News

Boston Market CEO on chain’s growth strategy

Chain working to broaden customer base, revamp units and streamline menu

Lisa Jennings

Boston Market is looking to expand its customer base to include more travelers and students with a licensing push into non–traditional locations such as airports, freeway travel centers and college campuses.

And next year – probably in the third quarter – the company also plans to launch a traditional franchising program, said George Michel, chief executive of the Golden, Colo.–based rotisserie chicken chain, in an interview with Nation’s Restaurant News.

“We want to provide an opportunity for franchisees of other concepts to add Boston Market to their portfolios,” he said. “Our results have been very encouraging and exciting.” He said initially the 490–unit brand will refranchise existing locations and working with franchisees to build out certain markets.

The news follows positive results from turnaround efforts for the chain, which began last year under a new prototype effort dubbed “America’s Kitchen Table.”

The initiative revamped the menu, with chicken and turkey carved to order and freshly made salads. Enameled pots replaced steam tables in the food line and restaurants shifted to real plates and silverware for dine–in guests. And more staff was hired to improve service.The revitalization will be complete at all units by the end of September, Michel said.

“Our brand is energized”
Michel said the efforts so far are working. Since October, when the revitalization began, same–store sales have been in the “high–single digits to low teens,” and average unit sales are improving, he said. “We’re back,” Michel said. “Our brand is energized.” Other changes have also contributed to the turnaround.

Restaurants are staying open later, with some units closing as late as 11:30 p.m. instead of 9 p.m. With menu labeling on the horizon, Boston Market has developed meals with fewer than 550 calories, which will soon be promoted more actively in stores.

The chain is also looking at ways to build weekend and drive–thru business. Perhaps most significantly, Michel said Boston Market “might look at whether breakfast makes sense,” although probably not until late 2012. Like most restaurant operators, Boston Market has been forced to address rising commodity costs. The chain will increase prices 1.3 percent in August, he said.

Ready to grow
The company’s next step is jumpstarting growth. The chain long–ago emerged from bankruptcy, in 2000, when McDonald’s Corp. bought it for $173.5 million. Seven years later, McDonald’s sold Boston Market to its current owner, the private–equity firm Sun Capital Partners.

The chain has shrunk considerably from the 630 locations it had when Sun Capital purchased the brand in 2007. But Michel said it is ready to grow again. Last week the company revealed the promotion of J. Randall “Randy” Miller, formerly Boston Market’s senior vice president and general counsel, as chief administrative officer. The unusual title includes oversight of legal concerns, design and construction, loss prevention, real estate and property administration.

He will also head the chain’s licensing and franchising development opportunities, Michel said. The first push will target non–traditional licensed locations, which Michel said is a return to roots, when the concept was founded in Newton, Mass., in 1985 as a neighborhood takeout with only a few stools. Boston Market has three Massachusetts units in turnpike locations from the early years. ”

They were never considered a stepping stone to the next phase, though we are looking now at what we’ve learned from them,” Michel said. The chain lost a lot of great sites during the restructuring, he said, and McDonald’s also claimed some top locations during its ownership. As for its expansion into universities, Boston Market could opt for either an express or a full–sized unit depending on campus needs, Michel said.

Focus on signature chicken
Menu changes are also part of Boston Market’s strategy. The company is developing a smaller footprint format and offering a limited menu that focuses on its signature rotisserie chicken, as well as additional portable offerings.

Boston Market is currently testing wrap sandwiches and about six months ago added a pulled barbecue chicken sandwich, both of which are doing “extremely well,” Michel said. The chain is also testing smoothies and investigating soft drink and snack opportunities to build off–peak traffic from 2 p.m. to 4 p.m. “We offer a wholesome meal that’s similar to home–cooked,” Michel said. “I think our food offerings and menu lend itself well to that kind of venue.”

The road ahead
Going forward, growth will initially target existing trade areas that can be built out or those that had a Boston Market in the past, not new markets, Michel said. The company plans to look for franchise locations as in–line locations, not freestanding buildings as in the past.

Down the road, Boston Market may also consider international expansion. Michel noted his previous work with A&W, Burger King and Brinker International as experience with overseas partners. But the company is keeping its domestic goals in its bull’s–eye. “Our target is to make sure we improve the performance of our restaurants,” Michel said.