July 31, 2012

Chick-fil-A heirs reach ranks of billionaires

Bloomberg News

BOSTON - Chick-fil-A Inc., the Atlanta-based fast-food chain feuding with gay-rights advocates over its stance on marriage, has served up two hidden billionaires.

click image to enlarge

Chick-fil-A founder S. Truett Cathy, left, and his son Dan Cathy are shown in 2009 at the company’s headquarters in Atlanta. Dan and his brother Don Cathy run the chicken sandwich chain.

The Associated Press

The two sons of S. Truett Cathy, the chicken sandwich empire's founder -- Dan Cathy, 59, and Donald Cathy, who is known as Bubba -- have joined the ranks of the world's richest, according to a report published Tuesday by PrivCo, a New York- based research firm that specializes in private companies' financial data.

The report values Chick-fil-A at $4.5 billion. Dan Cathy, the company's president, and Don Cathy, its executive vice president, each own a third of the restaurant chain, according to a person familiar with the company who asked not to be named because it is closely held. Neither has appeared on an international wealth list.

"The sons have been involved in running the company for many years," said Kenneth L. Bernhardt, a professor at Georgia State University's business school and a long-time consultant for Chick-fil-A, in a phone interview. "Dan has had just about every job there is in the company, with a strong focus on operations. Bubba focuses a very large percentage of his time on the company's philanthropic efforts."

Gay-rights groups have urged a boycott of the chain and mayors of cities including Boston and San Francisco have spoken out against the company after Dan Cathy took a position against same-sex marriage.

Chick-fil-A generated $492 million in earnings before interest, tax, depreciation and amortization on revenue of $1.12 billion in 2011, the PrivCo report said.

The chain has the biggest sales per unit in fast-food, according to QSR Magazine. In 2011, the company generated gross sales of $2.9 million per location, outpacing the average unit sales of runner-up McDonald's by $400,000, the magazine said.

As of Jan. 1, Chick-fil-A said it had a total of 1,615 outlets, the majority of which are franchised, according to PrivCo. The company also operates full-service restaurants under two other brand names, Truett's Grill and Dwarf House.

The company paid a $191 million dividend to the Cathy family in 2011, the report said.

 

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