000538 McDonald's Completes Boston Market Take OverMay 28, 2000Chicago - Boston Market, the once-sizzling chain whose overexpansion nearly sent it to the restaurant scrap heap, received new life Friday when the world's biggest fast-food company formally took over the business. McDonald's Corp., announcing the completion of its $176 million acquisition of Boston Market's parent, Boston Chicken Inc., pledged to make the “exciting brand” grow. After closing 100 Boston Market restaurants in the past week, McDonald's said it will retain a “significant majority” of the remaining 751 under their existing name. The rest will be converted to McDonald's, Donatos Pizza and Chipotle Mexican Grill over the next year. That will leave Boston Market the No. 2 chain for Oak Brook, Ill.-based McDonald's, which has been expanding into new brands. The one-time burgers-only giant named two top McDonald's executives to run Boston Market. Jeffrey Kindler, 45-year-old executive vice president, becomes chairman and chief executive officer of the smaller chain while senior vice president Michael Andres is its president and chief operating officer. Boston Chicken sought Chapter 11 bankruptcy protection in October 1998 after the once high-flying chain was dragged down by debt and overly ambitious expansion plans. The acquisition by McDonald's, first disclosed last December, could have spelled the end for struggling Boston Market. But after eyeing it initially for its prime restaurant locations, McDonald's executives said they decided the Boston Market concept had strong potential and plan to revitalize it. “The more we learned, the more we liked,” Kindler said in a telephone interview from Oak Brook, where the top two executives of Golden, Colo.-based Boston Chicken will also be based. “For all the problems Boston Market experienced, they certainly have a very strong brand, loyal customers and quality products,” he said. Recently “their sales have increased, reflecting the good job they've done getting back to basic, high-quality restaurant operations.” He said no plans exist to close more Boston Market restaurants, now based in 31 states. Boston Market restaurants rose to popularity offering roasted chicken and assorted side dishes including salads, fresh vegetables, and later expanded to offer other entrees. Securities analyst Herb Blutenthal, managing director of Hartline Investment Corp. in Chicago, called the acquisition “mainly a real estate deal,” saying McDonald's obtained hundreds of excellent restaurant locations at a “very cheap” price. He said McDonald's sees growth potential but is wise not to add new Boston Markets until it sees how the restaurants fare. “They can add some efficiencies to the Boston Market concept, and they have what it takes to help it grow - site location, construction, supplies procurement, food purchasing,” Blutenthal said. “McDonald's wants to be known as a fast-food restaurant company, not just a McDonald's.” Shares of McDonald's were up 433/4 cents to $37.75 in trading on the New York Stock Exchange.
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