Struggling sandwich restaurant Cosi has a new CEO: a franchisee who operates more than a quarter of the chain's franchised locations.

R. J. Dourney will go from the company's largest franchisee to its top dog, Cosi announced Tuesday. Dourney is Cosi's fourth CEO in less than three years.

Stephen Edwards, the previous CEO, will return to the role of executive chairman which he held prior to becoming CEO in June 2013.

Investors cheered the announcement, sending Cosi shares up 20 percent yesterday. The stock was up nearly 13 percent as of 11:45 a.m. ET today.

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Dourney comes with a lot of hands-on experience, operating 13 Cosi restaurants in the Boston market as the founder and CEO of Hearthstone Associates. As Cosi is currently comprised of 72 company-owned restaurants and 49 franchise locations, Dourney runs over a quarter of Cosi's franchised restaurants.

Prior to founding Hearthstone, Dourney held positions as chief operating officer for Au Bon Pain and vice president of franchise operations and development at Applebee's.

Things at Cosi haven't been rosy. Earlier in March, Cosi reported dismal earnings for 2013, with losses widening 158 percent to $11.4 million. Same-store sales fell 5.1 percent, while revenue decreased 11.9 percent from 2012.

In their fourth quarter report, Cosi also announced interest in seeking options for a "financial transaction with one of its large shareholders." This could mean selling company-owned restaurants to franchisees to reduce company costs or receiving other sources of third party financing. 

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