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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Act of 1934
Date of Report (Date of earliest event reported): January 31, 1997
BOSTON CHICKEN, INC.
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(Exact name of registrant as specified in this charter)
Delaware 0-22802 36-3904053
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(State or other (Commission (IRS Employer
jurisdiction of File No.) Identification No.)
incorporation)
14103 Denver West Parkway, P.O. Box 4086, Golden, Colorado 80401-4086
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(Address of principal executive offices)
(303) 278-9500
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(Registrant's telephone number, including area code)
Not applicable
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(Former name or former address, if changes since last report)
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Item 5. Other Events.
On January 31, 1997, Boston Chicken, Inc. (the "Company") announced its
agreement to make a $17 million loan to Progressive Food Concepts, Inc.
("PFCI"), a company formed, among other things, to (i) explore, together with
the Company, taking a line of Boston Market(R) prepared foods into alternate
distribution channels, potentially in partnership with supermarkets (although
PFCI does not currently have any rights to the Boston Market brands), and (ii)
make an investment in Harry's Farmers Market, Inc., an owner and operator of
retail food markets. The Company has the option to convert the loan into a
majority interest in PFCI at a later date. In connection with the consummation
of the foregoing transaction, Saad J. Nadhir resigned as Co-Chairman and
President of the Company to become the Chairman and Chief Executive Officer of
PFCI. Scott A. Beck, Chairman and Chief Executive Officer of the Company,
assumed the additional responsibilities of President of the Company. A copy of
the Company's press release, dated January 31, 1997, related to the above-
described events is attached hereto as Exhibit 99.1.
Item 7. Financial Statements and Exhibits.
(c) The following exhibit is filed as part of this report on Form 8-K:
99.1 Press Release of Boston Chicken, Inc. dated January 31, 1997
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: February 5, 1997
BOSTON CHICKEN, INC.
By: /s/ Mark A. Link
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Mark A. Link
Vice President-Financial Reporting
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BOSTON CHICKEN, INC.
EXHIBIT INDEX
Exhibit Number* Description
99.1 Press Release of Boston Chicken, Inc. dated January 31, 1997
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* Exhibits not listed are inapplicable.
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EXHIBIT 99.1
NEWS
[LOGO OF BOSTON MARKET Home Style Meals]
Media Contact: Karen Rugen
303-216-5076
Analyst Contact: Melissa Marsden
303-216-5652
BOSTON CHICKEN, HARRY'S FARMERS MARKET JOIN FORCES
TO CREATE MEAL SOLUTIONS COMPANY
Golden, Colo., January 31, 1997 -- Boston Chicken, Inc. (Nasdaq: BOST) has
invested in a new company that will partner with Harry's Farmers Market, Inc.
(Nasdaq: HARY) to capitalize on emerging trends in the food buying habits of
today's consumers. The focus of the new venture will be branded take-home meal
solutions, including ready-to-heat prepared foods.
The new company, called Progressive Food Concepts, Inc. (PFCI), will explore,
with BCI, taking a line of Boston Market(R) prepared foods into alternate
distribution channels, potentially in partnership with supermarkets. BCI has
hired a leading consulting firm with extensive expertise in the retail grocery
business to help BCI and PFCI explore these new opportunities. In addition, PFCI
will make a substantial investment in Harry's Farmers Market, Inc. (Harry's) and
evaluate expansion by PFCI of Harry's retail formats outside of Georgia and
Alabama.
Harry's owns and operates five stores in the Atlanta area, including three
Harry's Farmers Markets, mega markets specializing in high quality fresh fruits
and vegetables; meats and seafood; fresh-bakery goods; freshly-made ready-to-
heat and ready-to-eat prepared foods; and deli, cheese and dairy products, and
two Harry's In A Hurry stores which are smaller than the mega markets, with more
emphasis on fresh, ready-to-heat and ready-to-eat prepared foods of high
quality. Harry's line of over 300 prepared food products and meals are made in
the company's 28,000 square foot USDA-approved manufacturing facility, while
over 200 proprietary bakery items are baked fresh daily in Harry's 55,000 square
foot bakery.
PFCI has been funded with a $17 million loan from BCI and equity from management
and private investors. BCI has the option to convert the loan into a majority
interest in PFCI at a later date. Boston Market's area developers are also
expected to have a significant financial stake in the new venture. Saad Nadhir
will lead PFCI as chairman and CEO, working closely with Harry Blazer, chairman
and CEO of Harry's, who will also serve on the Board of Directors of PFCI.
Scott Beck, chairman and CEO of Boston Chicken, Inc., said, "As the Boston
Market brand has achieved national awareness through nearly 1,100 stores across
the U.S., we believe it is now time to leverage the brand through complementary
opportunities outside the ready-to-eat segment. Branded, ready-to-heat products
and
-more-
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Boston Chicken, Inc., page 2
innovative approaches to selling fresh produce, meats and seafood appear to be
sizable additional segments. The significant potential of this new opportunity,
the unique positioning of the Boston Market brand, and the proven ability of the
BCI infrastructure to facilitate new ventures combine to make this a very
exciting development."
Beck added, "I am delighted that Saad has agreed to head up PFCI. During the
past nine months, Saad has focused exclusively on major strategic initiatives.
The fruits of his efforts are reflected in the recent formation of Boston Market
International and creation of this new venture. In order to most effectively
develop these two opportunities, it is appropriate he resign his positions as
co-chairman and president of BCI. His resignation is also consistent with our
past practice of not having CEO's of entities to which we have loans also serve
as members of BCI's board." Beck, chairman and CEO of BCI, will assume the title
of president of BCI.
Nadhir said, "I believe prepared foods can be a significant compliment to Boston
Market's ready-to-eat business both domestically and worldwide. We're fortunate
to have Harry Blazer, an entrepreneur with 20 years of fresh food retailing
experience, as a partner. Harry's quality standards and personal commitment to
these standards are unsurpassed in the food retailing industry. Harry has
pioneered innovative approaches in both the ready-to-heat and perishable food
segments, combining proprietary production processes with leading-edge retail
formats. This new venture provides an excellent opportunity to combine Harry's
know-how with the experience we have gained and the brands we have built at
Boston Market."
The agreements between PFCI and Harry's include a $20 million investment from
PFCI in the form of a loan to Harry's that can be exchanged for up to 5 million
shares of Harry's Class A common stock, warrants to purchase 2 million shares of
Harry's Class A common stock and a mutual consulting agreement between Harry's
and PFCI. In addition, PFCI acquired Harry's worldwide intellectual property and
trademark rights, including all rights to the Harry's Farmers Market and Harry's
In A Hurry retail concepts. Harry's will retain development and trademark rights
to both concepts in Georgia and Alabama and will receive a 2 1/2 percent equity
interest in PFCI. There are no ongoing royalties or fees associated with the
transfer of these rights. Assuming full exercise of the rights to acquire
Harry's stock, PFCI could own approximately 43% of Harry's.
Harry's, under the leadership of Harry Blazer, will continue to own and operate
all of its current stores as well as any future Harry's stores opened in Georgia
and Alabama.
Boston Chicken, Inc. franchises and operates Boston Market food service stores
that specialize in fresh, convenient meals featuring homestyle entrees, fresh
vegetables, salads and side dishes, including mashed potatoes made from scratch.
Boston Market combines the freshness and quality of traditional home cooking
with convenience and value. As of December 29, 1996, there were 1,087 Boston
Market stores in 38 states and the District of Columbia.
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