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Bojangles': Low Price And Strong Management

Summary

Management has handled expansion very well, considering they held their margins steady through sizeable unit growth.

Operating margins are impressive - almost in line with more mature publicly traded restaurant groups like Panera Bread.

Comparable store sales is strongly positive for the past five years, but their AUV of $1.8 million is impressive.

There's no dearth of Southern-inspired foods in the United States. Brands like Popeye's Louisiana Kitchen are proliferating by the thousands across the nation, and at least three dozen brands offer some variation of chicken-based fare.

One of the up and coming brands in this segment of fast casual cum quick service restaurants is Bojangles', Inc. (NASDAQ:BOJA). Serving up a delectable menu of fried chicken, biscuits, coleslaw, green beans, dirty rice and several other scrumptious Southern foods, this delightfully delicious brand is so popular that its stores make more than a third of their revenue before 11 am!

Founded in North Carolina in 1977, this 38-year-old company has grown into a 646-strong chain with outlets in 11 states, District of Columbia and Honduras. They have also experimented with franchise units in places as far away as Ireland and China.

Unit Growth

Unit growth has been steady, with more than 100 net additions in the last 5 years. The thing that sets them apart from most other fast casuals is that they're growing franchise units at approximately the same rate as corporate outlets. It's a 58-42 ratio at the moment, and both are growing neck and neck. As of June 2015 franchisee units numbered 379 versus 267 run by HQ.

It is refreshing to see the company giving equal attention to both company-owned and franchised restaurants; and unit growth has been steady for both. In some ways it...


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