Casual Dining Restaurant Company

  • Size Range: $50 – 100 million
  • Role: Interim VP, Finance
  • Ownership: Private Equity

Problem

A restaurant company with a national footprint was emerging from chapter 11 bankruptcy following a severe tax issue. The company’s leadership team had been gutted. The private equity firms that had recently assumed ownership were bullish on the company’s prospects but needed experienced turnaround and restructuring leadership to build out an actionable plan.

Solution

David Johnson was retained in the role of Interim VP, Finance to provide transformational leadership in the areas of cash management and strategic planning.

Result

Challenges. Post-restructuring, the company had a healthy balance sheet but no actionable plan. The fundamentals told the story of a good company at the level of individual restaurants, but ineffective leadership, lack of strategic direction, and a paucity of financial reporting had left the company vulnerable to executive paralysis should a crisis ever come. A crisis did eventually come, leadership paralysis did ensue, and the company was only saved through a bankruptcy mediated restructuring.

Visibility. A cash management process was implemented, featuring a rolling 13-week cash flow forecast, an orderly disbursement planning process, and weekly status updates with the company’s private equity owners. Additionally, a revised financial reporting architecture was created and implemented, allowing easy rollup to company-level results or drill-down to restaurant level.

Path. The company’s new private equity owners were understandably eager to see a value creation path laid out at an operational level. This plan was created in concert with the leadership team, owners, and new lenders. There was now an actionable plan for the company to realize its potential, generating a robust return for its private equity owners in the process.

Key Accomplishments

  • Spearheaded the development of an actionable value creation and turnaround strategy in concert with leadership and private equity owners.
  • Oversaw cash management, including rolling 13-week cash forecast, weekly update calls, and all vendor disbursement planning.
  • Drove performance improvement initiatives including a revised location assessment approach, an updated budgeting methodology, etc.

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