Tuesday, April 8, 2014

Chick-fil-A IPO?

The Chick-fil-A founder says he wants to go back into the closet with his views on Gay Marriage.   Could this be a signal than an IPO is in the making?

Owning a company sounds like a swell deal, until you realize that you have all your money invested in one thing, and with one misstep, you can lose it all.  People might decide they no longer like your donuts, your square hamburgers, your roast beef sandwiches, or your whoppers, and a fast-food chain can go from "hot" to "not" in a real hurry.

If you doubt this, ask the folks at Krispy Kreme, Wendys, Arbys, or Burger King.   Their fortunes have waned as of recently, and the chains struggle to "turn around" their businesses.

The other problem with owning a big company like that is you can't spend the money.   Sure, Mr. Cathy, the founder of Chik-fil-A has like $7 Billion in net worth - but most of it is in the company he owns.  That goes south, and he is toast.   And if he wants to spend any of it, he has to use the profits or borrow against the value of the company.  Both ideas limit his spending options.  He has a lot of wealth on paper, but not in terms of spending power.

And as he gets older, well, he has to think about what happens when he dies.  Do the kids inherit the company?  What about the grandkids?   Suppose some of those kids don't want to own a slice of the company - and want to be bought out?   Their siblings may not be able to afford to do so.

So, maybe "going public" is a swell idea.   After all, those evangelical Christians and right-wing bigots have demonstrated that they will buy any half-assed investment idea, including gold, ammunition, and bunkers.  So right off the bat, you've got a captive investment audience.

Oh, but those pesky protesters - cutting into profits!  And all at a time when you want to expand into regions other than the redneck South.   You see, the company wants to open more stores in places like Chicago and New York, and in big cities, being bigoted and Closed-On-Sundays just isn't going to cut it.

Mr. Cathy also realizes that the younger kids (the so-called "Millennials") vote with their pocketbooks, and buying Redneck-Fil-A isn't seen as "cool" by those kids.

So, Mr. Cathy announces a new, Politics-Free Chick-Fil-A (no more side order of Hate!) and new exciting menu items in its place.  Maybe this will get those pesky Millennials (but not their icky Gay friends) to buy some waffle fries!

But of course, you have to wonder if people are really stupid enough to believe that just because someone stops talking about their beliefs, they still don't have them - and that they will use your money to advance social causes that may or not be aligned with your interests.

Frankly, I don't think it will work.  But then again, people are stupid.

But again, an IPO helps solve this problem.   In order to survive in the fast-food business, you have to grow-or-die.  And being closed Sunday and not serving markets like all the Blue States, just isn't going to work.  They have to expand into new markets, nationwide and overseas.  They will have to have airport franchises that will be open when people are traveling - and that includes Sundays.

(Speaking of which, can you imagine how our country would operate if every business had Mr. Cathy's mentality?  No gas on Sunday.  No airports open Sunday.  No emergency services on Sunday.  No hospitals on Sunday.  Hey - it's the Lord's commandment!  Unless you are Jewish - then it is Saturday, or Muslim, then it is Friday.   As George Carlin said, "God gets a 3-day weekend!   The Chik-Fil-A "Closed on Sunday" nonsense only works because other companies are open.   So in the Atlanta airport, they can close, and you can go somewhere else to eat.  But if everyone did this, it would be unworkable.  So, Mr. Cathy is being a bit selfish here, and relying on others to take up the slack.  Frankly, I don't think a Chick-Fil-A should be allowed in public franchise locations like an Airport or a Thruway rest stop, if they are not going to serve the public.   Award the franchise to someone else who will.  That should be a term of the lease agreement!)

As an "independent" company listed on the stock exchange, however, Chick-Fil-A can wash its hands (like Pilate?) of the controversy.  "We're an independent company!" they can say, and the founder's beliefs and message can be conveniently stripped away - leaving him with only, say, ten or twenty billion dollars in inflated IPO stock - maybe more.

History has shown than companies can recover from their bonehead founder's views.   Coors, for example, was boycotted when the Coors family was shown to funding a lot of anti-gay right-wing causes.   After a while, they realized that Gays drink a lot of lite beer in bars, and they were losing a lot of business.   Coors caved in, and pretty soon, they were the largest advertiser in many Gay publications.   They went from boycotted to favorite brand, nearly overnight.

Who knows?  The same could happen to Chik-Fil-Gay.  The drag queens in the video above seem to like it!

(By the way, that video would be a refreshing change from the stupid "Eat More Chikn" cow campaign.   I mean, fire your ad agency!  The cow thing just isn't funny anymore.)

Of course it goes without saying that all fast food is overpriced, not "fast" and horrifically bad for you.   Just don't eat fast food, period!