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Advisory firm endorses Buffalo Wild Wings shareholder

Nation's Restaurant News - Thu, 2017-05-25 15:03

A proxy advisory firm has recommended that Buffalo Wild Wings Inc. shareholders vote for a trio of board nominees recommended by an activist investor, potentially paving the way for major changes at the board and at the company.

Institutional Shareholder Services has recommended that the Minneapolis-based company’s shareholders vote for former Pizza Hut CEO Scott Bergren as well as Mick McGuire, managing partner of activist investor Marcato Capital Management.

ISS also recommended that shareholders put Sam Rovit, CEO of food maker CTI Foods, who both Marcato and Buffalo Wild Wings endorsed. And the service recommended former McDonald’s Corp. executive Janice Fields get a seat.

Rovit, Bergren and McGuire will give Marcato “a sufficient voice to continue to push for appropriate changes at the company,” ISS said.

Marcato “has presented a compelling case that additional change is warranted at this time,” ISS said in its report.

Buffalo Wild Wings stock rose 8 percent on Wednesday.

“We are pleased that ISS recognizes further change on Buffalo Wild Wings’ board is needed and greater shareholder oversight will help increase accountability and avoid any delays in the implementation of strategic projects,” McGuire said in a statement.

ISS’s recommendations would further a general overhaul of Buffalo Wild Wings’ board, and would remove two of three directors who have been on the board for more than a year.

“If shareholders follow ISS' recommendation, there will be only one independent director on the Buffalo Wild Wings Board that has served for longer than eight months,” the company said on Wednesday. “We are surprised that ISS did not even consider the fact that its recommendation would essentially empty the boardroom of all independent institutional knowledge.”

ISS the best known among proxy advisory firms, who make recommendations to shareholders over corporate governance issues. Many institutional investors rely on these recommendations, and so they can have a big impact on the results of board elections such as the proxy fight between Buffalo Wild Wings and Marcato.

Marcato recommended four people to the Buffalo Wild Wings board. One of those four includes one of the chain’s former executives, Lee Sanders, whose nomination has been subject to a particularly forceful challenge from the company.

Buffalo Wild Wings has argued Sanders has exaggerated his role at the company. And earlier this week, the company said Sanders has been sending emails and texts to the chain’s franchisees as recently as February, offering to buy their restaurants.

The proxy vote could have major implications for Buffalo Wild Wings’ future and its direction. Marcato has called for the resignation of the chain’s longtime CEO, Sally Smith.

It also believes that the company should rapidly refranchise the vast majority of its more than 600 company locations, and that sales of those locations would take two years or less. Buffalo Wild Wings has argued such a strategy is too aggressive. The company plans to refranchise 80 locations, or 13 percent of its 634 company locations.

Fast refranchising deals are not uncommon, especially these days. But ISS did warn in its report that such quick changes are rare in casual dining, with only Applebee’s having done so that quickly.

“It appears unwise [for Buffalo Wild Wings] to fully commit to such a specific level of franchising at this point,” the report said.

Mostly, however, the proxy fight has been over the company’s performance under current management, with Marcato arguing that the company has lost its way over the past two years. ISS agreed with Marcato that the company has underperformed other restaurants, in terms of returns to shareholders.

ISS argued that Buffalo Wild Wings aggressively increased costs in 2015 as it faced commodity pressure, which hurt traffic in the long run. It then says the company bought restaurants in 2016 to sustain topline growth. That hurt profit margins and the company’s returns on its investments.

ISS also argued that many of Buffalo Wild Wings’ recent decisions “have been driven by [Marcato’s] engagement with the company,” the report said.

Contact Jonathan Maze at jonathan.maze@penton.com

Follow him on Twitter: @jonathanmaze

Off-lease vehicles could send U.S. sales tumbling, analyst warns

AutoNews - Thu, 2017-05-25 15:00
An incoming "tsunami" of off-lease vehicles could send annual U.S. new-vehicle sales tumbling as low as 13 million by 2021, according to one Wall Street analyst.
Categories: Latest News

May U.S. auto sales projected to rise -- slightly

AutoNews - Thu, 2017-05-25 12:49
U.S. new-vehicle sales are expected to rise very slightly in May from a year ago, narrowly snapping the industry's streak of four consecutive monthly declines.
Categories: Latest News

Stunted Growth

Hotel Interactive - Thu, 2017-05-25 12:26
STR: U.S. Lodging Industry Momentum Slows As Pricing Power Proves Elusive

Kaye's Kitchen makes an impressive double double

Topix - Thu, 2017-05-25 11:13

Last week I wrote about the best burgers in Orange County, a list that skewed toward fancy gourmet burgers because, well, those are usually the best. Predictably, a few readers wrote to call me an elitist and complain that they are too poor to eat burgers like that.

Categories: Today's Food News

Chevy extends marketing deal with Detroit Red Wings at new arena

AutoNews - Thu, 2017-05-25 11:06
Chevrolet extended its sponsorship contract with the NHL's Detroit Red Wings, becoming the official vehicle of Detroit's new Little Caesars Arena.
Categories: Latest News

4 ways to use tech to optimize labor costs

FastCasual.com - Thu, 2017-05-25 08:07
Monitoring labor costs is more crucial than ever, but back-office systems can automate and help lower labor costs.

Hilton Opens The First Ever Tru By Hilton And Reaches 5,000 Hotel Milestone

Hotel Interactive - Thu, 2017-05-25 07:21
OKLAHOMA CITY, OK––Hilton (NYSE: HLT) today celebrated the grand opening of the first-ever Tru by Hilton – the company’s 5,000th hotel ...

Cambria Hotels Opens Its Second Chicago Property In The Loop-Theatre Ditrict

Hotel Interactive - Thu, 2017-05-25 07:14
ROCKVILLE, MD--Choice Hotels International, Inc. (NYSE: CHH), one of the world's largest hotel companies, in partnership with developer Murphy Asset Management ...

Dueling Fast-Food: Chick-Fil-A & Popeyes Race To Open First In Norwalk

Topix - Thu, 2017-05-25 06:31

Connecticut Avenue in Norwalk will soon be home to not one but two fast-food chicken restaurants. And both are new on the restaurant scene in the city.

Categories: Today's Food News

Marshall Hotels & Resorts Opens 162-Room Grand River Hotel In Grand Rapids, MI

Hotel Interactive - Thu, 2017-05-25 05:27
SALISBURY, MD—Marshall Hotels & Resorts, a leading hotel management and services company that operates properties nationwide, today announced that the company ...

MyWay Mobile Storage is Pleased be a Part of the REALTORS®...

PR Web - Thu, 2017-05-25 03:30

MyWay Mobile Storage is pleased be a part of the REALTORS® Association of Metropolitan Pittsburgh’s (RAMP) Curb Appeal Day project.

(PRWeb May 16, 2017)

Read the full story at http://www.prweb.com/releases/mywaystorage/pittsburgh-RAMPCurbAppeal/prweb14340568.htm

Brian Lang Appointed Director of Sales and Marketing at Hyatt Hotels...

PR Web - Thu, 2017-05-25 03:30

Brian Lang has been appointed Director of Sales and Marketing for the Grand Hyatt Denver and Hyatt Regency Denver at Colorado Convention Center, two award-winning downtown Denver hotels.

(PRWeb May 16, 2017)

Read the full story at http://www.prweb.com/releases/2017/05/prweb14324202.htm

Axis Purchasing Announces Expansive Hospitality Supply Programs for...

PR Web - Thu, 2017-05-25 03:30

Axis Purchasing, a leader in group purchasing services for schools, multi-unit restaurants, hotels, and other foodservice providers, announced an expansion of their services to save money on facility...

(PRWeb May 16, 2017)

Read the full story at http://www.prweb.com/releases/2017/05/prweb14325193.htm

Uber-fast food delivery with new app launching TODAY

Topix - Thu, 2017-05-25 02:04

From 11am, UberEATS will be providing super-fast food delivery to hungry customers in the city at the touch of a button. The app will allow Southampton's army of Uber users to order anything from burgers to brownies or curries to cakes in just a couple of clicks.

Categories: Today's Food News

Alabama's Robert Trent Jones Golf Trail changes with the times

Topix - Wed, 2017-05-24 21:45

My first buddies trip to Alabama's Robert Trent Jones Golf Trail was in early 2001. I'd spent plenty of time in Alabama prior to that.

Categories: Today's Food News

Red Robin outlines strategy amid casual-dining tumult

Nation's Restaurant News - Wed, 2017-05-24 20:43

Red Robin Gourmet Burgers Inc. is overhauling its operations, redefining service, adding off-premise alternatives and reconsidering mall locations as it faces a challenging casual-dining market, executives said Tuesday.

At the Greenwood Village, Colo.-based company’s first investor day in more than three years, Red Robin executives said many of its restaurants share the traffic declines in big-box retail and entertainment, as more consumers shop online and get entertainment streamed into their homes.

“I'm here to tell you casual dining peaked, and it's not coming back,” Denny Marie Post, Red Robin’s CEO, told analysts. “It is not going to be the reigning concept ever again to the extent that it was. It had its moment.

“It had its moment when we were all discovering big-box stores and going out to movie theaters and doing lots of stuff, of which casual dining was part of that occasion,” Post said. “We were never a destination, or a very few were. We were part of something else.”

Red Robin executives said they are reconsidering where they locate restaurants and are also testing off-premise channels like catering and delivery.

Alexander Slagle, an analyst with Jefferies LLC, said Red Robin is showing “early signs of improvement.”

In a note to investors, Slagle said the company’s “efforts to improve ops in the restaurants, build awareness in high-penetration markets using incremental local media and drive frequency via renewed focus on everyday value seem to be moving the needle.”

Slagle also noted that the company was keeping it unit growth modest, with emphasis on markets it had already penetrated, “allowing it to better leverage its scale and awareness in those regions.”

Les Lehner, Red Robin’s chief development and procurement officer, said the brand halted mall development in 2015. He said about 17 percent of Red Robins locations are in malls, and they tend to lag other units in revenue.

“Everybody is aware that malls are struggling right now and face a very difficult path,” he said.

Post pointed out, however, that some mall locations do especially well, including Red Robin’s highest volume restaurant, with $6 million annually, at the Northgate Mall in Seattle. 

“We're either seeking an exit strategy, because we don't believe that the redevelopment plans and programs that the landlords had in place are going to work, or we're trying to find some creative ways to create incremental revenue streams out of these models,” Lehner said.

Jonathan Muhtar, the head of Red Robin’s marketing and off-premise programs, said the company hopes to tap its 6.6 million loyalty program members with more focused messaging and to look at delivery and carryout, which survey indicate would increase frequency among half the brand’s guests.

The company is looking at various delivery possibilities, as well as introducing this summer a new “Burger Bar” packaging for large orders.

“This has really developed with an eye toward catering as well, where we have the ability to provide many different toppings and ingredients, keep those fresh and display [them] in a way that's appealing to our guests, while also protecting the hot product,” he said. 

Post said Red Robin is also looking at other service models. While only about 8 percent of sales are in alcoholic beverages, she said the brand would look at possibilities such as self-service “beer walls.”

“There's a point at which we might turn that into an experience where the guest can help themselves, and not make it a takeaway but in fact that guest will probably step back and appreciated the chance of sample variety and if you seen those kind of beer walls that really very, very effective,” she said.

Carin Stutz, Red Robin’s chief operating officer, said the brand is testing six new service models in various locations, adding that two seemed to provide the “frictionless and hassle-free service” that would work in the future.

For the first quarter, Red Robin said its income declined 18.7 percent, to $11.6 million, or 89 cents per share, from $14.2 million, or $1.03 per share, the previous year. Revenue increased 4.1 percent, to $418.6 million, from $402.1 million the previous year. 

Red Robin said same-store sales fell 1.2 percent in the first quarter ended April 16. That reflected a 1.7-percent decline in traffic and a 0.5-percent increase in average check, the company said.

As of April 16, Red Robin had 556 restaurants, including 469 company-owned locations and 87 franchised units.

Contact Ron Ruggless at Ronald.Ruggless@penton.com

Follow him on Twitter: @RonRuggless