I’ve been predicting as Fast Food Sector shake-out for few years, now. The signs are clear: Resto chains are downsizing, streamlining and merging. Closing. And now the first of the notable brands has filed for bankruptcy…
FOR SALE
Where does Boston Market fit in?
Okay. I’ll admit that Boston Market (BM) is not the among the biggest fast-casual brands out there. They’re in the same niche as Panda Express and Panera Bread. Classy image and relatively upscale food. In Boston Market’s case, the specialty is rotissery Chicken. And, as we’ll see. therein lies a rub.
But they’re also serious trouble, financially. And they’ve been treading water since before 2020, when they were bought by Engage Brands, skippered by one Jignesh (Jay) Pandya. Pandya is described in media reports as a resto operator and investor. Other brands owned by Engage include Pizza Hut and Checker’s & Rally’s.
Whats happening?
According to Nation’s Restaurant News (NRN): “Pandya — who faces hundreds of lawsuits from vendors, franchisors, and employees regarding unpaid bills — filed for personal bankruptcy on Dec. 8 with the Eastern District of Pennsylvania Bankruptcy Court. Pandya cited $10-$50 million in liabilities and the same range for assets in his bankruptcy paperwork.”
NRN also notes that Engage Brands’ Colorado headquarters building and contents was seized this past May for unpaid taxes. And Boston Market specifically has had to close ‘many’ locations after suppliers cancelled contracts and sued the chain over unpaid bills.
All the brand’s New Jersey stores were closed down for a month by a court order after M was sued over $630,000 in unpaid wages. The state Department of Labour also fined the chain $1.2 in other damages and more than $730,000 in ‘administrative penalties’.
In what seems an absurd development, Pandya was even sued personally by sister chain Pizza Hut for $11 million over ‘violations of franchise agreements concerning Pizza Hut franchises Pandya owns in Pennsylvania.’
Yikes!
Where’s the chain at, now?
According to Scrapehero.com, there were still 310 BM locations open across the US as of November 3 of this year. That’s a far cry from the more than 1,200 locations it operated at the peak of its success.
What went wrong?
The following diagnosis of BM’s decline and fall is entirely my own opinion. But it’s informed by lengthy experience observing the fortunes and failures of Fast Food brands.
First, I think it’s clear that BM (originally named ‘Boston Chicken’) was one of too many rotisserie chicken options in the market. Last in, first to go. And the coming to supermarket delis of rotisserie chicken in recent years has done nothing but put more pressure on specialty restos with that focus.
Second, it’s also clear (to me) that Jay Pandya is not suited to run an operation like BM – much less a holding company shepherding other brands.
Third, I can’t see any way out for Engage – which itself is at stake due to the lawsuits involving Pandya personally – other than bankruptcy. And dissolution.
Anybody wanna buy Pizza Hut?
How about Checker’s & Rallys? I predict they’ll be on the auction block pretty quickly after Pandya formalizes his bankrupcy.
As for BM… It will disappear. Some other organization will buy its assets for pennies on the dollar. And that will be that. Many will say, “Good riddance!”
Stay tuned…
I predict this is just the first such crash-and-burn of a notable Fast Food chain that we’ll see in the coming months and years.
~ Maggie J.