By Jeremy Markovich/NC Rabbit Hole
Just like the ACC, Bojangles is expanding to California.
Over the next six years, an entrepreneur named Lorenzo Boucetta plans to open 30 stores in the Los Angeles area. “The delicious chicken, biscuits, and breakfast, combined with strong unit economics and unparalleled support made the decision a no-brainer for me,” he said in a canned statement.
Bojangles has a few locations all over the country — but it’s mostly concentrated in North Carolina and the South.
Before this, Bojangles had already announced that they planned to open 270 new restaurants, including 20 in Las Vegas, and others in Dallas, Columbus, and Orlando.
If you feel like you’ve heard this story before, about Bojangles gearing up to take its Southern-inspired food across the country in a big way, you’re not dreaming. Over the course of its history, the company has tried to expand to far-flung places, only to contract back to the Southeast, where people know it best. So why does the company try this every couple of years?
Back in 1982, Bojangles opened a store on Sixth Avenue in Manhattan—such an oddity at the time that The New Yorker showed up. “I never saw a biscuit in my life,” said William Levitz, a Bojangles executive who lived in New York City. “The big question was would New Yorkers like biscuits. And they do. They love them.”
The New York City store was part of the rapid expansion plan from Horn & Hardart, a fast food company that bought Bojangles earlier in the year from founders Jack Fulk and Richard Thomas for $12 million. In just a few short months, they set off on a break-neck pace of expansion, going from 52 restaurants to nearly 150, and planned to have 600 open by 1986.
But in 1986, Horn & Hardart announced that it wanted to dump Bojangles completely, calling it a “drain on the company’s earnings.” The company said its New York locations were unprofitable, so it closed them and sold off the real estate.
In Houston, Bojangles ran into KFC, Church’s Chicken, and Popeye’s, which were already really popular. All of the locations there closed. In Florida, white-collar workers, retirees, and tourists didn’t really like the menu that was popular in the Carolinas, so the company tried new items and made its breakfast platter bigger.
Horn & Hardart’s 328 locations shrunk back down to 152 before they sold it to Sienna Holdings for $24 million in 1990. The new owners said they’d concentrate on Bojangles locations in the Carolinas.
Still, though, the company didn’t turn a profit until 1996, and the private equity owners had wanted to cash out by then. They decided to sell.
In 1998, new investors bought the company for $85 million and moved the headquarters back to North Carolina. The company decided to grow again. Then another guy came in in 2001, bought out the CEO, and put himself in charge, saying, “Our plan was to stop planning new locations and start cleaning up our own backyard.” Even so, by 2005 the company had expanded into Jamaica, Honduras, and China.
In 2007, Panthers owner Jerry Richardson and former Bank of America CEO Hugh McColl took over the company with their private equity investment firm, Falfurrias Capital. But by 2011, they were ready to sell, and yet another private equity firm, Advent International, bought the chain. They took Bojangles public in 2016 and, by some estimates, quadrupled its investment.
It was a public company for all of three years before, you guessed it, a pair of private equity firms bought it and took it private: the company had started to lose money again. Experts thought that, once again, expansion outside of its core market—the Carolinas—might have led to problems with profits. The CEO abruptly resigned. Stores closed. The menu shrank some more.
Which leads us to today.
If you operate under the premise that private equity firms only want to hold on to their companies for five or so years, then it’s gettin’ to be sellin’ time for Bojangles again. Which means it’s time to make a splash. Expand some more! That feels logical.
Bojangles is once again seeing if a broader swath of Americans will be interested in an American food from another part of the country. Bojanglifest Destiny, maybe.
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Jeremy Markovich writes NC Rabbit Hole, subscribe at NCRabbitHole.com. This column is syndicated by Beacon Media, please contact info@beaconmedianc.org.
The following article is an expression of opinion and does not necessarily represent the opinions or policies of the Enlace Latino NC organization. This article aims to generate discussion and exchange of ideas on the subject matter. The author is responsible for the opinions expressed in this article, which are based on his/her knowledge, experience, and subject analysis.
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