News that Buffalo Wild Wings could be dealt to Roark Capital Group for some $2.3 billion shook up the stock market on Monday afternoon. But what would it mean exactly for the classic chain, not to mention the restaurant industry as a whole?
Jim Badum, executive vice president of client partnerships at Ansira, the second largest independent CRM firm in the U.S., took on the topic.
The first question on everybody's mind will be, essentially, can this deal fix what's wrong with Buffalo Wild Wings? In that, can it help increase traffic and ease some of the food cost burden the brand has been facing?
Going private can give BWLD some time to develop and execute a longer-term plan to address their issues, but it won't happen overnight. A new ownership structure won't immediately benefit food costs as this will take extensive menu development work so they are not impacted so significantly from one item (chicken).
How do you think this could affect Buffalo Wild Wing's refranchising initiative? The company has long held firm to its company-heavy structure, but investors have pushed it in the other direction. Will that actually happen now?
It should help if the new ownership is committed to supporting a franchise system properly by providing necessary infrastructure, training, guidance, and, particularly marketing. One thing that BWLD has missed the mark on is CRM. They are leaving big money on the table by not leveraging consumer data to drive business.
Assuming Buffalo Wild Wings goes private, how will that change the way the chain operates and how it's perceived publicly? What are some of the benefits of operating this way?
Publicly there should be no difference. This is a great opportunity for the brand to retrench and refocus and build a business that will sustain long term, not quarter-to-quarter like other public companies have to do.
If the deal goes through, could it be a sign of things to come for casual dining? Ruby Tuesday already took this path, could other large chains follow?
This looks like a popular path as Panera just did it, as well. The end game is building sustainable value and being public looks so enticing as it brings liquidity to equity. The street can be brutal though and does not reward long-term thinking these days unless you are also hitting your numbers. This should be a good thing for BWLD long term if they can build and execute a well thought out plan.