published Thursday, April 5th, 2012

Shake-up brings franchise veteran to Krystal

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The burgers will remain the same, but the old management is out at The Krystal Co. after the chain's acquisition last month by Atlanta-based Argonne Capital for about $175 million.

Krystal announced Wednesday that Doug Pendergast, former chief development officer for Chattanooga-based Craftworks Restaurants & Breweries Inc., will replace Fred Exum, who worked at the company for 15 years following its last takeover in 1997.

Pendergast's new mission is, "in a word, growth," he said.

"Fred and his team have really done a great job of stabilizing the business through difficult times and left the brand with some very exciting growth potential," Pendergast said. "This is not a revolution, this is simply an evolution of the brand."

As part of Krystal's planned growth, the 360-unit chain will increase its focus on franchising new restaurants, something that Pendergast is familiar with from his days at franchise-heavy Craftworks.

"We're looking to expand the number of restaurants -- first through company-owned expansion -- then we'd like our franchisees to come along with us," he said. "I think it's important for the company to put capital to work, to build restaurants, and then once we've proven the success of that investment I fully expect franchisees to participate in the expansion of the brand."

Pendergast's franchise expertise also stems, in part, from his time as executive vice president and chief franchise officer at Church's Chicken, during which time that chain grew by 250 units through five years.

But it's not all about expansion, he said.

"The other piece of it is improving the performance and guest experience in the existing restaurants," he said.

He's targeting spotless restaurants, courteous service and efficiency. That's something that seems "relatively straightforward, but the challenge is to execute it every day at every restaurant and with every guest," he said.

Pendergast will be joined in the executive boardroom by former Church's Chicken executives Al Ryan, Krystal's new vice president of operations; and Partha Mukherjee, chief information officer.

Ryan managed 450 restaurants as vice president of international operations at Church's, while Mukherjee formerly served as the chicken chain's chief information officer.

Harsha Agadi, a nonexecutive chairman of Krystal's new board known as a restaurant turnaround specialist, called the new executives "a team that will lead Krystal along the steep growth trajectory established in recent months."

"Our brand and our customers have a great future ahead," said Agadi, whose former roles include helping both Church's Chicken and Friendly's Ice Cream Corp.

Pendergast put any layoff fears to rest at the company's headquarters, saying that there was "nothing like that planned," and that his only job was to grow the brand.

Though fast-food consumers can expect to see more Krystal restaurants coming their way soon, don't expect the chain to venture too far out of the Southeast, he said.

"You won't see us open a Krystal in Seattle, Washington anytime soon," he said.

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about Ellis Smith...

Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...

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