The dynamic duo of franchising.

The restaurant franchising industry has always held the promise of success for African Americans. Unfortunately, racism, unscrupulous practices by franchisors, poor management skills and other barriers have prevented many from actually capitalizing on this promise.

Ronald Taylor and his wife, Ardena, have risen above those obstacles. As the west coast area real estate development manager for Boston Chicken Inc., Ron is one of the highest ranking African Americans at the upstart rotisserie chicken franchise company. He's a skilled negotiator who has become a pivotal player in one of the fastest expansions in the restaurant industry in recent years.

Ardena became franchise business manager for a block of Burger King franchises that were faltering in the heated competition of the Southern California market. In less than two years, she turned things around, producing a 15% increase in overall sales among her franchise units. Now she has set off to duplicate that success as a Fast Track Ownership candidate, which will land her a Denny's franchise.

In essence, Ron is one of a growing number of African Americans moving into management roles within franchise companies, while Ardena exemplifies those who are capitalizing on franchise ownership opportunities. Together, they represent a potentially bright future for African Americans in the franchising industry. Whether on the corporate side or through ownership, African Americans and franchising can form a truly beneficial strategic alliance.

BOSTON CHICKEN'S GOOD EGG

FROM HIS CORNER OFFICE WINdow, high above central-Anaheim's business district, Ronald E. Taylor surveys the surrounding area with a confident smile. With his well-manicured fingers, he adjusts his imported silk tie, and with one last check of his date book, he grabs his briefcase and is out the door. He walks with purpose.

Maybe some don't consider rotisserie chicken serious business, but for Taylor, each scheduled appointment is a potential multimillion-dollar development deal to be closed. As Boston Chicken Inc.'s West Coast area real estate manager, he's been charged with completing the largest phase of one of the restaurant industry's fastest expansions in recent years. The 300-store, $600 million, four-year development plan for Sacramento and San Diego, Los Angeles and Orange counties is perhaps the most critical segment of Boston Chicken's whirlwind expansion, designed to blow the feathers off the competition.

After the little-known Chicago-based family restaurant chain successfully completed a $38 million initial public offering in November 1993, it set off on a breakneck pace, targeting a previously underdeveloped niche--the Home-style Meal Replacement Category (HMRC). By providing fresh, home-style meals-to-go--such as rotisserie chicken with mashed potatoes, fresh vegetables and macaroni and cheese--Boston Chicken gave fast-paced professionals and families an appealing way to stabilize their eating habits.

The results were amazing. In less than two years, Boston Chicken became a restaurant industry leader. The chain swept from the Northeast to the Midwest, opening more than 317 stores and producing $96.2 million in revenues during 1994 alone.

As Paul Westra, research analyst for Salomon Brothers in New York, explains, "Boston Chicken's accelerated expansion plans are necessary to discourage the competition in order to maintain a strong market share within the Home-style Meal Replacement Category."

At press time, Boston Chicken, now headquartered in Golden, Colo., had 645 units nationwide in 30 states (including the District of Columbia) developing at a rate of almost one unit per day. Now, the successful development of the West Coast could put the company in position to set the pace and define the newly established HMRC niche.

Taylor is critical to this strategy. The ambitious 31-year-old has the responsibility of maintaining the company's marketing momentum by keeping site identification and development time to a minimum. He must also maintain site consistency within his area (ensuring that each site will produce a similar level of revenues). When he's engaged in meeting these challenges, watch your back. Taylor brings an "all-or-nothing" attitude to the negotiating table: He wants it all, and if you're not careful, he'll leave you with nothing.

"In this business, there is little room for mistakes," says Taylor in his cool, commanding tone. "When I negotiate the acquisition of a site, I understand why that site makes sense for Boston Chicken and what the benefits are."

Since former Boston Chicken Area Developer Andre Rice lured him to the company, Taylor has exhibited a great talent for negotiating favorable deals for the franchise giant. Between September 1993 and October 1994, he was instrumental in the completion of 50 of the 80 stores in Boston Chicken's $160 million development of the Chicago market, making him one of the company's most productive real estate developers. Taylor's blend of creativity with a "win-at-all-cost" style complemented Boston Chicken's rapid growth strategy nicely.

Taylor's performance in Chicago and his connections with upper management earned him the opportunity to help implement Boston Chicken's aggressive growth strategy in Southern California. Behind the scenes, some say his self-confidence, bordering on arrogance and self-promotion, may have helped him as well. But his record speaks for itself.

Prior to joining Boston Chicken, Taylor served as real estate manager for PepsiCo in Southern California and Chicago from July 1991 to September 1993. His master's degree in real estate development from the University of Southern California helped prepare him to play a major role in negotiating the development of 60 real estate transactions totaling close to $75 million for PepsiCo's Taco Bell franchises in Illinois and Wisconsin.

Kerry Coin, president and chief operating officer of Boston West, a Boston Chicken area-development company, says he chose Taylor to develop the most competitive market in the country because, "Ron's creative, energetic and, most importantly, he gets the job done. No excuses, he just produces."

Taylor, who learned many of his dealmaking skills at his father's Longview, Texas-based auto supply store, says, "Strong negotiation skills are critical to one's survival in this business. I make it a point to know the hand of the other players prior to coming to the table."

STRATEGIC DEVELOPMENT

Unlike most franchise companies, Boston Chicken uses area developers, mid- to large-size companies that agree to construct and manage large blocks of regional franchises for the company. The company currently has agreements with 22 area developers across the country. The eight largest, including Boston West, which Taylor works for, are being financed by Boston Chicken. The theory behind this development strategy is that signing area development companies to develop hundreds of stores is more efficient and less risky than selling single stores to franchisees.

Taylor uses several key variables in choosing the sites that Boston West will ultimately develop. First, the demographics of a particular area are assessed. Boston Chicken targets placement of its units in areas where the median household income ranges from $35,000 to $40,000. Next, the area surrounding the proposed unit site is analyzed. High traffic areas near malls, movie theaters and shopping centers rank high on Boston Chicken's placement criteria. "Although our growth is rapid, it's strategic," Taylor explains.

And it must be to stay ahead of the quickly growing rotisserie chicken market. Although Boston Chicken's most highly perceived competitor is KFC, it considers supermarket delis (many of which have long sold rotisserie chicken) and moderate-sized retail take-out establishments as its primary challengers. Analysts say these competitors are all trying to capitalize on the much-touted superior "nutritional value" of a rotisserie chicken meal and side dishes. Yet, according to the Tufts University Diet & Nutritional Letter, there are more fat and calories in Boston Chicken's $5.99 half-chicken plate than in a $4.47 McDonald's meal consisting of a Big Mac, large fries and chocolate shake.

Boston Chicken officials point out that the company has never tried to say its food is healthier. Rather, their emphasis has always been on providing variety. "With entrees ranging from meatloaf to turkey to ham, and sides ranging from vegetables to stuffing to fruit salad, you can choose to be naughty or nice," says Coin. This quest for variety has led the company to change the name of all its franchises to Boston Market. However, the company will still be known as Boston Chicken.

Boston Chicken has opened 37 stores in California since Taylor took over in October 1994. With the help of a five-person team, he expects to build 40 new stores by the end of 1995, 40 additional stores in 1996 and another 50 in 1997. "Ron's creativity in his deal-making and his relentless motivation set him apart from the rest," says Taylor's immediate supervisor, Mike Debrota, vice president of real estate for Boston West.

Taylor admits that his wife Ardena and son always have him preparing for tomorrow, but he won't reveal any big plans. "I enjoy my job and foresee a promising future with Boston Chicken," he says. But with youth on his side and many untold deals on the horizon, you can be sure that Ron Taylor won't put all his eggs in just one basket.

GOING FOR A DENNY'S GRAND SLAM 

THERE AREN'T MANY THINGS that will get most folks out of bed before dawn, but Ardena Taylor has plenty. Caring for her six-month-old son is her first priority, even if it is 4:00 a.m. Her sleeping husband, Ron, gets a peck on the cheek that he probably won't remember, and then she's off to do grunt work at a local Denny's restaurant.

On the surface, it might appear that for Taylor, working at Denny's would be a major letdown, hardly something she would jump out of bed to do. After all, the attractive Loyola Marymount University M.B.A. grad was Southern California district franchise manager for Burger King Corp. up until June. Why would she trade managing a district of 23 franchise groups, representing 63 restaurants, for waiting on customers, busing tables and mopping floors at a Denny's?

With her neon smile, Taylor explains that all this hard work is part of a training process. For her, it's the way to fulfill a lifelong dream--franchise ownership. Taylor is one of 14 minorities participating in Denny's Fast Track Ownership Program, which prepares candidates to be franchisees within one to three years. The success she achieved managing franchises at Burger King convinced Taylor that she could do for herself what she had done for them. Furthermore, Taylor, a devout Christian, believes it's important for African Americans to establish a tradition of business ownership for their children.

"It has always been my dream to leave behind a legacy--something my children can look forward to as their own," says Taylor. "By growing a multi-unit Denny's restaurant business, I will be able to do just that."

Growing a megafranchise business is a lofty goal for a 32-year-old, but Taylor's experience and successful track record show that she's up to the task. After receiving her undergraduate degree in business administration from the University of Missouri, Taylor became a sales rep for Pfizer Laboratories in 1987. She quickly soared to the top, maintaining the highest sales quota in the Los Angeles region from 1989 to 1991.

Then Taylor joined Burger King in August 1993. She was assigned to one of the toughest districts to manage: Southern California, whose restaurants received the company's worst ranking in store performance and customer satisfaction. Taylor quickly formulated a business plan for each of the district's 23 franchise groups and prepared quarterly business reviews to monitor progress. She also developed customized restaurant marketing programs and specialized sales and operational strategies. Her efforts led to a 22% increase in customer traffic and a 15% increase in sales for her district in the first year.

"Our 99 cent Whopper promotions allowed franchisees to increase revenues substantially," says Taylor. And to make sure quality standards were maintained, Taylor visited each store "to communicate the importance of quality to my franchisees, letting them know we could not afford to compromise Burger King standards."

Taylor's former manager, Charles Dooly, a former Burger King Corp. vice president, says, "Ardena demonstrated an excellent use of a strong business skill base and effectively handled the everyday business decisions as a franchise sales and service manager." In addition, Dooly says Taylor's uncanny ability to win the respect and cooperation of her peers and co-workers allows her to achieve optimum success.

Taylor passed on her expertise in sales and service management to the franchisees she managed. Earl Norsworthy, one of the Burger King franchisees in Taylor's old territory, says, "Ardena showed me that the little things--customer service, quality control and store cleanliness--can make a big difference in my sales."

Norsworthy, who also owns a Denny's franchise, was so impressed with Taylor that he recommended her to be considered for Denny's Fast Track program. After four months of extensive application reviews, background checks and interviews, Taylor was accepted into the program in June. According to Sandy Gyenes, human resources director for Denny's West Coast in Irvine, Calif., "Ardena's a natural." Gyenes says that Taylor is accelerating through the training using her successful experiences managing Burger King franchises. Upon completing the program, Taylor will be offered the opportunity to own and operate a Denny's franchise, which could be located anywhere in the U.S. Annual sales for company-owned stores total $1.25 million.

Flagstar Companies Inc. would certainly welcome Taylor's success. The $2.7 billion restaurant company has been struggling to halt three years of declining customer traffic and stagnant revenues at Denny's, its largest subsidiary. Denny's operates around 1,000 of Flagstar's 2,700 moderately priced restaurants, which also include the El Pollo Loco and Hardee's franchise chains.

Denny's hasn't added many franchises during its slump. Revenues have remained virtually unchanged since 1992, growing slightly from $1.49 billion to $1.55 billion in 1994.

Some believe Denny's doldrums are directly related to a series of racial discrimination claims in 1993 for its alleged mistreatment of African American customers. Two of the 4,300 claims, filed by African American customers who said they were required to prepay for their meals or were refused service, resulted in settlements totaling $54 million. Denny's also struck a Fair Share Agreement with the NAACP shortly after the settlements, promising an estimated $1.01 billion in business and employment opportunities to minorities over the next seven years.

Denny's image is still suffering from the effects of the settlements, but that isn't all that ails the national chain. Ron Paul, a Chicago-based restaurant consultant, says, "Denny's is part of the family dining segment, which is being squeezed out by the fast-food segment [McDonald's and Burger King], which offer lower prices, and the casual dining segment [Friday's and Bennigan's], which meet customers' demands for a more entertaining environment."

With all the challenges Denny's faces, one might wonder whether owning a Denny's franchise is a smart investment. But Taylor has a can-do attitude. "The key to making this thing work is to take it one day at a time," she says. "With Denny's support, my experience and desire to excel, and our combined philosophy on customer satisfaction, it must work."

And it is working. Karen Randall, director of public relations for Flagstar, says Denny's is spending an average of $250,000 "re-imaging" each of its stores as part of a $1.7 billion restructuring plan that began in 1994. New decor, furniture and lighting are all part of the massive makeover. Stores that have completed the re-imaging process have produced 15% to 20% better revenues than standard Denny's franchises, Randall claims. As a result, Denny's has reported a 32.6% increase in first-quarter operating income, from $22.9 million to $30.4 million, over last year's first quarter. "We expect that 30% to 40% of Denny's 978 company-owned restaurants will be re-imaged by year-end," says Randall.

Other initiatives are also providing a lift. Analysts say that introducing the $1.99 Grand Slam breakfast value pricing strategy allowed Denny's to compete with industry pricing trends while increasing sales and store traffic in 1994.

When Taylor receives her franchise, she will have to face the market realities on her own. However, being a Fast Track "graduate" will provide several advantages. She'll receive a fully operational, up-and-running store with established customer traffic, employees and a management staff. Plus, she'll get full financing to make her purchase. The Denny's franchise fee is $35,000, plus $1.2 million to $1.5 million to acquire a new franchise property. "Under the program, I can realize my dream of owning a business with far less financial burden," says Taylor.

A few more months of waking up at dawn and Taylor's dream will be a reality. She embraces the challenge that is set before her. "I know this is what I was meant to do."