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A HIGH-STAKES GAME OF CHICKEN PAUL SNYDER'S FRANCHISE TO BATTLE BOSTON CHICKEN

The hottest battle in the war for your dining-out dollar is about to spread to Buffalo.

Kenny Rogers Roasters, the Fort Lauderdale, Fla.-based rotisserie-style chicken chain founded by ex-Kentucky Fried Chicken king John Y. Brown, is betting Western New York is ready for its entrees, with seven local locations on the drawing board.

And while Brown prepares his fowls, the current darling of Wall Street and the chicken-on-a-spit crowd, Boston Chicken, is plotting its own Niagara Frontier attack, setting up a version of Chicken Wars never before seen here.

Brown and Buffalo businessman Paul Snyder Sr. have signed an agreement to develop and manage at least 100 Kenny Rogers Roasters restaurants in New York State, Pennsylvania and the Virgin Islands.

"We will have seven locations in the Buffalo area which will employ 400," Snyder said. "Two new restaurants will open April 1 (one in this area), but we also are acquiring 11 existing restaurants in Pennsylvania and New York State which will be retrofitted and opened as soon possible."

Snyder's Olympic Management Systems, which manages the Hyatt Regency Buffalo, the Olympia Health Club in downtown's Olympic Towers office building and the Beaver Hollow Training and Conference Center in Java, will serve as managing partner in the multipartner group that bought the Roasters territory.

"Paul has one of our largest territories," Brown said from Roasters Central in Fort Lauderdale. "He's aggressive, he has the resources and the management."

Snyder and Brown have known each other for more than two decades. The friendship began when they fought a bidding war against each other for the services of Providence University basketball guard Ernie DiGregorio. At the time Brown owned the American Basketball Association's Kentucky Colonels and Snyder owned the National Basketball Association's Buffalo Braves.

Snyder won that fight but eventually sold half the Braves franchise to Brown, with the team moving to San Diego in 1978.

The two stayed in touch, and when Brown was ready to push the Roasters franchise in a big way, he called the Buffalo businessman.

Snyder and certainly Brown think they smell a winner in Roasters. The chain was founded four years ago by Brown, the former Kentucky governor and long-time driving force behind Kentucky Fried Chicken, and his country music superstar friend Kenny Rogers.

The company has opened 109 stores to date in 25 states and Canada, plans to open 200 more this year and already has franchised 1,400 locations worldwide, including a joint venture in Asia and the Mideast. A Malaysian group owns 11.3 percent of the company.

Roasters is one of a number of restaurants looking to cash in on the appeal of non-fried broilers revolving on a spit. The non-fried market is pegged at $2 billion per year, with the bulk of the business snagged by rotisserie purveyors.

Rotisserie process removes fat

Rotisserie chickens are marinated in a special mixture, then grilled for 90 minutes or longer. The process melts out fat, leaves the meat moist and gives the skin the eternal golden tan made famous in television commercials for Thanksgiving turkeys.

Rotisserized pullet pushers also claim the product is more healthful than fried competitors. Roasters claims its fare has 43 percent less fat, 51 percent less sodium, 29 percent fewer calories and 35 percent more protein than fried chicken.

"Chicken has the patina of being healthy -- and rotisserie? It just tastes good," said Allan Hickok, a restaurant industry analyst in Minneapolis with Piper Jaffray Inc.

Hickok and Roger Lipton of Ladenburg, Thalmann & Co. pointed out that chicken is one of the few foods that "travels well," meaning you can take it home and eat it with little trouble.

"Chicken is a relatively inexpensive source of protein and you can put a lot of food on a plate for not a lot of money," said Lipton, managing director for New York City-based Ladenburg specializing in restaurant industry analysis.

Boston Chicken is leader

While Kenny roasts, Boston Chicken is on fire.

From the outside, the Naperville, Ill.-based company appears to have all the ingredients for success:

Key executives schooled in the restaurant/food service industry, including such well known firms as Bennigan's, Kraft General Foods, Burger King and Red Lobster.

Top management, which in the mid-1980s made a substantial investment in Blockbuster Video and helped make it a household name.

Money. The company's stock, traded on the Nasdaq exchange, initially hit the market last November at $20 per share and closed Friday at $46.63. The stock has touched $51.

More money. The company on Jan. 7 filed papers with the Securities and Exchange Commission to sell $100 million worth of convertible bonds to help pay for expansion.

Almost daily, Boston Chicken makes news: Within a seven-day stretch earlier this month, the company said it was acquiring for conversion 84 Philadelphia-area Roy Rogers restaurants for $22.3 million, followed by the announcement that a deal was signed with Carl Karcher Enterprises Inc., the king of California fast food, to open up as many as 300 Boston Chicken stores in the Golden State within five years.

For the year ended Dec. 26, Boston Chicken had net income of $1.65 million or 13 cents per share, compared to a net loss in fiscal 1992 of $5.85 million or 41 cents. Systemwide sales jumped to $154 million from $42.7 million.

With 228 stores in 19 states now open (including 24 in New York state), Boston Chicken projects 450 locations open by the end of the year, with 200 stores to open in 1995.

At 3,200 square feet, the stores are roughly the same size as Kenny Rogers Roasters', seat 50 to 70 and average about $950,000 per store in yearly sales.

"If Boston Chicken says it will have 450 stores open by the end of '94, they'll do it," said Piper Jaffray's Hickok. "They have high-quality management, the infrastructure and the dough."

Locally, the Boston Chicken franchise is held by Pittsburgh-based P&L Food Services Inc., which has advertised for a regional operations manager, but refuses to say how many Boston Chickens will open here. Boston Chicken commercials already are playing on local television.

Why the push to rotisserie chicken? Harry Balzer, vice president of the Chicago marketing research firm NPD Group, said there's no problem getting people used to buying rotating birds.

"You're asking people to eat something that they've been eating, and it has the perception of being healthy," Balzer said.

Balzer predicted that the main course will be a major battleground among competing restaurants, but says it is important to keep an eye on the side dishes, too. Hot and cold side dishes, prepared fresh daily, are marketed by the chains.

Roasters' Brown has been working on the rotisserie concept since 1985. He says that slow-cooking chickens over an open fire is nothing new -- it's de rigueur in places like the Mideast and Asia.

Here in Buffalo, Snyder is prepared to build new units or convert existing restaurant facilities.

"We will do whatever is appropriate, new construction or retrofits," Snyder said. "All leases signed thus far are for new construction." Olympic Management will develop and operate the restaurants.

Each Roasters will seat approximately 100, centered around a wood fire in a huge fireplace visible from the street.

Each store will be filled with memorabilia from Rogers and his country music friends, including music videos from such well-known performers as Willie Nelson and Dolly Parton.

Brown estimates each Kenny Rogers Roasters location annually does more than $1 million in business, with a Las Vegas location topping $3.3 million.

While it's too early to designate winners and losers in the Chicken Wars, Brown's use of a crackling fireplace to broil birds gets the nod from NPD's Balzer.

"Kenny Rogers Roasters is in a better position than most rotisserie chicken restaurants to succeed," Balzer said. "Anyone can do rotisserie, but the woodburning fireplace sets it apart."

There are other competitors

The two new players are shouldering their way into an already crowded field. Some smaller chains, including Miami-based Pollo Tropical, are gearing up for growth. In Buffalo, the Canadian-based Swiss Chalet chain is a long-time favorite, with four area locations.

And no one is forgetting KFC, which spent $100 million last year to introduce its Rotisserie Gold.

The chain made famous by white-suited Colonel Harlan Sanders claims its sales have risen 25 percent due to the non-fried pullet entrees. KFC has 10 stores in the Buffalo area.

"KFC is the sleeping giant in this rotisserie battle," NPD Group's Balzer said. "It's certainly the largest player (5,000 domestic units alone) and in battle, big usually wins."

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