Broken Wing

Besides closing 178 of its stores, Boston Market has found $70 million in debtor-in-possession financing. Company officials won't talk about the past, but they will say Boston Market's best days are still to come.

For anyone looking to become a franchisee or a franchisor, there are lessons to be learned from the Boston Market fall. Start with getting good advice, something Boston Market obviously didn't do, Kaufmann says. And in the beginning, think micro, not macro.

"If you're not making money on the unit level, don't franchise out," Kaufmann warns.

The lesson for people buying a franchise is simple: Do your homework. Although Boston Market's stock made potential franchisees salivate, it was a poor indication of how the restaurant units themselves were doing. Had franchisees looked deeper into the actual results, they might have avoided a costly mistake.

"I'd want to check out the real economies of the [restaurant] I'm going to be running," Papiernik says. "I don't want to be told I'm going to wait three or four years to make a profit."

Kaufmann says there's a quick way to get an insider's view of the franchise--call some franchise owners. Their names and numbers have to be provided to potential franchisees. "If they're happy, they'll tell you. If they're not, they'll tell you even faster," Kaufmann says. (For more on researching a franchise, see "Now You're Cooking", January.)

There are never any guarantees when it comes to making a business sizzle, but learning from other people's mistakes can be a good way to keep from getting burned.

Contact Source

Nation's Restaurant News, (212)756-5205, rpapiern@nrn.com

This article was originally published in the February 1999 print edition of Entrepreneur with the headline: Broken Wing.