Fast food chain caught up in Chapter 11 bankruptcy has a new plan

The covid pandemic proved to be a death knell for fast-food operators who were unable to pivot to a delivery and drive-through model. As dining rooms closed around the country, companies like McDonald's and Domino's, which had prioritized digital channels and delivery for years were best prepared to deal with the changed market conditions.

It was a unique (hopefully) massive change in operating conditions that nobody could have predicted. McDonald's, Domino's, and Starbucks — all clear pandemic winners — weren't building out their digital and delivery infrastructure just in case we suffered a global health crisis.

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All three of those chains, and a few others, invested in becoming omnichannel because they wanted to be able to serve customers in whatever way they wanted to be served. Chains that had not made those investments generally suffered with Restaurant Brands International's (QSR) - Get Free Report Burger King seeing multiple franchisees go out of business.      

Another popular chain, Boston Market, saw sales drop during the covid pandemic as it had built its business largely around in-store dining and takeout. Some locations have drive-throughs, but the company never made building up digital and delivery a major investment priority.

Now, the chicken chain which used to be known as Boston Chicken when it was founded in a Boston suburb, stands on the brink of extinction. The chain's owner, Jignesh Pandya, has personally filed for bankruptcy protection which puts the business, which has been steadily shrinking, in great peril.

That claim was actually dismissed by a federal judge citing Pandya not being responsive to requests for information.

Boston Market has not responded to multiple requests from TheStreet for comment on its financial health.

Boston Market's situation is bleak

It's hard to know exactly how things stand for Boston Market. Technically, Pandya filed for bankruptcy, not the chain, and with his bankruptcy being thrown out of court, it's unclear where the company or its owners' finances stand in the wake of significant liabilities.

But, Boston Market has seen all of its Florida and Connecticut locations abruptly shut down late last year. In addition, Boston Market had its headquarters seized in May 2022 by the Colorado Department of Revenue over $329,00 in unpaid sales and payroll taxes.

That's not good news and the company has gotten steadily smaller amidst its struggles. The fast-casual chain also faces a lawsuit from US Foods, a key vendor, over $11 million in unpaid bills.

The chain's legal problems are lengthy as it also been sued over 140 times in a variety of state and federal courts over everything from unpaid wages to overdue rent, and vendors who have not been paid.

Still, the restaurant chain still has not gone out of business and it has just shared a bold plan to get back to growth.

Boston Mark has a bold new franchise plan 

Generally, when a person or a company buys a franchise they pay a fee upfront. After that, the new franchisee pays a percentage of its sales to the parent company and generally has to order its food and supplies from the chain,

Sometimes fees are lowered or royalty payments are waived for a period of time, but Boston Market's new Boston Market Connect (BMC) franchise program designed to grow the chain quickly.

"In a bold departure from conventional franchise models, the BMC program unfolds as a new window of opportunity, inviting passionate individuals to become an operating owner/partner of a Boston Market location without any buy-in requirements," the company shared in a press release.

Basically, the rotisserie chain wants existing operators — perhaps convenience store owners or people who own pizza places or other non-franchised eateries — to add Boston Market's menu to their locations.

Pandya, without commenting on his bankruptcy made bold promises for the new franchising plan.

"The Boston Market name stands for itself and it is well known throughout the country," said Pandya. "Now, with everyone's support we will be able to provide our famous rotisserie chicken and delicious, homemade sides and family meals to everyone. We encourage anyone with a location and a desire to add Boston Market virtually to reach out and partner with us."