Arby's CEO Steps Down, Looks at Becoming Franchisee
ATLANTA – Wendy’s/Arby’s Group, Inc. (NYSE: WEN) announced that Tom Garrett, president and chief executive officer of Arby’s Restaurant Group, Inc., is stepping down. Roland Smith, 55, current president and CEO of holding company Wendy’s/Arby’s Group, will assume the interim role as president of Arby’s, effective immediately. A search is currently under way for a permanent president of Arby’s to lead the turnaround of the company.
Smith stated, "We are beginning discussions with Tom about becoming an Arby’s franchisee and hope that he continues to be involved with the brand.”
Garrett, 48, was appointed president and CEO of Arby’s in September 2008, following the formation of Wendy’s/Arby’s Group. He had been president and chief operating officer of Arby’s.
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Former QSR company insider becoming a franchisee has some natural advantages that a new franchisee might not:
This might be a new development strategy focus, in fact. Natural advantages for this franchisee:
(a) Capital. Former CEO/Presidents typically walk away with severance, stock options, etc that will be useful in personal guarantees and reserve funds.
(b) Precise knowledge of most efficient geographic markets and unit economics.
(c) Relationships with lenders who have worked with the company and franchisees in the past.
(d) Recruiting knowledge. They'll know who within the company might be recruitable, later, as they grow.
(e). Access. This franchisee would get their phone calls to corporate returned.
John A. Gordon Chain Restaurant Earnings and Economics Experts www.pacificmanagementconsultinggroup.com
John,
Informative list. Let me add one more advantage that the CEO has in stepping up from management to owning a business (a franchise).
Alliance building. Franchisees will continue to build on their relationship with the former CEO. He will receive not only considerable operations intelligence from fellow franchisees but he also will have advantages in being able to add to those franchisee loyalties. That can be highly valuable in making informed business decisions and in steering franchisees in a certain way -- something Arby's corporate officers may one day be very, very aware of.
Coming from corporate, franchisor support personnel tend to be on their toes [think IT customer service and accounts] and this particular franchisee becomes more precious with supplier personnel. There typically are no compliance issues as the corporate attitude to compliance lingers.
Dealing with constant left field franchisee and staff performance challenges, executive board demands and loads of differing personalities is largely replaced by dealing with staffing issues and typically friendly customers that are far less demanding. The franchisee here may have to learn more of the detail but he knows and develops the big picture.
All advantages taken into consideration; unless Tom Garrett is in total retirement mode and IF he chooses to become a franchisee you would expect him to be a very successful and influential multi-site franchisee. ‘IF’
This blog raises questions because it is vague in one area. When Tom Garrett stepped down after not much more than 18 months who was happy and why? Consideration of becoming a franchisee suggests everyone may have been happy and Arby’s don’t want to lose his skills but there is no comment from Tom Garrett to indicate either way.
The more things change; the more they stay the same.
short time - bad fit - a previous "owner" of the franchisor had become a franchisee. He was sthe biggest loud mouth pain in the arse in the group.
I hope this guy turns out to be more to the point than this other guy whom I will not soon forget.
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
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