Boston Chicken Signs License Agreement with H.J. Heinz to Manufacture, Market Boston Market Branded Grocery Products
(Would Heinz associate themselves with BOSTQ unless they had assurances the chicken would be coming out of bankruptcy? - biff)
GOLDEN, Colo., April 23 /PRNewswire/ -- Boston Chicken, Inc. (OTC Bulletin Board: BOSTQ) announced today that it has signed an agreement with the H.J. Heinz Company (NYSE: HNZ) to license its Boston Market(R) trademarks to Heinz for the worldwide manufacture and sale of packaged grocery food products to the retail trade. The agreement is subject to approval of the U.S. Bankruptcy Court, District of Arizona, where Boston Chicken filed its voluntary petition for Chapter 11 bankruptcy protection on October 5, 1998.
(Photo: newscom.com )
Under the agreement, Heinz will pay Boston Chicken an undisclosed royalty fee based on sales. The agreement is separate and independent of Boston Chicken's restaurant business.
Heinz said that its consumer research showed that the Boston Market brand has broad consumer appeal and would be welcomed by retail shoppers seeking convenient, premium, homestyle foods. Heinz expects to test the concept in retail stores later this year. Specific products and locations for the test were not disclosed.
Boston Chicken said today it filed a motion seeking approval of the agreement by the bankruptcy court. It said it expects the court to hear the motion at its scheduled May 25, 1999 hearing date.
Boston Chicken called the transaction very beneficial, saying that management believes the agreement provides both present and future important benefits to the Boston Market brand and to the company. The company said it anticipates the national exposure provided by Heinz's placement of Boston Market-branded food products in grocery stores will have a positive impact on Boston Chicken's business operations. The company said the second major benefit of the licensing agreement is the enhancement of corporate revenues as a result of the license fees it will be paid. While this revenue impact will not be overall significant in the calendar year 1999, management anticipates that the longer term effect will be important to the corporate revenue stream.
"Having a company as well respected and recognized as H.J. Heinz to manufacture and market food products under our trademarks further supports the significant potential of Boston Chicken and the Boston Market brand," said J. Michael Jenkins, chairman, president and ceo of Boston Chicken. "The advertising and promotion of Boston Market-branded products in retail outlets should enhance the popularity of our restaurants while the popularity of our food and our restaurants should enhance Boston Market retail sales.
"We're very enthusiastic about this great opportunity for Boston Chicken, Boston Market, our customers and our employees," Jenkins said. "We believe this agreement strengthens the long-term value of our brand."
Boston Chicken is currently working through its restructuring. Boston Chicken, Inc. operates and franchises restaurants under the Boston Market brand name that specialize in fresh, convenient meals, featuring homestyle entrees, fresh vegetables, sandwiches, salads and side dishes. There are 866 Boston Market restaurants in 33 states and the District of Columbia. Information on Boston Chicken and Boston Market is available at www.boston-market.com.
With sales approaching $10 billion, H.J. Heinz Company is one of the world's leading food processors and purveyors of nutritional services. Its 50 affiliates operate in some 200 countries, offering more than 5,000 varieties. Among the company's famous brands are Heinz, StarKist, Ore-Ida, 9-Lives, Weight Watchers, Wattie's, Plasmon, Farley's, The Budget Gourmet, Rosetto, Bagel Bites, John West, Petit Navire, Ken-L Ration, Kibbles 'n Bits, Pup-Peroni, Nature's Recipe, Orlando, Olivine and Pudliszki. Information on Heniz is available at www.heinz.com. |
