Bojangles’ CEO Clifton Rutledge has only been in Charlotte for a little over a year and a half. But in that short time, he has led the restaurant chain through an initial public offering and is deep into an ambitious expansion plan.
Wall Street is closely watching how the strategy plays out, but Rutledge says the Charlotte-based company won’t grow quicker than it should.
“Wall Street won’t dictate our culture, and it won’t dictate what we do,” the 30-year restaurant industry veteran says. “There may be people who get upset about that, but at the end of the day, we’re going to do what we say we’re going to do.”
In an interview this week, Rutledge covered a wide range of topics, from his background in the business, his growth plans and how he’s trying to stop incessantly checking Bojangles’ stock price since going public. Chief Financial Officer John Jordan also joined the interview.
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Lessons on Growth
Rutledge, 50, got his start in fast food when he was 15 at a Bonanza steak house in Mountain Home, Ark. He worked for them for about a decade, through high school and college.
Rutledge recalls those days of restaurant operations today in meetings that not many CEOs hold: monthly question-and-answer sessions with recently promoted store employees.
“It’s great for me to do that. It’s something I enjoy,” Rutledge says.
Before coming to Bojangles’ last year, Rutledge spent about 14 years at Texas-based Whataburger, and before that, about a decade at frozen yogurt chain TCBY. It’s there, he says, that he learned a big lesson about expansion.
TCBY grew from one store in the early 1980s to almost 1,500 stores in the span of a decade, Rutledge says, before floundering and having to shutter hundreds of stores nationwide.
“I’ve learned more what not to do in this business than what to do,” Rutledge says. “The ‘shotgun approach’ – or as I call it, putting dots on a map – we just won’t do that.”
Instead, Rutledge and his team promised Wall Street investors that growth of the brand would be gradual and measured. They would grow the chain’s store footprint at a rate of 7 to 8 percent a year, roughly the same rate as they’ve been going since before the recession.
The chain currently operates 635 stores, primarily in the Southeast, with about two-thirds of its restaurants in the Carolinas.
Bojangles’ plans to concentrate growth in its core markets and slowly build into adjacent ones, which in turn will become core markets. You won’t see Bojangles’ jumping states, Rutledge says.
A big reason for that? Distribution is easier when markets are close by.
“One store by itself in a city the size of St. Louis or Dallas ... is going to get lost, and that’s why Atlanta has been so successful. That’s our largest growth market this year,” Rutledge says, adding that Atlanta is the “poster child” of what it looks like to grow into adjacent markets.
True to its core
When asked about a consumer preferences for healthy menu options, Rutledge is quick to point out that its ingredients are high quality and food is prepared in-house. And the menu does have healthier options, Rutledge says, like roasted chicken bites and green beans.
“They’re just kind of hidden. I think we need to do a better job of talking about those,” Rutledge says.
The restaurant will remain true to what it’s known for: chicken, sweet tea and biscuits, Rutledge adds. About 80 percent of Bojangles’ customers get a biscuit in some form when they order.
“At the end of the day, we’re not going to get away from our core. A lot of companies, when you try to be all things to all people, you kind of lose what brought you to the dance,” he says.
Adds CFO Jordan: “You will not find any microwaves at Bojangles’.”
This is the first time Rutledge has taken a company public. He now only checks the company’s stock price at noon and at 4 p.m., when stock markets close. “I’ve had to wean myself off that,” he says.
The six months leading up to the IPO, including the full two weeks of travel for the company’s roadshow to showcase the brand to would-be investors, were jam-packed.
“I don’t know if I ever want to do that again,” says Rutledge, who made $4.2 million in total compensation for 2014.
Though days were long, he adds, being able to tell Bojangles’ story to firms who’d never heard of the brand, was “unbelievable,” and responses were “overwhelmingly” positive. (Wall Street thought so, too: Bojangles’ stocked closed up 25 percent on May 8, its first day of trading.)
Rutledge learned the brand first from former CEO Randy Kibler, who volunteered to stay on board for a month after Rutledge came in January 2014. The two still talk on a weekly basis.
“Surround yourself with the smartest people that you possibly can,” Rutledge says.
Kibler is retired now but remains on Bojangles’ board, Rutledge says, but he’s been enjoying spending more time with his grandchildren.
Rutledge, the father of three girls, relocated to Waxhaw about a year and a half ago for the Bojangles’ job. This was his family’s 15th move.
“Charlotte is fastly becoming the best place we’ve ever lived,” Rutledge says.