While Chick-fil-A is one of the hottest restaurant concepts in the business right now, don’t expect an IPO any time soon.
Before the chicken chain’s founder and longtime CEO died in 2014, Truett Cathy reportedly set up a contract with his children that said they may sell the privately-owned chain in the future — but Chick-fil-A could never go public.
Why was Cathy so anxious to keep the company private? One reason may be the founder’s dedication to maintaining the company’s religious roots. While Chick-fil-A says it is open to employees and franchisees of all faiths, the company mission statement is “To glorify God by being a faithful steward of all that is entrusted to us. To have a positive influence on all who come in contact with Chick-fil-A.” That’s a message that may need some adjustments if the company is publicly owned.
Chick-fil-A maintains a unique culture — and has found success by doing so. Going public could mean changing many of the things that Chick-fil-A considers integral to its identity, such as ending the practice of closing on Sundays.
Cathy apparently had personal reasons for wanting the company to remain private as well.
“I’d be resentful if shareholders who don’t know the business tried to tell me what to do,” he told the New York Times in 1996. Others said that Cathy would feel obligated to return losses to shareholders who lost money.
It’s hard to say how binding Truett Cathy’s contract is (Chick-fil-A did not respond to request to comment on the story). In the ’90s, Dan T. Cathy, Truett’s son and current president and CEO of the company, was reportedly open to going public one day. He also wanted to speed up expansion — something he has certainly done since taking over the company in 2013.
However, for now, Chick-fil-A remains a family-owned business. In addition to Dan’s role as president and CEO, Truett Cathy’s other son, Don (nicknamed “Bubba”) is the senior vice president, as well as the president of Cathy’s first concept, Dwarf House.
The tradition has the potential to carry on to the next generation. Andrew T. Cathy — Dan’s son the eldest of the 12 grandchildren — is currently the company’s chief people officer and senior vice president. If the family continues to respect Truett Cathy’s wishes, it may be Andrew and other grandchildren, not shareholders, who own Chick-fil-A in the decades to come.
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