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  "documentTitle": "Darden Restaurants, Inc. (DRI)",
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  "authorName": "Starboard Value",
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  "presentationDate": "2014-09-11 00:00:00",
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  "notes": "Includes a callout box referencing Brinker as a successful precedent.",
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      "text": "Darden's concepts are well-suited for a franchising program. Industry experts have suggested to us that Olive Garden and LongHorn would be very attractive candidates for potential franchisees, and large, successful franchise operators have expressed serious interest in becoming franchisees. Unfortunately, Darden's management has simply refused to believe that franchisees are capable operators, despite substantial evidence to the contrary – in fact, given Darden's underperformance compared to highly- or partially-franchised peers, it is clear that Darden does not operate their restaurants as efficiently as a franchisee could.",
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      "text": "Several casual dining competitors, including DineEquity, Brinker, and Denny's, have refranchised a large portion of their store base, driving significant improvements in their returns on capital and stock price performance.",
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      "text": "Domestically, LongHorn and SRG have significant growth potential, and could realize this growth faster and with higher returns on capital through franchising.",
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      "text": "Peers have consistently found that franchised restaurants generate higher restaurant-level margins and same-store-sales than company-operated stores. Franchisees bring an ownership mentality to the restaurants. Darden has several markets that are underperforming, and could potentially be better-managed by franchisees with extensive operating experience and superior store density in those markets. The best ideas for menu innovation and operational improvements often come from franchisees.",
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      "text": "The opportunity for international growth without capital investment is substantial. In many international markets, experienced franchise operators or joint venture partners are in a better position to operate a restaurant successfully, given local tastes, regulations, economic conditions, etc.",
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