Philz Coffee, a San Francisco-based chain known for its customized blends and longstanding support of the LGBTQ+ community, is facing employee and customer backlash after it removed Pride flags from all of its locations nationwide. The decision, announced earlier this month, is intended by company leadership to create a “more consistent, inclusive experience” across its stores.

The chain, which operates approximately 75 stores primarily in California and six in the Chicago area, took down Pride flags as well as other symbols such as Chicago-specific and Black Lives Matter flags in some locations. The changes were implemented without prior explanation to staff, according to employees who spoke on condition of anonymity for fear of job repercussions. One Chicago-area employee said the removal of the flags had a significant negative impact on store atmosphere and morale, especially among LGBTQ+ staff. Another employee confirmed that the company is now discouraging open discussion regarding the changes.

Philz CEO Mahesh Sadarangani, who has led the company since 2021, addressed the decision in a confidential letter to employees released Friday. He acknowledged the way the changes were handled fell short of expectations, especially given the company’s identity as an ally of the LGBTQ+ community. Sadarangani emphasized that the company’s support remains unchanged and noted that Philz will continue donating to LGBTQIA+ organizations and selling its “Unity Collection” merchandise to raise funds for queer causes.

“Our long-standing support of the LGBTQIA+ community is unchanged,” Sadarangani said in a statement. “We are working toward creating a more consistent, inclusive experience across all our stores, including removing a variety of flags and other decor. This is a change in how our stores look, not in who we are. Our allyship runs deeper than what is on our walls.”

Founded in 2003, Philz Coffee has historically displayed Pride flags year-round and hosted annual events supporting LGBTQ+ causes, including scholarships and fundraisers. The move to remove these flags has drawn sharp criticism from some employees, who view the step as a retreat from the company’s roots. Some attribute the shift to Philz’s 2025 acquisition by private equity firm Freeman Spogli, suggesting that corporate changes have led to a reduced emphasis on visible diversity and inclusion efforts.

The CEO’s letter also noted that a Diversity, Equity, Inclusion, and Belonging (DEIB) committee remains active within the company, even as physical expressions of support have been scaled back. Sadarangani acknowledged that the changes may feel personal to some team members and took responsibility for shortcomings in communication.

The controversy has sparked an online petition initiated by Philz baristas seeking to reverse the decision. By Friday, it had gathered more than 4,500 signatures. The situation reflects broader trends among corporations reassessing visible diversity initiatives amid an increasingly polarized political climate.

As Philz navigates this transition, representatives maintain that the company’s commitment to inclusivity and support for marginalized communities remains intact, despite the removal of symbolic decor in stores.