After a truly baffling decision by its CEO to demand the removal of Pride flags and other flags from all of its stores, Philz Coffee will go back to allowing the flags, and the CEO has issued an apology.
As ABC 7 reports, one week after making the controversial decision to have flags removed from stores because they weren't "inclusive" enough, and just days after writing an internal memo that seemed to show him digging in his heels on the matter, CEO Mahesh Sadarangani has reversed himself.
In a statement, Sadarangani says, "I made a mistake, and I am sincerely sorry. To our Team Members, to our customers, and to the LGBTQIA+ community that has been with us since the very beginning, the confusion and hurt we caused around our new policy for Pride flags failed you."
It does not seem that the flag-removal process had actually begun since last week's confusing public announcement, however Sadarangani now says, "I want to be clear about where Philz stands: our Pride flags are staying up. If a Pride flag came down, it can be put back up."
Whatever prompted Sadarangani to launch his odd crusade against the flags, eight months after Philz was acquired by a private equity firm, remains unclear. Sadarangani had said that the policy change was made because "everyone who walks through our doors deserves to feel welcome and safe." The implication here was that someone somewhere was feeling unsafe because of a Pride flag, in one or more of Philz's mostly California-based coffeeshops.
But Sadarangani apparently came to realize what a poor business decision this probably was. And now he's framing it as a revelation he had after meeting with SF Pride Executive Director Suzanne Ford and the organization's Board Secretary Jupiter Peraza.
"The Pride flag is a symbol of safety and belonging for people who don't always find that in the world, and that is not something I want to take away from anyone who walks into a Philz," Sadarangani now says. "I had the chance to sit down with San Francisco Pride leaders Suzanne Ford and Jupiter Peraza, both are trans women who led this conversation with grace, directness and a genuine commitment to finding alignment on what matters."
He adds, "Going forward, each of the company's 82 stores, representing 82 unique communities, will also feature locally created artwork shaped by the voices of Team Members and the neighborhoods they serve, a living expression of the diverse communities Philz is proud to be part of."
This is also different from the artwork idea Sadarangani had mentioned in the internal memo earlier this week, which had discussed the creation of a single piece of "unifying" artwork that would be created with employee input, and that would then be displayed in all Philz stores.
Ford was quick to respond to the Philz controversy last week, pointing out the particular pain of having a Philz location the heart of the Castro which was chock-full of rainbow decor, which would now have to abide by this new policy.
"There’s also a real frustration that comes with being a queer person right now," Ford said, speaking to KRON4. "That’s what makes moments like this one sting. It may seem small, but removing a Pride flag sends a message, and for many in this neighborhood, it feels like another blow right at home."
If I were the private equity firm I might be questioning the competence of this CEO right about now, after this utterly unnecessary gaffe that has done massive PR damage to the brand in its own hometown. But, as far as the boycott threat goes, mission accomplished.
Top image: Philz Coffee storefront on a sunny day with logo signage on concrete building exterior, San Francisco, California, February 5, 2026. (Photo by Smith Collection/Gado/Getty Images)
