After failed Chapter 11 bankruptcy, fast-food chain tries comeback

When a company files for bankruptcy, it gets a chance to negotiate with its creditors, vendors, and landlords. Sometimes it can gain concessions and find new money that allow it to keep operating.

In many cases, the various businesses and people a company owes money to see value in its survival. Maybe the bankrupt operation ran out of money because of a once-in-a-lifetime situation like the Covid pandemic or some other catastrophic event.

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Many vendors and landlords see the value in keeping a once-good customer afloat, even if it means forgiving some debt or taking equity in return for money owed. 

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But in order for that to happen, a company has to be able to successfully file for Chapter 11 bankruptcy protection with a United States district court. Boston Market owner Jignesh “Jay” Pandya has made some financial missteps over the past few years.

The chain, which used to count McDonald’s as a part owner, essentially no longer exists. It has a couple of dozen locations that carry its name, but the corporate entity has been largely out of operation, aside from the occasional press release.

Boston Market has been on a downward spiral

While Boston Market traces its roots to a Boston suburb, its most recent headquarters was in Colorado. That location was seized in May 2022 by the Colorado Department of Revenue over $329,00 in unpaid sales and payroll taxes. 

The chain has also been quickly shrinking, as all of its Florida and Connecticut locations abruptly shut down in late 2023.

Boston Market’s biggest problem may be its massive debt to its key supplier, US Foods. The chicken chain owes US Foods $11 million, and it faces over 140 lawsuits in a variety of state and federal courts over everything from unpaid wages to overdue rent and vendors who have not been paid.

It’s hard to be a rotisserie chicken chain when your vendors won’t sell you chicken.

A Chapter 11 bankruptcy filing might allow the company to fix those issues, but courts have twice rejected Pandya’s efforts to personally file. In his most recent attempt in March 2024 to file, the court actually banned him from trying again for six months.

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“It appears unlikely Boston Market will have the finances to stay afloat or grow,” RetailDive shared at the time.

Boston Market, however, while it may be mostly defunct, has soldiered on, and Pandya has a new plan for its comeback.

Boston Market adds a new location

It’s important to note that Boston Market did not fail simply because of financial mismanagement. It also saw an increase in competition in the space it once pioneered.

Yes, Boston Market might offer a better product, but Costco sells a whole rotisserie chicken for $4.99. That makes it very hard to stay competitive, but a new restaurant operating under a license from Boston Market has opened in Buffalo.

Under his latest attempt to revive the brand, Pandya will license the concept to others who want to operate a Boston Market location, according to Buffalo Business First.

Pandya claims he has already received hundreds of inquiries about reopening restaurants all over the country. 

“He’s licensing the concept to other owners who recognize the potential of the brand because the current business is not set up to accept franchisees,” according to the report.

In theory, these new locations would not be liable for any of the bills owed by the parent company. They would pay Pandya a fee in exchange for the branding (and maybe some recipes, but not the support a traditional franchisor would offer).  

This follows an attempt by the cash-strapped owner to license the concept to non-traditional players.

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“Boston Market is forging relationships with various food service management companies across the United States to develop unique restaurant locations. We’re looking forward to partnering with industry leaders that are developing unique opportunities for restaurants in airports, hospitals, hotels, military bases, and university or college campuses,” it shared on its website.

The chain does not list any locations using that model on its website. 

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