first Chick-fil-A, a 5,000-square-foot behemoth in Midtown, opened in 2015. (It was met with resistance by locals but opened anyway.) Three years later, Chick-fil-A added another New York City location, a five-story, 12,000-square-foot restaurant that, according to ABC News, is nearly twice the size of any existing Chick-fil-A. (This location, like many other Chick-fil-As across the country, is an independently owned franchise. It is not open on Sundays.)

By the end of 2018, Chick-fil-A was slated to overtake Subway and become the third-largest fast-food restaurant in the country after McDonalds and Starbucks, according to a report by Kalinowski Equity Research. Its reportedly the most profitable fast-food chain in the country on a per-location basis, and has been the number one fast-food restaurant on the American Customer Satisfaction Index for three years in a row.

In a 2017 interview with Morning Consult, Thomas Ordahl, chief strategy officer of the brand consulting firm Landor, succinctly explained how Chick-fil-A has been able to weather these constant controversies. Whats interesting about the paradox of Chick-fil-A is that, in many ways, its probably one of the most socially advanced companies in terms of treatment of employees and its role in the community, Ordahl said, and yet its founder has a position that is quite dissonant with most people in the U.S.

As Rachel Sugar previously wrote for The Goods, part of Chick-fil-As popularity is due to a pretty simple fact: people eat there because they like the food, even if they dont like what the Cathys stand for.

The Cathys dissonant view, as one brand consultant called it, may have finally hurt Chick-fil-As bottom line especially now that a popular, non-homophobic alternative to Chick-fil-As sandwiches has emerged. Earlier this year, Popeyes temporarily began selling chicken sandwiches at its locations across the country. The sandwiches were so popular that the chain declared a national shortage in August.

Popeyes sandwiches are now back for good, and a promotional video announcing their return even made fun of Chick-fil-As long standing policy of keeping all its locations closed on Sundays.

he popularity of Popeyes sandwiches means Chick-fil-A no longer has a virtual monopoly of the chicken sandwich market, but increased competition doesnt entirely explain why the company is finally changing its philanthropic giving plan. Its also possible that the Cathys politics are finally hindering the companys expansion.

In July, Texas Gov. Greg Abbott signed a controversial piece of legislation that supporters dubbed the Save Chick-fil-A bill. The law, introduced in response to the San Antonio City Councils decision to remove a proposed Chick-fil-A location from its airport concession agreement, forbids government entities from taking adverse actions against businesses because of their religious beliefs or actions.

San Antonio may not have fully succeeded in kicking Chick-fil-A out of its airport, but the citys decision seems to have sparked a new wave of backlash to Chick-fil-A. In September, the airport concession company Delaware North kicked Chick-fil-A and a few other big chains out of the Buffalo Niagara International Airport in favor of local restaurants.

Across the pond, protesters managed to get the landlord of a Chick-fil-A location in Reading, England to opt out of renewing the chains lease just 8 days after it had opened. (A Chick-fil-A spokesperson told VICE that the lease was never supposed to last longer than six months.)

Martin Cooper, the head of Reading Pride, told a local publication that the Cathys charitable giving influenced the groups opposition to the restaurant.

Were here to inform the community in Reading what has been allowed to set up in our town. Its a business based on anti-LGBT beliefs, Cooper said. If it was just beliefs, we probably wouldnt be here protesting. Its about the active engagement and where their profits are going.