1. What is Boston Chicken’s strategy? What are its key success factors and risks? 2. Using ratio analysis, analyze how Boston Chicken is performing. 3. What are the key assumptions behind its accounting policies and do they reflect the risks? What adjustments would you make?
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Harvard Business School
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Boston Chicken, Inc.
Perhaps no company better captures the spirit of the new economy than Boston
Chicken Inc., which aims to do for the rotisserie what Colonel Sanders did for the deep
fryer. . . . There is nothing particularly new about rotisserie chicken—those birds have been
turning succulently in delicatessen windows for generations. But Boston Chicken is not
really about poultry—it is about developing a market-winning formula for picking real estate,
designing stores, organizing a franchise operation and analyzing data. These are Boston
Chicken’s innovations—trade secrets that can be every bit as valuable as a new drug or
computer chip design. With them, Boston Chicken has not only developed the secret for
delivering generous quantities of home-cooking at affordable prices, but also transformed what
had been a mom-and-pop business into a new national category—take-out home-cooked
food—that potentially can draw business away from both supermarkets and restaurants.
The Washington Post, July 4, 1994
Boston Chicken was founded in 1989 by Scott Beck to operate and franchise food service
stores that sold meals featuring rotisserie-cooked chicken, fresh vegetables, salads, and other side
dishes. The firm’s concept was to combine fresh, flavorful, and appealing meals associated with
traditional home cooking with a high level of convenience and value. Meals cost less than $5 per
person, were sold in bright, inviting retail stores, and were available for take-out or for on-site
consumption. “Our strategy,” Beck noted “is to be a home meal replacement. Our number one
competitor is pizza.”1
To help operationalize his vision, Beck assembled a management team with considerable
prior experience in both the fast-food business and franchising operations. Beck himself became one
of the first and largest franchisees for Blockbuster Video while still in his 20s. He later sold his
franchises back to the parent company for $120 million. Other top executives included the former
president of Kentucky Fried Chicken, and former vice-presidents of Bennigan’s, Taco Bell, Red
Lobster, Chili’s, and Baker’s Square.