The U.S. Bankruptcy Court for the District of Arizona has approved the Plan of Reorganization of Boston Chicken, Inc. under which McDonald’s Corporation (NYSE: MCD) will acquire the Boston Market business.The parties announced that they expect to complete the transaction near the end of this month.
“We’re pleased that the court has now cleared the way for Boston Market to emerge from bankruptcy and become part of the world’s largest foodservice company,” said J. Michael Jenkins, Chairman and Chief Executive Officer of Boston Chicken. “Thanks to the hard work of our 15,000 employees, we’ve sustained the momentum that began a year ago, with positive year-over-year sales, profits and operating results. With the benefit of McDonald’s resources and expertise, we’ll now be able to provide our customers with an even better restaurant experience—and our employees with great new growth opportunities.”
“The Boston Market business has achieved excellent results over the past year and we’re very excited about the opportunity to grow this terrific brand, said Jeffrey B. Kindler, executive vice president at McDonald’s.And, as previously announced, we will also begin converting certain sites over the course of the next year to the McDonald’s, Donatos Pizza, and Chipotle Mexican Grill brands, allowing us to support the development of those concepts and further enhance shareholder value.”
As part of the bankruptcy process, there is the unique opportunity to reject unfavorable leases on about 100 underperforming restaurants without incurring the usual termination costs—while improving the lease terms on numerous other sites. “This opportunity—combined with the great work of Boston Market’s employees improving restaurant operations and customer satisfaction—allows the business to emerge from bankruptcy with a strong base of profitable restaurants,” Kindler added.
Even with the closing of the rejected sites and potential conversions, a significant majority of the existing sites will remain Boston Market Restaurants. “We intend to invest in existing restaurants and even add some new ones in order to provide an enhanced restaurant experience for Boston Market’s customers,” Kindler added.
Kindler also reiterated Boston Market’s commitment to retaining employees. “Because of their efforts in putting the business back on solid footing, we are committed to offering employment and career opportunities to all affected Boston Market restaurant employees, either through comparable positions at other Boston Market locations or other of McDonald’s brands,” he said.