No flash for Bojangles, until you start checking the numbers
If it ain’t broke don’t fix it, the saying goes, and Bojangles could have coined the phrase. The chicken chain has trimmed its menu and sticks to just six Southeastern states. Ho-hum? Not when you check its growth rate.
Not even a brand-new CEO is throwing Bojangles off message that the chain known for its marinated chicken, made-from-scratch biscuits and Southern sweet iced tea is unlikely to change.
While some restaurant chains are expanding rapidly around the country or adding many new options to their menus, the Charlotte, North Carolina-based chain has taken a more conservative and sometimes opposite approach.
Bojangles ranked No. 1 in unit growth for the chicken segment at 5.9 percent, faster than larger competitors such as Chick-fil-A, KFC and Popeyes.
“We’ve contracted our menu to focus on core items,” CFO John Jordan told an audience at the Restaurant Finance & Development Conference last November. They avoid “extreme value discounting,” he added, and are seeing same-store sales rise by 7 percent.
The strategy has paid off. Bojangles in 2013 ranked No. 1 in unit growth for the chicken segment at 5.9 percent, faster than larger competitors such as Chick-fil-A, KFC and Popeyes Louisiana Kitchen, according to the Franchise Times Top 200.
No recovery needed
Its financial performance remained steady through the recession, too. Company officials expect to hit $1 billion in system-wide sales in 2014, following up on positive same-store sales each year.
“Our best years were through the recession,” says Eric Newman, executive vice president. “We didn’t bounce off the bottom and recover.”
Clifton Rutledge is the new CEO of Bojangles, coming from Texas-based hamburger chain Whataburger and succeeding current CEO Randy Kibler, who plans to retire in September but will remain chairman of the board. (See story on next page.) Rutledge plans to expand “aggressively,” the announcement of his appointment says, but only within “its existing footprint” in six states, its core markets in the Southeast.
The company at one time opted to try rapid expansion and found it a struggle. Founded in 1977 in Charlotte, Bojangles has grown to more than 550 locations in 10 states. “There’s a lot of opportunity,” Newman says, in the tried and true.
Bojangles has learned that staying focused on what it does best is one of the keys to success. While other QSR chains were diversifying menus and adding products, Newman says Bojangles was paring back to what were its most popular products.
The menu covers all three dayparts, with about 40 percent of sales coming from breakfast. And much of it is made from scratch, Newman says.
“The idea of making the execution more difficult was not very attractive,” he says. “When people were throwing all kinds of things on the menu, we were studying what do we really need to have.”
The company puts a great deal of focus on establishing strong relationships with its franchisees, Newman says, and maintains ownership of about 40 percent, or 240, of its restaurants to help ensure corporate goals are aligned with franchisees’. Whenever Bojangles’ corporate officials implement a new rule on franchisees, it does so on its own locations, as well.
And while the company collects a modest royalty, Newman says it does not sell equipment, food, spices or anything else to franchisees.
“When we’re out buying, we’re out buying for the whole system. Our interests are aligned with franchisees.”
The company’s efforts to align the goals of the franchisees and franchisor have helped keep conflicts at a minimum. Bojangles has not had a disclosable conflict in nearly two decades.
“We work really hard on conflict resolution,” Newman says. “The momentum has helped people pull together.”
Now a believer
David Arrington has been involved in the restaurant business since the early 1970s when his father purchased a Dairy Queen. Later on the family developed an independent sub-sandwich shop and, at its peak, the family business reached seven Dairy Queens and two sub shops.
In 1995, after purchasing a convenience store with a Dairy Queen along Highway 220 between Greensboro, North Carolina, and Roanoke, Virginia, Arrington Enterprises was looking for a complementary restaurant concept to fill the space.
That’s when Arrington, president of the company, was introduced to Bojangles. The restaurant opened in 1996 and after 17 years, he now operates three of the chicken restaurants. He had been familiar with the food, but he’s now familiar with and a strong voucher for the strength of the parent company’s commitment to its franchisees.
Bojangles gives franchisees training, support from field reps and a voice for ideas and issues. “They welcome you in,” he says. “They love to see franchisees bring people into their training programs.”
He admits to having been frustrated at first about how conservative Bojangles is about offering new items on the menu, but now believes it was the right decision.
“They wanted us to focus on what we did and do that well,” Arrington says. “When you bring in new products it does complicate efficiencies. I didn’t like it, but I do like it. It grew on me. It was the right decision. You can see that in Bojangles’ sales growth.”
CEO may be new, but strategy’s familiar
Slow and steady growth in existing and established markets, plus working to build name recognition in new ones is a strategy espoused by Clifton Rutledge, named in early January as the successor to Randy Kibler as Bojangles’ CEO.
“You don’t just want to put dots on the map,” he says. “They’re staying in that Southeastern corridor. They’re not jumping over states. They’re building out from the core. I think that’s the right way to do it.”
Rutledge joins Bojangles after 30 years in the industry. Most recently he served as chief operations officer for Texas-based Whataburger. Rutledge also cited Bojangles’ strong franchisee relations, its loyal following and its strong, steady growth in recent years as selling points for “leaving a great company and joining an even better company.”
He plans no major changes in the near term and he’s looking forward to hitting the road to meet the company’s franchise partners.