McDonald's sells off Boston Markets

[Toliver]

"McDonald's Agrees to Sell Boston Market"

McDonald's Corp. said Monday it agreed to sell its meat-and-potatoes Boston Market restaurant chain to private equity firm Sun Capital Partners for an undisclosed sum.

"This is consistent with our successful strategy to focus on brand McDonald's....a strategy that continues to deliver results," McDonald's spokesman Walt Riker said in a statement.

Boston Market (formerly Boston Chicken) wasn't a good buy in the first place. The chain was heavy in debt when purchased by McDonald's and it's still not doing well.

Since then, McDonald's has pared down its partner brands, shedding Chipotle Mexican Grill Inc....Donato's Pizza and its stake in Fazoli's Italian fast-food restaurants.

I hadn't realized they dumped the Chipotle chain, whose stock has been doing quite well recently since the sell-off.

And in a second story:

"Snack wraps, iced coffee boost McDonald's July sales 6.5%"

They've introduced a new Chipotle Chicken Snack Wrap (ironic name given they've sold off their Chipotle chain) that's supposed to be selling well.

McDonald's said same-store sales increased 9.9 percent in Asia, the Middle East and Africa, helped by fish sandwiches in China as well as McFlurries and shrimp pasta salad in Japan.

Does anyone know if the fish sandwiches sold in Asia are the same that are sold in the US? Or are they different?

[jsmeeker]

I didn't know they sold of Chipotle either. Did they always have full ownership of it, or only a partial stake? Who did they sell it too?

I actually think Chipotle is one of the better big fast food chains out there. They seem to be doing some real cooking there.

[Toliver]

I didn't know they sold of Chipotle either.  Did they always have full ownership of it, or only a partial stake?  Who did they sell it too?

I actually think Chipotle is one of the better big fast food chains out there.  They seem to be doing some real cooking there.

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I agree. Though I'm not a big fan of burritos with rice and beans, I like Chipotle burritos.

As for why McDonald's sold off Chipotle, this seems to be a recent trend among some companies. They sell off parts that don't have anything to do with their main or core product. It's sort of the opposite of diversification.

PepsiCo is another example of this. They sold off their fast food businesses (Pizza Hut, Taco Bell, etc) to concentrate on their core products - soft drinks.

And to bring it back on subject, McDonald's, known for its strong bond with Coke, now sells Pepsi non-carbonated drink products in some areas.

[WiscoNole]

Boston Market is great...there just aren't enough of them around. At least where I am.

[SundaySous]

I've met two different upper management types of McDonald's socially. Twenty years apart and they mentioned what most people don't realize is that we are a realestate company.

Most of the McDonald's are leased from McDonald's corporation by the franchisees. Even most of the ones in malls and office buildings are longterm leases they release at a profit.

Be interesting to know if they still own the properties those Boston Markets sit on.