Chick-fil-A’s New Donor Strategy Reopens Pathway To International Expansion
When Chick-fil-A opens its second Canadian location in January at Oxford Properties’ Yorkdale Mall, the Atlanta-based chain will face a key test. It will be the company's first international location to open since Bisnow first reported in November plans to halt donations to organizations perceived as anti-LGBTQ.
The chain’s first Toronto opening attracted more than 100 LGBTQ and animal rights protestors in September. The Yorkdale Mall opening gives the company a chance to see if its new message has moved the needle with international audiences.
Some of Chick-fil-A’s detractors are optimistic because of the chain’s new charitable tone, but it still hasn’t won over all its Canadian critics.
“It’s tough. There are still always going to be consumers who are unaware of the brand, and that’s certainly great for Chick-fil-A. There’s not a lot of competition here for fried chicken,” said Avni Shah, a marketing professor at the University of Toronto Scarborough. “But, even considering they're rolling back donations, a lot of people think they’re obviously just doing this as a marketing ploy.”
When a Chick-fil-A was under consideration as part of a concessions overhaul at Buffalo Niagara International Airport in March, New York Assemblyman Sean Ryan (D-Buffalo) argued a publicly financed facility was not the appropriate venue for Chick-fil-A. Concessionaire Delaware North canceled plans for the Chick-fil-A later that month.
But following the chain’s announcement, Ryan said he is open to changing his stance.
“As long as what they say will happen is what happens going forward, then we won’t have a problem,” said Ryan’s spokesperson, David Thompson. “If they live up to it, we will support the positive development.”
Chick-fil-A has become the third-largest U.S. fast-food chain this year with $10.5B in sales, according to Nation’s Restaurant News data. While revenue continues to grow, the chain had a rough 2019 from an optics standpoint after politicians pushed against the chain being included in concessions contracts at three U.S. airports, including the one in Buffalo.
The Toronto protest followed. In October, a mall in Reading, England, announced eight days into a Chick-fil-A pop-up lease it would not renew with the chain.
The international criticism stemmed from Chick-fil-A’s years of donations to the Fellowship of Christian Athletes and Salvation Army, which LGBTQ groups criticized in the past for their stances against homosexuality.
Whether its charitable shift is a PR stunt or an attempt to genuinely court LGBTQ customers, Chick-fil-A is making progress with voices that hindered its airport expansion.
“Everybody is going to pay attention to their financial statements and donations,” said former Santa Clara County Supervisor Ken Yeager, who spearheaded an effort to place flags for the LGBT and transgender communities near the Chick-fil-A at San Jose’s airport. “All of us are hoping it’s the case it’s a more enlightened company, but only time will tell.”
The Battle For 'Pink Money'
The decision to stop giving to the FCA and Salvation Army is part of a broader initiative to reduce Chick-fil-A's charitable recipients from more than 300 organizations to three, centered around education, homelessness and hunger. None of the new groups have anti-LGBTQ language in their organization materials.
“There’s no question we know that, as we go into new markets, we need to be clear about who we are,” Chick-fil-A President and Chief Operating Officer Tim Tassopoulos told Bisnow in November. “There are lots of articles and newscasts about Chick-fil-A, and we thought we needed to be clear about our message.”
More companies have made splashes at LGBTQ events like Pride Month in June. WeWork hosts Pride brunches. Brokers from JLL march in Pride parades. Cushman & Wakefield highlights many of its LGBTQ employees during the month of June.
But Chick-fil-A’s changed tone still may not be enough in a place like Canada, which is seen as more LGBTQ-friendly than the U.S.
“Toronto is one of the top cities in the world for being LGBTQ-friendly. Even if you don’t identify that way, there’s just an inclusive sense and awareness in the population,” Shah said. “OK, you’re no longer doing something against the community, but what are you doing for this community?”
The group leading the first Toronto protest said it appreciates Chick-fil-A’s changed tune, but it doesn’t plan to stand down.
“Chick-fil-A’s most recent revelation suggests that the pressure of protests and boycotts are having an effect,” said Soofia Mahmood, spokesperson for LGBTQ rights group the 519, in a statement to Bisnow. “We need to continue our activism to ensure that changes in their philanthropic practices are followed by changes to their employment practices and an increased effort to demonstrate their commitment to LGBTQ2S human rights. Anything less is unacceptable."
Chick-fil-A declined to comment for this story, and Oxford Properties didn't make anyone available for interview ahead of the Yorkdale Mall location's opening.
“Yorkdale Shopping Centre is a customer-led business and frequently introduces widely anticipated and popular brands,” an Oxford spokesperson said in a statement to Bisnow. “This brand’s arrival has been widely anticipated.”
The Blue State Welcome Mat
Chick-fil-A has expanded in recent years beyond its Southern roots into liberal markets. While the chain has successfully added stores in Chicago, Portland and even New York City — where the Stonewall Riots birthed the modern LGBTQ rights movement — it was only recently that Boston backed down from a late mayor’s Chick-fil-A blockade.
After Chick-fil-A CEO Dan Cathy voiced his opposition to same-sex marriage in 2012, then-Boston Mayor Thomas Menino said he would never allow the chain to open within Boston city limits. The Northeastern University Student Government Association voted that same year to block Chick-fil-A from opening a franchise on the school’s Boston campus.
But even Massachusetts, the first state in the U.S. to legalize same-sex marriage, has come around to Chick-fil-A. The chain has 15 Bay State restaurants, according to its website. It also plans to open next year its first location in Boston proper, seven years since Menino instated his ban.
“We steer clear of taking a stance on the neighborhood’s retail tenants’ political takes because, if you looked into it, everyone usually has something we don’t agree with," said Meg Mainzer-Cohen, president and executive director of the Back Bay Association, a business group in the neighborhood where Boston's first Chick-fil-A will be.
Hammerson, the owner of the mall in Reading, England, where Chick-fil-A’s six-month pop-up lease isn’t expected to extend, declined to comment for this story. But a second U.K. Chick-fil-A, at a resort in the Scottish Highlands, opened in October and hasn’t garnered the same level of protest.
Lee & Associates Managing Principal Peter Braus, a Manhattan-based retail broker, thinks more left-leaning parts of the U.S. have come around to Chick-fil-A because it has brand awareness beyond the LGBTQ headlines. While many Americans are familiar with its controversial donations and Cathy's statements, they also associate the company with quality food and a high level of customer service, even to the LGBTQ community.
An Orlando Chick-fil-A famously broke the company's closed-on-Sunday rule in 2016 to provide food for first responders at the mass shooting at Pulse, an LGBTQ night club.
“Americans tend to have a short memory when it comes to this stuff,” Braus said. “Most New York landlords see green, especially now. If someone comes in willing to spend a lot on rent, there are a lot of landlords willing to overlook politics.”
In international markets where there isn't as much fried chicken — but there is awareness of Chick-fil-A’s past controversies — Chick-fil-A has to hope it can win the trust of those communities.
“I find it hard to believe they can expand to these markets without taking a closer look at who they are,” Shah said. “In some of these international markets like Canada, there is more LGBTQ tolerance and expectation of allies than what you see in the U.S.”