Ownership Changes, Unpaid Taxes and Lawsuits Were the Perfect Storm for the Once-Booming Chain
Do an internet search on “Boston Market struggles,” and, whoa, the results are disturbing. Could this once-sizzling-hot rotisserie-chicken restaurant franchise be circling the drain? What has led to its highly publicized decline? After all, it once boasted about 1,200 locations and now has only about 300.
An array of financial problems has prompted lawsuits and evictions for being in arrears on rent. Unpaid and slowly paid vendors no longer want to supply the fast-casual brand. In Boston Market’s latest troubles, on Tuesday the New Jersey Department of Labor shut, at least temporarily, 27 Boston Markets after a state investigation turned up violations of worker rights, running up a $2.5 million tab. Business analysts also believe that its menu was stagnant in the face of evolving consumer preferences.
Documenting the Decline
Following is a look at some of the millstones and milestones that have weighed down the formerly shining brand, which was founded in 1985 as Boston Chicken and rapidly expanded during the 1990s – too rapidly, according to some business analysts. A Mashed.com article pointed out a major goof in the mid-’90s, when Boston Market entered the fast-food fray with lunch- time sandwiches. The market was awash with coupons that shrank profits.
Boston Market Bankruptcy in 1998
A huge bump occurred in 1998, when Boston Market filed for bankruptcy. McDonald’s bought the brand in 2000 and wasn’t able to engineer an upturn. In 2007, the brand was sold to Sun Capital Partners, a private equity firm, NRN.com reported. Sun Capital shut down more than 600 locations.
In 2020, Boston Market was sold to Engage Brands under the Rohan Group of Companies. At that time, the rotisserie-chicken specialist was in the middle of enhancements designed to resurrect the brand. Those high hopes never materialized. George Michel, CEO until 2018, recently cited the Covid-19 pandemic and inflation as huge obstacles that Boston Market hasn’t been able to surpass, according to NRN.com.
And Mashed.com article noted that Boston Market also has been squeezed by competition from supermarkets. Virtually every one of them sells one or more versions of already-cooked herbed rotisserie chickens similar to the mainstay offering of Boston Market.
Mission Impossible for New Boston Market CEO
In 2018, Frances Allen became CEO and – no surprise – was tasked with updating the brand, which introduced chicken sandwiches and made additional menu changes. More stores closed in 2019, however. Allen left her post in April 2020, and under her successor, Eric Wyatt, a late-night menu of sliders and bowls debuted in hopes of a hit with younger customers. Obviously, those ideas didn’t catch on, and some industry experts have speculated that offerings with international flavors and uber-healthy entrees and side dishes might’ve been smarter menu moves.
Red Ink, Lawsuits, Unpaid Taxes
For a while, the brand made no ripples in restaurant industry news. Then tales of financial desperation and lawsuits came to light. Unpaid rent has spawned suits from landlords – among them McDonald’s, according to NRN.com. Earlier this month, the Fresno Bee reported that Boston Market had shut down its locations in the California town and that one of those was evicted for unpaid rent.
In May of this year, Boston Market’s headquarters in Golden, Colo., and three additional Colorado restaurants were seized by the state’s Department of Revenue because of unpaid sales taxes and wage withholding, a tab of about $328,000, according to an NBC affiliate’s report. The properties were returned once Boston Market satisfied the debts. Vendors have upped the ante. US Foods is suing the rotisserie chicken chain for $11.3 million in unpaid bills, according to a filing in the U.S. District Court of Illinois in July 2023. Other vendors including Ben E. Keith, also are suing.
Employee Paychecks, Supplies from Supermarkets
Similar to employee pay issues in the New Jersey stop-work order, former employees in the New York area sued Boston Market for failure to “provide timely wages” about two years ago. In Arizona and Massachusetts, store employees have filed similar lawsuits.
Even employees at corporate headquarters have said paychecks are often delayed. They complain that corporate leaders aren’t communicating with them and they’re operating in an information vacuum. One told NRN.com that paychecks were four months behind and then three arrived on the same day.
Boston Market Franchises
Franchises are folding voluntarily, and some of the survivors are stocking with supermarket food as contracts with vendors expire. One anonymous former Boston Market executive told NRN.com that “owners are milking whatever little profitability they can get out of the company probably before jumping ship. … I think Boston Market is going to go away entirely unless somebody’s willing to buy it out at a very cheap rate and try to salvage whatever they can.”