Bojangles' chain will be sold to a Boston private equity firm

The CharlotTe ObserverJuly 26, 2011 

A story on Page 4B Tuesday about the sale of Bojangles' included inaccurate financial information. The fast-food chain projects total revenue of $800 million this year.

CHARLOTTE -- Charlotte's homegrown biscuits-and-fried-chicken chain will soon be owned by a private equity firm based in Boston. Falfurrias Capital Partners said Monday that it has a deal to sell Bojangles' to Advent International for an unspecified sum.

"I really couldn't be more excited for the brand and what's in it for the franchisees," Bojangles' CEO Randy Kibler said.

The chain's current management will remain with the company, and Bojangles' will still be headquartered in Charlotte.

"While the ownership will change, I think that it'll continue to be a locally run and locally managed place," said Hugh McColl Jr., co-founder of Charlotte-based Falfurrias, owner of Bojangles'.

Founded in 1974 at West Boulevard and South Tryon Street, Bojangles' has since grown to more than 500 locations. Falfurrias - a fund started by former Bank of America CEO McColl and former BofA chief financial officer Marc Oken - bought Bojangles' in 2007.

Falfurrias spurred rapid growth, expanding Bojangles' to 503 stores from 377 four years ago. During that time, revenue rose 40 percent. This year, the company projects total revenues of $800 million.

Oken said Falfurrias has wrestled for months over whether to part with Bojangles' now or keep expanding the company.

"We went through that discussion at the beginning of the year within the firm," Oken said. "We talked to several investors, and really the key point was we're not sure what things are going to look like."

The firm's biggest concerns were the fragile state of the economy and the higher cost of corn driving up chicken prices.

In the end, they decided it was time to lock in profits. "It turned out to be a good decision," Oken said. "Things are a little more troubled now. The debt markets ... are a bit more choppy."

The Charlotte Observer first reported that Falfurrias was looking to sell Bojangles' in February. The deal with Advent is expected to close in mid-August.

McColl said that he thought the chain could double in size, but doing so was beyond the scope of Falfurrias, which focuses on midsize companies.

"In all candor, if we had enough capital, we probably would have doubled the brand again before selling," he said Monday. "(Advent) can take advantage of the brand we built."

And, McColl said: "We'll make a lot of money."

That's a far different from the mid-1980s when Bojangles', founded in Charlotte by entrepreneurs Jack Fulk and Richard Thomas, fell on hard times and shrank from nearly 350 stores to fewer than 200.

When Falfurrias, along with Carolina Panthers owner Jerry Richardson, bought the chain, they focused on expansion in the restaurant's Southeast home states and developing stores in communities adjacent to existing Bojangles'.

"You won't see us opening 20 stores in Arizona," Oken said. "People never heard of Bojangles' there."

In 2007, the firm brought in Kibler, a former Richardson employee who used to head Hardee's.

Under Kibler, Bojangles' started to refurbish stores at a cost of $150,000 each, an initiative that has reached 60 percent of company-owned stores and 40 percent of franchised locations.

Kibler said he sees plenty of room for the chain to grow in the Southeast and isn't focused on expanding nationally.

"There's a point in time when that could be the proper move," he said. "But if you just look at the adjacent states we operate in, there's room for us to put another 500 restaurants and still not be fully penetrated."

McColl and Oken said Falfurrias is currently considering other investments, possibly in a financial company.

"We see a lot of opportunity in the financial sector," McColl said. "Candidly, a lot of companies' values have been beaten down, and there may be a lot of opportunity lying there, particularly in specialty companies."

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