The most interesting thing about the planned IPO of the Bojangles’ restaurant chain is the fact that it exhibits many strategic advantages. First, it has a big presence in the Southern United States. Second, it has an established track record. It’s not a new restaurant chain. In fact, it has 622 stores, and it’s still growing.
Also, it generates cash. This company has a reported revenue of $430 million in 2014, which produced a net income of $26.12 million. Not too shabby in the big scheme of things. Moreover, comparable store sales which is the crucial metric of success in the restaurant industry grows by a healthy 4.6%.
Put all these factors together and it looks like Bojangles’ should be a solid buy. I really like the fact that it already has an established base from which it can scale up its operations.
Another reason why investors might want to pay attention to the Bojangles’ planned IPO is that in recent quarters, there have been a lot of successful restaurant IPOs. I am of course talking about Habit Restaurants, Shake Shack, Noodles, and Potbelly. Bojangles’ might be a great niche play in the restaurant space.
Of course, you still need to pay attention to the company’s fundamentals. You need to look at its sector, how fast the sector is growing, how aggressive it is in scaling up its operations as well as adding value to its current menu items. The good news is chances are high this stock would perform better than the way McDonald’s has been performing recently.
