Just five years after its 1993 initial public offering, the chickens came home to roost at Boston Market when the home-style eatery--a victim of overexpansion--declared bankruptcy. Last May, McDonald's Corp. (MCD) swooped down and snapped up the carcass for only $173.5 million, planning to scrap the chain and convert its 860 sites to more burger places or outlets in McDonald's new pizza and burrito chains.
But a funny thing happened to Boston Market on the way to the scrap heap. Although the man McDonald's brought in to close Boston Market, former General Electric Co. chief litigator Jeffrey B. Kindler, swiftly shut 100 stores and earmarked 50 or 60 more for conversion, he also became convinced that Boston Market had a future.
Internal marketing data showed that the chain had a surprisingly loyal customer base. Plus management had developed good ideas for new entrees, such as grilled chicken. "We were sold on the brand," says Kindler, Boston Market's chairman.
The clincher was a ten-year pact negotiated with Heinz Frozen Food Co. to put the Boston Market name on a line of frozen dinners for 10 years. Even with the restaurants in bankruptcy, Heinz (HNZ) discovered in surveys that consumers were 30% more likely to try the new entrees if they carried the Boston Market logo over any other name it tested. The supermarket line is now a $100 million business. "It's a great brand name," says Neil Harrison, Heinz Frozen Food's president.
Now Kindler has bolder plans. He is remodeling stores across the country and even plans to open new ones--a remarkable comeback for a chain written off as dead.