BOSTON/jb/26 inches/1STJC/mark2nd
By JOE BEL BRUNO
Staff Reporter
Patrick Lenow’s business card says he is director of marketing for Boston Market. But he might as well be called the Road Warrior.
Six days a week, Lenow keeps up a frantic schedule of visiting new stores, from Bakersfield to the Mexican border. He explains that the chain’s expansion strategy opening one store every ten days has him running.
“There’s not enough time in the day,” said Lenow, who visits new or about-to-open stores to monitor progress of construction. “Things have to be done if we’re going to stay on target.”
Lenow’s punishing schedule he racked up 5,000 miles on his new Jeep Cherokee in just two months is a result of the company’s massive buildup in Southern California.
There are currently 88 stores in the region being managed by Boston West, a private company that operates as an area developer for Colorado-based Boston Chicken Inc. Boston West plans to build 40 more each year until the chain has 300 locations in Southern California.
The first Boston Chicken store opened in 1991 in Newtonville, Mass., serving up homestyle foods like meatloaf, turkey and chicken. The idea spawned a 970-store chain of Boston Markets nationwide, and the parent company plans on raising the total number of stores to 3,600 within the next few years.
For Los Angeles, analysts say “home cooked replacement meals” will be the next trend. The expansion by Boston West means they will at first dominate the concept though some analysts contend that it could lead to saturation as other restaurants move in.
“Any restaurant chain that grows at that kind of a rate is definitely running a risk,” said Arthur Manask, former president of the California Restaurant Association who now runs his own consulting service.
“Down the road they might have a higher degree of risk once places like Kenny Rogers Roasters opens, but being the first dominant one on the block might give them a leg up. It could also saturate the market to the point where people are turned-off altogether.”
Alan Palmieri, Boston West’s chief executive, said his company’s goals are within reach and he also rejects claims that Boston Market is growing at too fast of a pace.
“I think it is exhilarating, and so do our employees,” said Palmieri. “The whole process from the very start was to dominate local markets. We went in with a lot of confidence that the product, timing and brand was right.”
So instead of building one store and waiting to see customer reaction, Palmieri said the company started out planning for 40 stores. The site selection process began more than three years ago, allowing the real estate division enough time to locate the best locations.
Almost a year before construction even starts, Boston West pinpoints a site based on market studies and begins to apply for city building permits. Construction begins about a year later, after approval by architects and Boston Chicken.
A lot happens within the average 45 days it takes to construct a new restaurant.
The human resources department begins hiring store managers, ads are placed for additional employees, and the company either leases space or brings in a trailer to serve as a recruitment center.
About 400 managers a year roughly 25 a week are hired to work at the stores or serve as replacements.
Also from the start of construction, the marketing department begins assessing competition and local advertising opportunities.
About two weeks before the store is set to open, Boston West launches what they call the “Opening Team.” They are in charge of planning the last-minute details prior to the opening, such as coordinating phone lines and equipment installation.
“It’s a pretty rigorous process,” said Lenow. “I’m absolutely amazed at how efficiently we can open one of these stores given the time frame.”
About five days before the doors open, the Opening Team then has the task of ordering the first batch of food. It includes: 64 turkey breasts, 360 chickens, 300 meatloaves, 20 whole hams, 400 pounds of mashed potatoes, 500 sandwich rolls, ingredients for 8,000 pieces of corn bread, 280 pounds of corn, and 160 pounds of ingredients for stuffing. The stock is replenished about every three days.
A few days before opening, the store serves free meals to 1,200 people, a promotion that not only generates interest in the new store, but gives employees training before serving paying customers, Lenow said.
Palmieri would not disclose how much money the chain is spending on its expansion campaign. Analysts estimate that opening every store costs about $500,000 which, based on Boston West’s expansion plans of 40 more stores this year, amounts to about $20 million.
Spending that kind of money up front shouldn’t be a problem, said one Wall Street investment analyst who works exclusively with Boston Chicken.
“They have extremely deep pockets from the Boston Chicken Inc. right down to Boston West,” said the analyst, whose firm is currently representing the company in financial transactions.
The company’s chairman and chief executive officer is Scott Beck, who made millions by selling dozens of Blockbuster Video chains nationwide back to the corporation. He used the profits from that venture and brought in other investors from Blockbuster Entertainment Inc. to launch Boston Chicken.
Locally, Boston West, which began operations in 1994, was originally owned by Carl Karcher Enterprises Inc. the Anaheim-based restaurateur which owns Carl’s Jr.
CKE, which sold majority ownership to Palmieri and other investors in 1996, still owns about 20 percent of Boston West.
Boston West was also one of 13 other area developers nationwide to receive franchise loans from the parent company. Boston Chicken doled out about $647.3 million nationwide, with a larger percentage coming to Southern California, the Wall Street analyst said.
Boston Chicken will be repaid over time by store revenues or it can option a plan to convert the debt into equity-ownership.
Sifting through a dusty store still under construction in Inglewood last week, the 32-year-old Lenow runs down a check list of what still must be done at his latest stop within walking distance of The Great Western Forum on Manchester Boulevard.
The store is scheduled to open on April 20, but he wants it done even sooner.
“I visit our locations to scout out who our competition is, where to place ads, figure out where the foot traffic is coming from it’s all part of the strategy,” said Lenow, who even walks stealthily into competing restaurants to interview customers.
Carrying a notepad of information on the progress of the Inglewood store, he walked across Manchester to get in his car, which happened to be parked in front of a Kentucky Fried Chicken.
He grinned while looking up at the competition, long known as the nation’s premier fast-food restaurant for homestyle meals.
“We’re going to put them out of business,” he says confidently before closing his car door. “It’s exciting when that happens.”
