GOLDEN, Colo. -- Boston Chicken here has replaced its top leadership.
The change of executives, however, will not affect plans to roll out its new prototype Boston Market unit in Charlotte, N.C., to additional areas or the in-progress program to buy Boston Market units from franchisees, officials said.
The company has named J. Michael Jenkins, a 37-year veteran of the restaurant industry, president and chief executive officer. Jenkins most recently was president and chief executive officer of Denver-based Vicorp, a chain that operates and franchises more than 350 Village Inns and Bakers Square restaurants.
Jenkins' appointment followed the resignations of Scott Beck as Boston Chicken's president and co-chairman and Saad Nadhir as chief executive officer and co-chairman. Saad Nadhir also resigned from his position as chairman, chief executive officer and president of Progressive Food Concepts Inc., a wholly owned subsidiary of Boston Chicken. In addition, Mark W. Stephens resigned as Boston Chicken's chief financial officer and vice-chairman of the board of directors. No successor has been named for Stephens at this time.
In the midst of the company's continuing financial challenges, the switch in top management was urged by Beck and Nadhir, according to Karen Rugen, senior vice president of communications for Boston Chicken.
"Saad is the one who approached the board and suggested they look at Mike Jenkins because both he and Scott believe that he's what the company needs right now in this transition period. That we need a strong, experienced operator who's also a leader and who has proven experience with improving a company's profitability," Rugen said.
"They both felt Mike's skills and expertise were more appropriate for the company at this time in its life cycle. Saad Nadhir and Mark Stephens will stay as advisers to the company as long as they're needed," she added.
Prior to joining Vicorp in 1994, Jenkins served as chairman and chief executive officer of El Chico Inc., operator and franchiser of El Chico restaurants.
Jenkins has also served as president and chief executive officer of TGI Friday's and as chief executive officer and president of Metromedia Steak Houses, operator and franchiser of Ponderosa and Bonanza steak houses. He also has served as chairman and chief executive officer of S&A Restaurant Corp., the company that operated the Steak & Ale and Bennigan's concepts.
Rugen emphasized that the resignations and appointment do not signal a change in the company's plans.
"Charlotte will proceed and we're going ahead with our plans to become 100% company-owned," Rugen said.
But some industry observers see the change as indication that the new prototype Boston Market store developed this past year at test sites in Charlotte, N.C., may not be doing as well as expected.
"They've reported that some of those [Charlotte] stores have sales that are 20% to 30% over the average sales per unit at its traditional stores. The sales increases sound good, but I don't know how that translates into profits," said Neil Stern, a partner in McMillan/Doolittle, a Chicago-based retail consulting firm.
"You have to speculate that if the new concept was a golden key, they wouldn't be doing this. Such a change at the top is at least a pretty good code word for 'we're going to re-evaluate,' " Stern added.
As reported in SN, April 27, the company -- after testing it in two of its existing Charlotte stores -- rolled out a new prototype Boston Market format to all seven of its locations in Charlotte in March and announced plans to put it in 75 additional locations before the end of the year. The Denver market has been designated as the next to get the new format.
The prototype veers clearly away from the original Boston Market format, but also includes the original menu staples such as rotisserie chicken and chicken, turkey, meat loaf and ham dinners. In addition, it features a grill, a service salad station dubbed "Boston Garden," a self-service case with prepacked entree and side salads, and an expanded dessert section.
Commenting further on the new format, McMillan-Doolittle's Stern said, "A lot of capital has gone into that and a lot of marketing is necessary when you introduce a new concept. They have to educate the consumer on what to expect."
The company did give the rollout of the new format in Charlotte a send-off with a blitz of advertising on local radio and television.
Stern pointed out that the company has had to fight all along -- for one reason, because it hasn't been successful in capturing more than the dinner daypart and Boston Market customers have not returned as frequently as the company had projected. Now, management is charged with meeting weekly average sales minimums per unit as a prerequisite to expanding the new concept into other markets.
"In terms of managing long-term strategy with short-term goals like that, it's a tough thing to balance," Stern said. McMillan/Doolittle follows Boston Chicken's performance closely because it considers it an HMR bellwether, he added.