• Strategic plan grew sales and EBITDA
  • Negotiated forbearance with lenders

The company was a 300-unit privately held, soup and sandwich chain experiencing declining EBITDA despite stable or higher sales, inconsistent performances from different configurations and expansions, and underperforming relative to company projections. CR3 Partners was retained by the company to assess the business plan and provided tactical and strategic recommendations, including lease negotiations, aligning to company’s family-oriented values, and reconfiguring store format. CR3 negotiated two extensions with its lenders, first during beginning of COVID-19, allowing the company to focus on restarting operations, negotiating leases and executing prime cost initiatives (food and labor).  Second, longer extension, will allow the company to evaluate its strategic footprint and continue cost savings initiatives.

The Situation

  • Privately-held, soup and sandwich chain with 200 company-owned units and 100 franchise units
  • EBITDA has been declining for several consecutive years due to both internal and external factors despite stable or higher sales
  • Company had inconsistent performance from different configurations and expansion to non-core markets
  • Company underperformed relative to projections during an eight-month extension from lender

The Works

  • Retained by company to assess business plan and strategic store footprint review as part of forbearance effort with lenders
  • Performed cohort and correlation analysis, analyzed modeling impact of third-party delivery services, and identified growth sales opportunities within each unit
  • Provided recommendations for tactical, short-term efforts, including lease negotiations and non-core market evaluations
  • Provided additional recommendations for strategic, long-term efforts to improve guest experience, aligning company’s family-oriented value and reconfiguring store format
  • Business plan enables short-term profitability improvement through third-party delivery and store closures
  • Due to COVID-19, assisted with management of short-term liquidity and negotiation of short-term forbearance with lenders

The Result

  • Updated strategic plan resulted in positive same-store sales growth and an increase in store-level EBITDA
  • Negotiated a three-month extension with its lenders, allowing management to focus on restarting operations and engaging in cost-saving measurements
  • Negotiated a second, longer extension with its lenders, providing timeline for evaluating further footprint rationalization.

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