Former McDonald’s exec takes over Bojangles’, looks to grow: ‘I can envision a lot more’

A new chapter has begun for Bojangles’.

This week, the sale of the iconic Charlotte chain to two New York firms, Durational Capital Management and The Jordan Company, was completed. Right away, the new owners announced that two former McDonald’s executives will lead Bojangles’: José Armario becomes the company’s new CEO, and Brian Unger is the new chief operating officer.

The change in ownership and leadership marks the start of a new era for Bojangles’, which opened its first store on West Boulevard in 1977. New leaders will look to correct the course for the company, which has seen its financial health deteriorate in the less than four years since going public.

Over the years, the company’s share price plummeted, sales softened and growth slowed. Industry insiders speculated for months that a sale was imminent. When the sale was announced in November, the new owners said Bojangles’ headquarters will remain in Charlotte, and it will be run as an independent, privately held company.

Moving forward, customers can expect that popular items will remain on Bojangles’ menus, that new restaurants will open across the country and that Bojangles’ will invest in new technology, according to Armario, 59, who was traveling Wednesday and responded to questions via email.

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Already the new CEO has been interacting with Bojangles’ customers on social media, something industry experts have said can help cultivate relationships and strengthen brand loyalty.

“We will be working closely with our company and franchise restaurant teams to improve our operations each and every day. Let me know how we’re doing from time to time,” Armario said via Twitter in response to a customer who voiced concern about customer service and store quality.

Armario also didn’t rule out adding locations on the West Coast, something that hasn’t been done before in Bojangles’ history.

“We will be working on this,” Armario said in response to a Los Angeles Bojangles’ fan who suggested opening a restaurant in his city.

New leaders likely will try to avoid a growth-related error the company made decades ago: Bojangles’ opened new restaurants outside the Southeast in the 1980s that floundered, and the chain shrank to fewer than 200 restaurants. It now operates 759 locations, most in the Southeast.

Armario said that he sees franchises leading the way on growth, mostly in the Southeast, but also in newer markets such as the Mid-Atlantic and Midwest. It’s more profitable for fast-food companies to sell the rights to operate a brand to franchisees than it is for the company to sell directly to customers, according to a recent report in the trade publication Restaurant News.

“I wouldn’t want to put a definitive number out there in terms of restaurants, but I can envision a lot more Bojangles’ 10 years from now,” Armario said in an email.

New leaders

Bojangles’ longtime former CEO Randy Kibler has led the company on an interim basis since the sudden departure of Clifton Rutledge last March. With the addition of Armario, Kibler will retire, “as a result of the merger and not due to any disagreement with the company on any matter,” Bojangles’ said in a securities filing.

Bojangles’ two top leaders bring decades of combined executive restaurant experience to the company.

Unger, Bojangles’ new COO, was with McDonald’s for 25 years as senior vice president of operations, and most recently was COO of Long John Silvers, a quick-service seafood chain based in Kentucky. Armario held a number of high-level roles during his 19 years at McDonald’s, from president of McDonald’s Chile to executive vice president of supply chain, development and franchising.

A 2009 profile in the Miami Herald discussed how Armario spearheaded the expansion of McCafes in Latin American markets, as well the chain’s home delivery service.

“To me it’s about giving the consumer what they want, when they want it. That’s our growth strategy for now and the long-term,” Armario told the Herald.

Delivery is something that Bojangles’ has tested in Charlotte. It’s an offering that experts say could be important to master to keep pace with competitors.

“We, like so many others in our industry, are very aware of the importance of technology to our business. We will continue working to meet the technology expectations of our consumers,” Armario said in an email.

This isn’t the first time Bojangles’ has changed hands, ushering in a period of changes.

The first time was in 1982 Bojangles’ founders Jack Fulk and Richard Thomas sold the chain to Horn & Hardart, a now-defunct food services company based in New York. The firm’s management serves as a cautionary tale of attempting to grow a regional company nationally.

The firm grew the chain’s footprint from 34 restaurants to 328 stores at its peak, but the new stores were not profitable. The company lost millions, and the new owners trimmed corporate staff by one-third and closed or re-franchised 100 restaurants, according to March 1988 Observer story.

It is unclear whether new owners plan to close any restaurants or reduce staff at the company’s headquarters. Durational Capital Management and The Jordan Company could not be reached for comment.

We enjoy some incredible, long-lasting relationships with business partners and non-profit organizations across the region, and we have a great team in place at the Support Center. There’s no reason to change any of that,” Armario said.

As the retail and sports business reporter for the Observer, Katie Peralta covers everything from grocery-store competition in Charlotte to tax breaks for pro sports teams. She is a Chicago native and graduate of the University of Notre Dame.