Chick-fil-A makes a point of emphasizing family values, and its management is still in the family, as president Dan Cathy explained to a group of wide-eyed children at the restaurant's South Boulevard location last week.

"This restaurant was started by my father, Truett Cathy," he told them, pointing to a picture of his dad, before taking them on a behind-the-scenes tour of the restaurant's kitchen and showing them how to use the ice cream machine.

Cathy, who's been president of the Atlanta-based chicken chain since 2001, was in Charlotte to tour local franchises. There are 39 Chick-fil-A restaurants in the Charlotte market. Nationally, the chain had $3.6 billion in sales last year, its highest yet.

The Observer sat down to talk with Cathy about Chick-fil-A, the economy, and the chain's support, through its foundation, of some socially conservative causes. This conversation has been edited for length and clarity.

Q: What brings you to Charlotte today?

The purpose of our time here is to tell the Chick-fil-A story. We have a lot of people who are very, very curious about why Chick-fil-A is closed on Sunday, what new menu items are coming, all kinds of questions. We just like to interface directly with our customers.

Q: What trends are you seeing?

You constantly have to be thinking, what is next? Healthy nutrition has always been a part of our menu, as well as having celebratory kinds of products like our milkshakes.

Q: So you're seeing increased demand for healthy food?

There continues to be a lot of buzz about it. However, we're selling an awful lot of milkshakes. Milkshakes are very healthy, if you drink responsibly. (Laughs) You need to be a runner, you need to be exercising. We do indeed have a major, major health issue that's looming, especially among the children. One of the new things we're developing now is char-grilled nuggets that go in our kids' meals. And you can swap out fresh fruit for waffle fries at no extra cost.

Q: How do you balance being conscious of the obesity epidemic with the items on your menu?

We first and foremost have to listen to our customers, and they vote for great taste, far above and beyond health and nutrition. People vote with their credit cards and their dollar bills.

Q: Your chain is uncommon in terms of being totally closed every Sunday. Does it help that Chick-fil-A is a privately held company to maintain that?

It makes it a lot easier. We only have five people that have to vote on something like that. I think if we were publicly traded, they would probably initially leave us alone, but as sure as the world, when we have a sales decrease we'd hear from shareholders saying maybe you ought to open up on Sunday. Some of our family members would probably be voted out. We prefer to leave it like it is.

Q: What lingering effects are you seeing from the recession?

I think we were all thinking this was going to turn itself around, but we're seeing reports now that we could well be in this for at least another year. I think people are getting a good dose of the reality of how the free enterprise system works. For a long time, we were almost like a drunk society, and I think a lot of people have been sobered up.

Q: How's that affecting your business?

It's helped us big-time on the labor market. Ten years ago, the biggest challenger our operators faced was getting enough labor. Now, we've got the pick of the market. We've used it the last two or three years to really upgrade the caliber of people that are behind these counters. And we've been very, very hesitant to make any changes on our pricing.

But (even with the recession), we've still had sales increases. We're on the eve now of being completely debt free.

Q: Have you been pressured on the cost side?

Oh yeah, from energy costs to insurance, absolutely. Eighty percent of the cost of chicken is the cost of corn, and when corn's diverted to ethanol, it puts a lot of pressure on us.

Q: You've been criticized by some groups for your WinShape foundation's charitable giving, which people have said goes to groups that are hostile to homosexuals. Have you changed your giving at all in response, and what causes do you support?

We support a biblical view of who the family is. We're in a crisis in America right now, where we're asking what constitutes a marriage, and we know that so many couples are having children but they're not married. Long term, that is devastating to a community and society. We have to employ these children, and when they walk in here it's very important for us to have the moral code kind of written into them, things like honesty, integrity, fairness.

It's a large task for us as employers to try to make up all the lost ground they didn't get when they didn't have a mom or a dad. So anything to shore up and to strengthen the family is what Chick-fil-A is all about.

We may be challenged with that, but that's our position, and we're going to stay the course. We're not critical of others, we're simply saying we need to have a society and a culture that represents traditional family values.

Q: What else does Chick-fil-A do to encourage the family values you're talking about?

We do events here called "Daddy-Daughter Date Night."

John Tsumas, South Boulevard location franchisee: We have one in my store here.

Cathy: Tell him about that.

Tsumas: We roll out the black linen tablecloths, we nicen up half of our dining room, we do tableside service. You're probably looking at about 130, 140 people. We bring a caricature artist in; we offer them free dessert. It's really to piggyback off of what Dan said - we're really trying to encourage that relationship part of the family.