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Doug Pendergast

Doug Pendergast set out in 2012 to revive the 80-year-old Krystal brand by adding 150 small restaurants, improving quality and introducing new menu items.

But just over two years later, the Harvard graduate has been forced to beat an abrupt retreat as Krystal's growth sputtered and new initiatives fizzled.

Effective today, Pendergast's CEO shoes will be filled by Harsha Agadi, currently the nonexecutive chairman of Krystal's board, who will fill in as interim CEO while the firm searches for Pendergast's replacement.

Pendergast's exit isn't the only turnover at the top. The company previously replaced its chief marketing officer in July, tapping Jason Abelkop for the job, replacing a consultant who had been acting in the position following the removal of the previous marketing director.

The first year of Pendergast's tenure at Krystal was most notable for the company's move to Atlanta from Chattanooga, where Krystal began in 1932 as one of the nation's first fast-food restaurant chains.

The headquarters move for Krystal was completed in spring 2013 after the new CEO cited the need to be close to Atlanta's airport to fuel long-term store growth.

The plan was to add 150 new stores to the chain's existing 350 units. But numbers supplied by the company show that the number of restaurants fell by 10 from 2012 to 2014.

Pendergast also launched the Krystal Stacker, essentially two Krystal burgers stacked on top of one another. But that product didn't sell as well as expected, said Bret Thorn, senior food editor for Nation's Restaurant News.

"They realized after they introduced it that you could just call it a double-sized Krystal," Thorn said. "It was a slip-up not to capitalize on their brand identity."

Under Pendergast, the company also slashed the size of stores to save money, shrinking restaurants by 600 square feet to 1,700 square feet. While this saved money, it didn't result in the growth that the company had expected.

Pendergast came to Krystal after serving as chief development officer for the Chattanooga-based Craftworks Restaurants and Breweries Inc. He was in charge of franchising, a specialty he had previously developed at Church's Chicken from 2005 to 2010.

Atlanta-based Argonne Capital Group in 2012 purchased Krystal for about $175 million from the existing management team, which at the time was led by Fred Exum. Exum and other Chattanooga-based managers left shortly after the purchase, along with a number of other top executives.

In an interview shortly after the sale, then-CEO Exum claimed that retaining Krystal's Chattanooga headquarters had been a condition of the sale.

However, the company's new owners were made up of a group of executives and investors who were almost all Atlanta-based, many of whom had worked at Atlanta-based Church's Chicken during its turnaround.

UTC is working with Krystal officials to schedule later this fall an unveiling of the portion of the Krystal memorabilia collection that will be on display in the College of Business, according to Chuck Cantrell, associate vice chancellor for communication and marketing.

Contact staff writer Ellis Smith at 423-757-6315 or with tips and documents.