From the time its rotisserie first turned, Boston Chicken had
people salivating. Soccer moms, working singles and families
nationwide flocked to the stores to buy this healthy alternative to
fried chicken. Wall Street investors ate up Boston Chicken, too,
buying its stock at ever-increasing prices. By 1993, 10 years after
the company started, franchises were hatching across the country at
breakneck speed. With the restaurant chain's name changed to
Boston Market, company officials and many industry publications
predicted a rosy future.
But within five years, the Chicken had been fried.
On October 5, Boston Market entered bankruptcy court to file for
Chapter 11 reorganization; the closing of 178 locations soon
followed. Franchise purchasers were plucked, profits were down, and
the company could not get out from under its debt.
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Franchise and restaurant industry experts cite a number of
reasons for the fall, but most lay the blame at the feet of a
franchising system that pushed overly rapid expansion while
ignoring same-store sales. Those same experts say most business
owners-especially those involved with franchises-can learn some
lessons from what happened to Boston Market.
Solid Concept
Boston Market's supporters and critics generally agree on
one thing: Its food is good.
"I happen to be a good customer of Boston Market,"
says David Kaufmann, a franchising consultant and attorney with New
York City law firm Kaufmann, Feiner, Yamin, Gilden and Robbins,
whose clients include the holding companies for Arby's, KFC,
Pizza Hut and Taco Bell. "I knew the franchise program was
terribly flawed, but my family and I still eat there."
Boston Market hung its hat on whole rotisserie chickens, with
side dishes such as mashed potatoes and steamed vegetables.
Marketing teams latched onto the phrase "home meal
replacement," selling it as something healthy you would be
proud to serve at the family dinner table. The company sold itself
as the dominant force in a category that was well on its way to
being the norm for most people dining out in the '90s.
After profits started to sag, the company added a line of
sandwiches. Some critics contend that action hurt more than it
helped because it diluted what Boston Market was about. Company
officials expected the "Boston Carver" line of sandwiches
to help restore sagging profits in 1997, but, by their own
admission, that plan didn't work as well as they'd
hoped.
So while the quality of its food was rarely an issue, the
quality of Boston Market's franchising program was.
Kurt Helin is the editor of two weekly newspapers in Long
Beach, California, and the former editor of Inland Empire
Business Journal.
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