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Peter Feigenbaum
Talent Leader & Director, Other Professionals
Peter Feigenbaum has more than 30 years of experience in retail performance improvement, turnaround, and restructuring services across a wide variety of companies and industries.
Sugi Hadiwijaya
Partner, Partners
Sugi Hadiwijaya has more than 15 years of combined experience in financial services and turnaround management, assisting companies with tasks such as cash management, securing of financing, business plan assessment, M&A activities, and financial modeling in multiple industries.
Alex Pettee
Manager, Other Professionals
Alex Pettee is a finance professional with experience in asset-based lending.
William Snyder
Partner, Partners
With executive and entrepreneurial experience spanning close to 40 years, William Snyder has restructured, managed, and guided a multitude of companies in a wide variety of industries.
- Developed operational and administrative control model
- Build a business-plan sensitivity model
- Identified cash needs to satisfy lender covenants
The company was a $120MM quick service franchise operation that breached its covenant due to declining sales and hired CR3 Partners to assess its business plan. CR3 developed a business-plan sensitivity model, built a comprehensive cohort four-wall analysis, created a quadradic segmentation analysis, developed 13-week cash flow projection, and examined the company’s process and administrative support structure. The company accepted and implemented many of the recommendations CR3 provided based on the analyses and projections.
The Situation
- $120MM quick service franchise operation with 100 units primarily in the Midwest that was formed from both acquisitions and organic growth
- Company breached its fixed-charge coverage ratio covenant due to weaker-than-expected quarterly sales, in addition to administrative covenants such as documentation of real-estate leases and franchise agreements
The Work
- Company hired CR3 to assess business plan, develop sensitivity analyses related to covenant ratios, evaluate liquidity management, and provide recommendations related to the administrative covenant breach
- Developed business-plan sensitivity model to stress-test covenant scenarios under various growth model and COVID recovery projections
- Built comprehensive cohort four-wall analysis, including benchmarking based on financial profile under Franchise Disclosure Document, geography/market, vintage (i.e., age of portfolio acquisition)
- Created quadratic segmentation analysis based on AUV and four-wall EBITDAR to identify profit-improvement opportunities
- Reviewed deferred capital expenditures and assessed company’s maintenance practice segregated by PM (Preventative Maintenance) and RM (Repair Maintenance)
- Developed 13-week cash flow projection and analyzed company’s cash management practices, which CR3 found lacked the discipline typically required to manage through covenant breach
- Examined process and administrative support structure, particularly related to matters in administrative covenant breach, and that there was not sufficient support for real-estate function, which resulted in administrative covenant breach
The Results
- Provided recommendations to address its findings and proposed covenant-ratio ranges to enable company’s return to covenant compliance
- Company accepted and implemented majority of CR3’s recommendations
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