Food industry veteran has it his way; Chuck James seals whopper deal, becomes Burger King's largest black franchisee.

Food industry veteran Charles H. "Chuck" James III is now Burger King's largest African American franchisee. In a deal announced in November, James, who is CEO and managing owner of C.H. James Restaurant Holdings L.L.C., purchased 37 Stores in the greater Chicago area.

James created C.H. James Restaurant Holdings, an affiliate of C.H. James & Co., in 2003 by leveraging a partnership with Goldman Sachs' Urban Investment Group. Franchising wasn't how the 46-year-old entrepreneur envisioned growing his fourth-generation family business. But after unsuccessful attempts at identifying large acquisitions in the food processing industry, James was urged to consider the quick service restaurant model.

When 26-year veteran franchisee Sheldon T. Friedman announced plans to retire, James and Goldman Sachs jumped at the offer. "We liked the positive momentum that Burger King was experiencing and saw a good opportunity with the 37 stores in Chicago," says James. October marked the ninth consecutive month of positive U.S. same-store sales for the fast-food chain.

After looking at several transactions, Kevin Jordan, managing director of the Urban Investment Group, agreed that Burger King (one-third of which is owned by Goldman Sachs) made the most sense. The firm expressed confidence in James' ability as an operator based on his industry experience as a supplier. Jordan also says the deal "was particularly attractive because it was a great geographic cluster of stores, all within reasonable proximity to one other, in ... one of the top markets in the country." (For a list of James' Chicago-area locations, visit www.blackenterprise.com/bkstores.) An undisclosed amount in equity financing from Goldman Sachs and Bank of America Restaurant Financing Group was used to close the deal on Nov. 1, 2004, making it the second largest Burger King franchise in the region. James believes this deal alone will bring in $50 million for calendar year 2005.

Now primarily focused as a holding company, C.H. James & Co. still provides food distribution services to Darden Restaurants (Red Lobster and Olive Garden) and recently concluded a distribution contract with Wendy's. Over the years it has serviced some of the top names in the industry, including McDonald's and YUM! Brands, which includes Kentucky Fried Chicken, Pizza Hut, and Taco Bell.

James hopes that having more minorities involved in purchasing decisions will help increase opportunities for minority suppliers. This is a key focus of Burger King's Minority Franchise Association, headed by Valerie Daniels-Carter, president and CEO of V and J Holding Cos. Inc. (No. 38 on the BE INDUSTRIAL/SERVICE 100 list with $90 million in sales), who owns 35 restaurants in Milwaukee and Detroit.

This isn't the only recent acquisition of a large number of Burger King franchises by an African American; in July, former NBA star Magic Johnson bought 30 existing franchise stores in Atlanta; Birmingham, Alabama; Dallas; and Miami. And Burger King says it has more plans for diversity among its franchisees. "We know that our consumer base is very strong from an African American standpoint," says Clyde Rucker, senior vice president of Burger King Corp. "We want to continually strive to reflect our consumer base." Currently, there are about 50 African American franchisees who own about 300 of the more than 11,000 Burger King franchises--a number Bucker insists Burger King is committed to growing.