The fast-growing Boston Chicken chain made the beleaguered Anaheim, Calif., company an offer it couldn't refuse: the chance to get in on rotisserie chicken by developing 300 Boston Chicken franchises in southern California.
The deal sets the stage for a major fight among chicken chains on the West Coast, but teaming with an established fast-food presence may give Boston Chicken, based in Naperville, Ill., a leg up.
President-CEO Donald E. Doyle said Karcher Enterprises, parent of the 650-unit Carl's Jr. hamburger chain, will set up a separate management team to lead the venture.
Karcher will first convert about 35 Carl's Jr. restaurants into Boston Chicken units, which will boost profits at the remaining Carl's stores, Mr. Doyle said.
"We have a selective number of existing Carl's too close to other Carl's restaurants," he said. Karcher will then seek to acquire vacant restaurants to convert.
A Boston Chicken spokesman said the company has not been intimidated by Carl Karcher's battle with his own board over several marketing issues. The dispute came to a head in October when the board stripped Mr. Karcher of his chairmanship; he has since returned as chairman emeritus.
The Boston Chicken spokesman said his company was attracted to Karcher's real estate and its experience in upscale fast-food.
Bayer Bess Vanderwarker, Chicago, handles advertising for the 218-unit Boston Chicken chain, which has ambitious plans to open 600 new stores in the next three years. This year's ad budget is estimated at about $25 million.
Carl's Jr. will get its first ads from Grey Advertising, Los Angeles, in the spring. Grey replaced Goodby, Berlin & Silverstein, San Francisco, on the roughly $25 million account in the fall.
Carl's Jr. restaurants already carry a line of char-grilled chicken sandwiches and will continue testing roasted quarter-chicken meals. Karcher officials do not see the test as a conflict.
The last rival Boston Chicken needs is its own partner, considering all the competition already in area. In addition to Kentucky Fried Chicken Corp. hawking Colonel's Rotisserie Gold, regional El Pollo Loco is a big presence and Los Angeles-based Koo Koo Roo and national chain Kenny Rogers Roasters plan to expand in California.M