Everyone knows the tale of the poor boy who works hard, grows up, and, against the odds, achieves fame and fortune while remaining true to the virtues—courage, honesty, character—that got him there. This is the Horatio Alger story, and it has become embedded among the patriotic ideals that Americans cherish. Whoever wrote the story of S. Truett Cathy has come up with a tale that is as fascinating as anything that Alger ever came up with (and Cathy’s story has the added advantage of being true).
S. Truett Cathy, now 77 years old, is the founder and Chairman of Chick-fil-A, a $672 million fast-food company based in Atlanta and famous for its Chick-fil-A fried chicken sandwich. He is also a respected philanthropist who is committed to using the great gifts that God has bestowed upon him—Cathy, a Southern Baptist, is a strong believer in the concept of stewardship—to help children who come from unfortunate circumstances make something of themselves. Cathy is also a very humble man who, unlike another prominent Atlanta-based philanthropist, prefers to let his actions speak louder than his words.
Eight-Year-Old Capitalist Tool
Truett Cathy always knew that he would be in business. “I seemed not to excel at anything else. The dollar marks were more interesting to me than A’s on a report card.” In 1929, Cathy, all of eight years old, would head out in the morning and buy bottles of Coca-Cola from the local grocery store. He would buy six for 25 cents and then sell them for five cents apiece from a booth he had constructed in front of his house, giving him a tidy five cent profit. As business picked up, he learned to flag down the delivery truck as it came through town, from which he could buy a case for 80 cents, giving him a 40 cent profit. He eventually expanded the menu to include Orange Crush and Nu Grape. During the winter months, when ice-cold Coca-Cola was a tough sell, Cathy would sell magazines door to door.
In 1929 the stock market collapsed and Cathy’s father, an insurance salesman, lost his business. Cathy’s mother turned the family home into a boarding house to help make ends meet. All the family members, including all seven children, pitched in. “I learned to shuck corn, shell peas, wash dirty dishes, set the table, shop for my mother at the corner grocery store, and even flip eggs and pancakes on the grill,” Cathy writes in his memoir, It’s Easier to Succeed Than to Fail.
For the eight-year-old budding entrepreneur, selling Cokes and copies of the Saturday Evening Post was fine for a while. At age twelve, Cathy took on a paper route, delivering papers for the next seven years until 1941, when he was drafted into the Army. Cathy spent most of the war stateside, but his younger brother Ben wasn’t so lucky, and spent most of the war in Europe in a unit that suffered 80 percent casualties.
The Dwarf Grill
Both Cathy brothers were honorably discharged from the Army in 1945. Young and single, with no financial obligations, they discussed starting a business. After spending seven weeks working in a restaurant, they decided that they had found the business for them. Their restaurant would be open six days a week, 24 hours a day, and would serve food that could be prepared on a grill—burgers, steaks, fries, and breakfast food. They estimated that they would need about $10,000 to get up and running. After pooling their savings and the proceeds from the sale of Truett’s car, they had $4,000. With the war over, banks were eager to sign up new customers, and the Cathy boys were able to obtain a loan of $6,600. “We thought, gee, for $10,600 you could buy any part of the world you wanted.” They purchased a 50’ by 150’ lot in the Atlanta suburb of Hapeville, near the site of a new Ford plant, which would provide them with plenty of hungry customers.
The restaurant—they named it the Dwarf Grill because of its small size—opened in May of 1946 and was an immediate success (the Ford plant provided more customers than they could handle). “I won’t ever forget the day we turned on the neon sign that proclaimed ‘Dwarf Grill.’ As I looked at those red letters beaming back at us, it was the proudest moment of my life. It’s our place, I kept thinking. We own it.” The next few years were a period of intense hard work and education in running a business. In September of 1948, Cathy would marry a young woman named Jeannette McNeil.
Then, in July 1949, Ben and the third Cathy brother, Horace, were killed in a plane crash. Truett was crushed, but persevered. A year later, he bought out Ben’s share of the Dwarf Grill from Ben’s wife and in 1951, he opened a second restaurant. For the next decade, both restaurants did very well and kept Cathy (and his three children) very busy.
Then, on a cold winter night in February of 1960, Cathy was awakened to the terrible news that the second restaurant was on fire. Cathy knew that he didn’t have enough insurance and was worried that he wouldn’t have enough money to rebuild. Worse still, the day after the fire Cathy fell ill, only to be diagnosed with colon polyps. Eventually, he would undergo two operations to correct the problem.
Fast Food Heats Up
By the time of his convalescence, Cathy was toying with the notion of creating a quick-service restaurant. He “didn’t like cooking food ahead of time” but “knew our nation was increasingly time conscious and would soon demand such service.” To do a little research, he took a trip to Chicago to study the Li’l Abner Restaurant chain at work. (In 1954, in San Bernardino, California, a middle-aged entrepreneur named Ray Kroc would visit the restaurant run by Richard and Maurice McDonald. Kroc was impressed. He had never seen so many people served so fast. He talked the brothers into giving him exclusive rights to franchise the idea. You know the rest of the story.)
Cathy rebuilt the burned-out location as a drive-in restaurant serving fast-food, but customer response was so poor that he leased the place to another local restaurateur who had somewhat better luck (in fact, he opened Georgia’s first Kentucky Fried Chicken at the location).
Back at his original location, Cathy tried serving a chicken breast sandwich as an experiment. It was popular enough that he added it to the menu. The problem was that chicken took more time to prepare than the other foods, which slowed service. Through some further experimentation, he discovered that by removing the skin and bone from the breast, he could cut the cooking time in half. “Then I recalled that my mother had cooked chicken in an iron skillet with a lid and served it to our boarders. It held the steam inside, speeded up the cooking, and left the chicken juicier.” So he developed a fryer with a lid that speeded up the process even more. Cathy spent months up to his elbows in flour and spices, perfecting the secret seasoning that was used to coat the chicken. Using some of his long-time customers as guinea pigs, he would serve the final product on a toasted, buttered bun with a pickle.
The new sandwich was a very popular menu item from the beginning, and would eventually outsell hamburgers. In 1964, Cathy decided to promote the chicken sandwich using a trade name. By melding together the words “chicken” and “fillet,” he came up with “Chick-fil-A.” Within a few months, he had signed up almost 50 restaurants to carry his new sandwich. He made arrangements with a restaurant supply company to build machines to cook his chicken just the way he liked it. Cathy reports that within a few years he was approached by McDonalds executives. Unfortunately (or fortunately, depending on your point of view), they decided against buying into the new company. “None of those chains woke up to the idea until some 15 years later when Chick-fil-A was generating annual sales in excess of $100 million,” Cathy writes.
Never on Sunday
Business was booming, but Cathy was distressed that others didn’t take as much care in the preparation of his sandwich as he did. So he decided to go into the Chick-fil-A restaurant business himself. But instead of selling franchises, a la McDonalds, Chick-fil-A would enter into joint ventures with independent operators, who would be carefully vetted by the company. They would open only in shopping malls, which, though now ubiquitous, were something of a novelty at the time. The first Chick-fil-A restaurant opened in 1967. As of the end of 1997, Chick-fil-A had 763 location in 35 states and two locations in South Africa, with sales of $672 million. The chain aims to be doing $1 billion in sales by the year 2000.
Virtually every article ever written about Truett Cathy or Chick-fil-A mentions the fact that, without exception, the restaurants are closed on Sundays. The same was true of the Dwarf Grill from the moment it opened. Cathy feels very strongly that Sunday is the day that the Lord gave to man to rest and replenish himself and he likes to work with people who share this conviction. “People who take a day off to worship the Lord and to refresh themselves spiritually and physically are the kind of associates we seek.” He has other, more pragmatic, reasons. When Ben and Truett were starting out, they worked so hard that they would have collapsed if they didn’t have that day to themselves. “After the first week, I determined that if it took seven days a week to make a living, I should be in some other business.” Not only that, but “on Sunday I did my courting.”
“I Might Lose My Job”
Chick-fil-A is a privately held company and will remain so as long as Cathy has anything to say about it. This may seem odd at first; if Chick-fil-A did go public, the stock he would receive would make him fantastically wealthy. But Cathy has other priorities. He spends a lot of money each year—his own and Chick-fil-A profits—and quite a lot of his time in support of several philanthropic endeavors that he feels quite strongly about. If he had stockholders he was accountable to he doubts they would let him spend quite so much. “I would get a lot of criticism for taking it off the bottom line. If I went public, I might lose my job.”
While Cathy didn’t have much use for school while he was coming up, he has an abiding faith that education improves people and broadens their horizons. In 1973, Cathy instituted a scholarship program for Chick-fil-A employees who planned to attend college. They offer $1,000 scholarships to employees who have worked for the company for at least two years and who work at least 20 hours a week to attend the educational institution of their choosing. In 1997, Chick-fil-A awarded scholarships totaling $809,000. All told since 1973, they have given out more than $13 million worth of scholarships.
Cathy is visibly moved by the plight of children in our country today. “The number one problem in America today is unloved children,” he says. Whatever its causes, the solution, at least according to Cathy, is not all that complicated. “The best gift a mother and dad can give to their children is to love each other and live under the same roof.”
The roots of Cathy’s desire to help children run deep, to his own childhood and the mentoring relationship he enjoyed with Theo Abbey, a successful Atlanta businessman and Cathy’s Sunday school teacher. Abbey, who had four children of his own to take care of, always made time for young Truett. “He was a very dedicated Christian, a good father, a good teacher, and a good businessman,” Cathy says, a description that fits Truett Cathy pretty well too. “I never had a close relationship with my father. So I guess the Sunday school teacher was a role model for me and made me faithful to my church and Sunday school.”
Cathy began teaching Sunday school at his church more than 40 years ago and is still at it. He likes to teach 13-year-old boys. He considers that age to be a crucial one, the last chance to get at them before teen angst drowns out everything else. He wryly comments: “Children will do as their parents say until about the age of 14; from then on, they usually do as their parents do.”
In 1982, Cathy was invited to give a talk to the students and faculty of Berry College in Rome, Georgia, which sits a few hours north of Atlanta on 28,000 acres of Georgia countryside. He was deeply impressed by the school and the quality of the students. About a year later, he would learn that, due to rising costs and declining enrollment, the college had been forced to close its academy, a boarding school on the college campus for students from grades five through twelve. Cathy was saddened by this and he decided to pay another visit to the school, which served to reinforce the positive impressions he had taken away with him from his first visit.
Then he decided to offer to use the academy facilities for Chick-fil-A scholarship awardees who chose to attend Berry College. (The scholarships would also be open to all young people who were admitted to Berry College and fulfilled certain financial criteria.) From his idea grew a broad plan that included the facility for Chick-fil-A scholarship awardees, a summer camp for boys and girls, and a foster home for kids. All these ideas would come to fruition under the auspices of a new institution that Cathy dubbed the WinShape Centre (for “shaping winners”). He then set up a foundation—the WinShape Foundation—of which Chick-fil-A was the primary benefactor, and set to work.
In the 1984-85 school year, the WinShape Centre enrolled 68 students. The $10,000 scholarships it awarded were paid for half by Chick-fil-A and half by Berry College. The grants were designed to provide the most help up front, declining by $2,500 for each year a student remained in school. Cathy, who worked while he was in school, believes that all young people ought to do the same. “The scholarship arrangement helps young people without doing everything for them. They need the most help to get started in college. Once started, they can usually find a way to keep going.” In the 1997-98 school year, 120 students enrolled at the WinShape Centre.
In the Summer of 1985, the Centre inaugurated a summer camp for boys ages seven through sixteen. Cathy came up with the theme: “It’s better to build boys than to mend men.” The camp would keep them busy from dawn until dusk with all sorts of games and activities. In the Summer of 1987, Camp WinShape expanded to admit girls (though the camps were kept separate). Some 116 girls participated in the first year, 232 in the second. Now, over 1,500 boys and girls attend Camp WinShape each summer.
Call Me Grandpa
Cathy also had a deep desire to provide a long-term home on the campus for a small group of promising boys and girls from unfortunate family circumstances. He had a 5,000 square foot house built on the campus. A married couple would live there to provide a familial environment and to be role models for the children. Today, they have eleven WinShape Homes (Cathy dislikes the phrase “foster home”) with twelve children in each. Cathy refers to the children as his “grandchildren,” and they’re encouraged to call him “grandpa.” Cathy says he tells them, “You don’t have to call me grandpa. But those who call me grandpa get more than the rest of you do.” He takes his responsibility for these children so seriously that he is the legal guardian for twelve of them (and has been for several more).
Everyone involved in the WinShape Homes is in it for the long haul. That means that the relationship doesn’t end when the children turn 18. “We don’t throw them out at 18. We help in career planning and make sure their future is taken into account, just like a real family would.” If they need braces, or have medical problems, Cathy sees that they are taken care of. He has had small cottages built alongside two of the homes, so that he has a place to stay when he comes to visit. He likes to read the children stories and rock them to sleep at the end of a long day. “They’re not accustomed to anything like that.” Cathy also has a big summer home in Florida, and all the children come down and spend some time with him there. A few years ago, Cathy had a goal of opening a new WinShape Home each year. More recently, he’s become more circumspect. “I’m going to try to do better what I’m already doing.” Cathy is fond of telling stories about the wonderful young children who have been fortunate enough to come to his attention. He also understands that sometimes, no matter what he does, it doesn’t seem to help. “There are a lot of disappointments in working with young people. You have to be prepared for that. But there are enough rewards that motivate me to keep doing what I’m doing.”
And those rewards are substantial. Cathy has said that starting the foster homes has been the most rewarding thing he’s done. And, as a local newspaper once put it, it’s all made possible by “this miraculous little $2 chicken sandwich.”
John W. Barry is a graduate student at the Indiana University Center on Philanthropy and a frequent contributor to Philanthropy.