Boston Market, the pioneering fast-casual rotisserie chicken chain, has closed 45 of its restaurants over the past week as part of a restructuring designed to improve the brand’s “long-term sustainability.”
In a letter to employees dated July 8 and shared with members of the media Monday, CEO Frances Allen acknowledged closing six locations on June 30 and another 39 on Sunday as part of a “broad-based analysis” of its locations.
“We must take steps to ensure our operational structure will support long-term sustainability,” Allen said in a letter to employees. “Part of that effort involves continuously analyzing our geographic footprint and real estate portfolio to assess the ongoing viability of locations.”
The company had been working with consulting firm Hilco Global to renegotiate leases as part of an out-of-court working, according to a report last month in the publication Debtwire. Restaurant Business has since confirmed that report.
Boston Market finished 2018 with 454 locations, meaning the recent closures represent 10% of the company’s unit base.
System sales have been declining in recent years, including a 1.3% decline in 2018, according to data from Restaurant Business sister company Technomic. Since U.S. system sales peaked at $615 million in 2014, according to Technomic, Boston Market sales have declined more than 9%.
The challenges come as another Sun Capital-owned company, casual-dining operator Restaurants Unlimited, filed for Chapter 11 bankruptcy protection over the weekend.
In her letter, Allen cited “shifting consumer preferences and rising costs” for creating a challenging environment.
“In many respects, this is a very exciting time in the restaurant industry, particularly as technology empowers the consumer in more ways and innovation continues to reshape the marketplace,” Allen wrote. “At the same time, the industry is facing considerable headwinds in the form of increased competition, shifting consumer preferences, and rising costs on everything from goods and labor to real estate and utilities.”
“It’s not enough to simply keep pace,” she added. “We need to actively drive evolution and change—and that’s been a major focus.”
Allen said the company has started work on a “multi-faceted transformation plan” to “compete effectively amid these challenging dynamics.” She noted the company’s menu innovation and said the company is working on online and mobile ordering, delivery and loyalty.
“Even in the face of the challenges our entire industry is facing, we feel very good about where we’re headed,” Allen wrote, noting that the company has the “full support of its owners and lenders.”