Boston Market Loses An $11.9 Million Lawsuit

Boston Market has been in crisis for multiple years running, and last week, one of its biggest legal challenges finally came to a head. A judge has ordered the rotisserie chicken chain to pay US Foods $11.9 million after the distributor filed a lawsuit against Boston Market last July over unpaid bills.

Boston Market has been under legal fire from just about every direction possible, but its battle with US Foods marks a major blow. The latter claimed that the restaurant failed to pay for shipments as far back as 2022 and continued to fall behind throughout last year, even after a promissory note established a schedule for Boston Market to repay its supplier.

The judge ruled in favor of US Foods in a "default judgment," because the company had "intentionally dodged their obligations to the court." US Foods had filed the lawsuit against Boston Market in July of last year, but the summary judgment notes that Boston Market's owner, Jay Pandya, did not acknowledge the filing until September. Once Pandya did acknowledge the litigation, he continued to miss deadlines to respond to it.

"Pandya intentionally evaded service, and the failure of all defendants to timely attend to this litigation was purposeful, with no valid excuse for delay," states the summary judgment in part.

Even after this judgment, US Foods is not letting up on Boston Market or Pandya. As of February 2024, the distributor has submitted a separate filing to the courts for additional debt, late fees, accrued interest, and attorney fees. This additional filing includes five counts against Boston Market, which total around $30.7 million.

Desperate times call for desperate measures, and Boston Market is in no position to turn down new franchisees. In an apparent effort to pull itself out of the deep financial drain it's been circling, Boston Market recently updated its franchising process, making it possible for virtually anyone to open a restaurant location.

Under the new system, those looking to open up a Boston Market location could do so "WITHOUT ANY BUY-IN REQUIREMENTS," per the brand's announcement. Interested parties simply have to fill out a questionnaire, which seems more focused on the applicant's ambitions rather than their practical business experience. The program, named Boston Market Connect (BMC), also places an emphasis on opening "non-traditional locations" such as "within your restaurant, deli, gas station, or any suitable establishment." Basically, it sounds like the company will take whatever it can get.

In addition to opening itself to as many franchise opportunities as possible, the chain also announced it would be releasing a new menu item every six weeks. The new dishes are each inspired by food from other countries and are described as "a celebration of history [that] serves as a testament to Boston Market's enduring commitment to shaping the future of dining experiences."

The brand closed the most locations out of any restaurant chain in 2022. Restaurant Business reported that Boston Market had closed 41 units by the end of that year, which accounted for 12% of its overall footprint. By August of 2023, the chain had closed 50 additional units.

An $11.9 million hit is just one more headache for this once mighty rotisserie chain. Lowering the barrier to entry for new franchise locations is an interesting strategy, but one that might turn out to be little more then a band-aid approach. Time will tell, but it may be time to take the chicken off the spit.