With about half of its 461 stores open for more than a year, Boston Chicken is trying to keep customer traffic brisk by testing new entrees and offering lower-price dishes-like its $2.99 vegetable pot pie. A source close to Boston Chicken said stores in mature Southern and Eastern markets in particular aren't doing as well as the company anticipated. Boston Chicken early next year also will start serving breakfast.
A Boston Chicken spokesman denied reports that the company's revenues are being artificially pumped up by franchising fees, saying such fees represent "less than 12% of revenues." On the strength of opening 85 new restaurants, the chain's third-quarter earnings more than tripled from the year-earlier period to $4.7 million; systemwide store revenue rose 134% to $99.3 million.
Nevertheless, the biggest bird west of the Mississippi has invited yet another marketing guru to its nest. Six months after recruiting former KFC USA President Kyle Craig as chief concept officer, Boston Chicken has now hired Blockbuster Entertainment Corp.'s former chief marketing officer, Jim Hilmer, as a consultant working on new menu and store design ideas.
His work is being incorporated into one franchisee's new store format, opening soon in Winston-Salem, N.C. The facility boasts a new interior design and graphics; the menu offers meat loaf, ham, fresh baked bread, soup and desserts.
Mr. Hilmer engaged Blockbuster agency D'Arcy Masius Benton & Bowles, St. Louis, to design marketing support for the additional menu items. But DMB&B backed out of the project a few weeks later, citing a conflict with client Burger King Corp., whose national media buying the agency handles. Bayer Bess Vanderwarker, Chicago, still has the main $35 million ad account.
Competing chains won't make it easy for Boston Chicken.
KFC Corp. early next year will broaden its commitment to home-style cooking with the opening of Colonel's Kitchen, a test unit in Dallas serving chicken and other entrees along with an array of side dishes. Under the direction of new USA President-CEO David Novak, KFC is the latest to experiment with Boston Chicken's style of upscale fast-food.
In April, KFC's new image campaign from Young & Rubicam, New York, will salute all the chain's chicken choices, including the Colonel's Gold rotisserie chicken. A KFC source said the image spots won't include the actor who portrayed founder Colonel Sanders in commercials this year.
With 200 stores in 35 states, the third national competitor, Kenny Rogers Roasters, in November hired the Morrison Agency, Atlanta, for the chain's account, which next year will grow to $3 million to $5 million. Tinsley Advertising, Miami, previously handled.
Kenny Rogers Roasters last month also doubled to 16 the number of side dishes it offers. Additions include corn bread stuffing and a baked whole sweet potato.
Jeffery D. Zbar contributed to this story.