Philz Coffee doubles down on removing Pride flags despite backlash

After incurring backlash and national press coverage over its decision to remove Pride flags from its cafés, San Francisco-born Philz Coffee doubled down on the policy and provided more details about it in a confidential memo sent to employees Friday that was obtained by the Chronicle.

The memo from CEO Mahesh Sadarangani was printed on company letterhead marked "confidential." It references Sadarangani's visits to stores in recent weeks to talk about "changes to our store decor & flags" and reiterates that the new policy "may include removing a variety of flags and other decor."

Sadarangani did not apologize for the flag policy in the memo, but expressed some regret for how it was communicated, writing, "We hear and deeply understand that we did not handle changes to store decor as well as we should have, especially as true allies to the community. Some of our team members have shared that those changes felt personal."

A manager at a San Francisco Philz location said they were "blindsided" by the decision and unaware of it until it was made public by the Chronicle. The employee asked to remain anonymous because they were not authorized to speak publicly and feared repercussions.

Philz did not immediately respond to questions about the timeline for removing flags or comments Sadarangani made in the memo.

The memo also describes the company's plans for a new "unifying" piece of artwork that would apparently be placed in every store. "Over the last year, we have been working on custom Philz artwork to set the expectations for a safe and inclusive space for all, including our LGBTQIA+ community," it reads. "We want one piece of artwork that unifies all of Philz, that openly showcases our commitment to honoring the uniqueness and diversity of each person who enters our place."

Philz staff will be involved in the development of that artwork, according to the memo. "You will have the opportunity to participate in the selection process so that the piece is truly a collaboration of us as a collective whole."

Sadarangani reiterates in the memo that the company is not "mov(ing) away from supporting the LGBTQIA+ community," detailing a number of forthcoming initiatives. For Pride month, Philz will continue to donate to LGBTQ+ organizations and it will hold a "second annual" company sticker contest to which employees can contribute artwork. Philz will also continue to have a committee for DEIB or diversity, equity, inclusion and belonging, "including those in the LGBTQIA+ community," the memo reads.

Pride flags remained in place in the Castro store and at least one other San Francisco location on Wednesday.

On April 8, Philz Coffee confirmed to the Chronicle that it would remove Pride flags from all of its locations after an online petition against the policy began circulating on social media. The backlash was swift, with people expressing outrage on social media, especially over a statement from Sadarangani saying that the company's "longstanding support of the LGBTQIA+ community is unchanged." News outlets across the country covered the controversy, while Bay Area LGBTQ+ organizations issued statements condemning the decision and organized a small rally in front of the Castro location on Friday.

"The rainbow flag is a symbol for the queer community, and this is the heart of the queer movement here in the Castro," Suzanne Ford, executive director of San Francisco Pride, told the Chronicle during the rally. "We can't just not say anything."

Organizers of the petition, a group calling itself Philz Coffee Baristas, did not respond to requests to comment. Close to 6,800 people have signed the petition so far.

Philz was founded in the Mission District in 2003 by Phil and Jacob Jaber, who stepped away after Sadarangani became CEO in 2021. Many critics of Philz' new policy tie it to the purchase of the company last year by private equity firm Freeman Spogli & Co., which also owns Popeyes Chicken and El Pollo Loco, for a reported $145 million, according to Mission Local, though the company did not provide details of the deal. It now has over 70 locations in California as well as in Chicago.

"Now we have this private equity firm coming into San Francisco and trying to say that our Philz Coffee locations can't have a Pride flag. That is really gross," State Sen. Scott Wiener, D-San Francisco, said in a video statement.

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This story was originally published April 15, 2026 at 7:19 PM.