Proactive Steps a System Can Take Today to Improve Its Value Tomorrow

Transcription

1 Proactive Steps a System Can Take Today to Improve Its Value Tomorrow Moderator: Andrew F. Perrin, Larkin Hoffman Daly & Lindgren Ltd. Speakers: H. Scott Pressly, Roark Capital Group Philip Friedman, McAlister s Corporation Jeffrey E. Kolton, Franchise Market Ventures, LLC

2 This program will focus on specific steps a franchise system can take today to improve its marketability and valuation in the future.

3 How do buyers of franchise systems evaluate and value franchisors? What are potential mistakes franchisors make that could impact the future value and marketability of their business? What are specific steps a franchisor can take to help position the company to maximize future value?

4 How do buyers of franchise systems evaluate and value franchisors? Attractive unit level economics Depth and breadth of management team Proven business model in various markets Predictable and growing earnings Differentiation - sustainable competitive advantage Scale Franchisee satisfaction Strong information systems and controls

5 McAlister s Corporation Purchased By Phil Friedman And Partners In 1999 Recognized Leader In Quick Casual Restaurant Category Featured In Nation s Restaurant News Cover Stories, QSR Magazine And Chain Leader 2005 NASBIC Portfolio Company Of The Year 2006 Nation s Restaurant News Franchise Excellence Award Purchased By Roark Capital Group July 2005

6 McAlister s Deli Quick-casual Restaurant Order At Counter Food Delivered To The Table Servers Refill Beverages At Guest s Table Annualized System Wide Sales $300,000, Locations In 19 States Growing At 25 % Per Year 85% Franchised

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9 An Overview of Our Transaction Success 2005 Sale To Roark Capital Able To Present Strong Track Record Of Growth 30% Top And Bottom Line Growth Since Acquisition New Franchise Success Proven And Understandable Success Model Believable Growth Projections Continuation Of Success Trends Organization Strengths Built In Past Five Years

10 An Overview of Our Transaction Success The 99 Acquisition We Raised Money Based On: Strength Of The Brand In Its Home Market Strong Belief Of Local Investors In The Brand Selling Our Restaurant Leadership Capabilities Ability To Reasonably Project A Dramatic Increase In The Business

11 An Overview of Our Transaction Success Articulating The Components For Continued Growth Leader s Vision Of The Concept s Evolution Strength Of Current And Future Franchise Groups Success Of New Restaurant Openings Value Adding Management Processes Guest Satisfaction Indexing Site Selection Model Distribution Management Systems Quality Assurance Audits Clear Understanding Of The Components Of Success A Solid Understanding Of Future Value Creation...A Strategy For The Business Recognized Leadership Capabilities

12 Why We Liked McAlister s In 1998 We Recognized McAlister s As An Emerging Brand In An Emerging Category Two Value Generators Our Restaurant Industry Experience Told Us Quickcasual Was Going To Happen We Would Be Operating With Growing Trends With 30 Restaurants In Multiple Markets And Franchisees Signing Up We Could Project Long Term Growth The Company Was On The Verge Of Expanding

13 Why We Liked McAlister s Concept Fundamentals And Customer Satisfaction Capable Of Supporting Major Brand Development A Return On Investment Supporting Sustainable Growth Recognized Opportunities To Improve The Growth Model Plus: Franchise Development Was A Growth Accelerator

14 Value Creation For McAlister s Recognizing That We Had Bought A Young, Emerging Chain With Great Potential, We Began To Build The Foundation For Success The Infrastructure To Sustain Growth Refinements To The Growth Model Established Financial Sources For Company And Franchise Expansion

15 Building The Infrastructure Needed To Sustain Growth Enhanced Skills And Management Training Added Company Restaurant Supervision Developed Franchise Restaurant Consultant Skills Established Franchise Relationship Management Introduced Marketing And Menu Management

16 Refining The Growth Model Brand Enhancement building, Décor And Trade Dress Sales Growth Planning four Walls Marketing And Product Introduction Profitability Improvement leveraging Size And Growth In Purchasing Production Improvements kitchen Layout And Production Systems Investment Efficiencies reduce Space Requirements Plus Purchasing Leverage Adding Growth Opportunities new Venues Such As On Campus And Malls

17 Financial Sources for Expansion Developed Strong Relationships With Restaurant Industry Leaders Worked With Franchisees To Develop Business Plans And Financial Presentation To Financial Sources Demonstrated Our Willingness And Capability To Support Franchisees

18 Record keeping Basic Legal Steps Registration and Disclosure Agreements (yes, even the Agreements you keep in the drawer) Trademarks Ability to require name changes International protection Internal memos on system problems

19 Basic Legal Steps Non compete provisions General need for flexibility in documents Agreement with shareholders and key employees

20 Proactive Steps a System Can Take Today to Improve Its Value Tomorrow Moderator: Andrew F. Perrin, Larkin Hoffman Daly & Lindgren Ltd. Speakers: H. Scott Pressly, Roark Capital Group Philip Friedman, McAlister s Corporation Jeffrey E. Kolton, Franchise Market Ventures, LLC