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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": "Uses two waterfall charts to demonstrate the net cash flow impact of refranchising on low-volume vs high-volume stores.",
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      "text": "Refranchising can generate capital and improve the quality of earnings with a limited reduction in cash flow",
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      "text": "Volatile and capital intensive restaurant income is exchanged for more stable royalty income plus cash.\nSince royalty income is generally valued at a higher multiple, even with no improvement in operating performance refranchising can create value.\nWhile refranchising well-performing stores generally reduces consolidated EBITDA, the net change in cash flow is often limited, especially for lower volume stores.",
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      "text": "While it is obvious that refranchising poorly performing stores will create value by improving cash flows while also generating immediate proceeds, even refranchising well-performing stores can create value without meaningfully reducing ongoing cash flow.",
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      "text": "1) For illustrative purposes... 2) Assumes a 4.5% royalty rate... 3) Assumes $150k in overhead... 4) Assumes 50% of refranchising proceeds... 5) Reflects $60k in maintenance capex...",
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      "text": "Darden can create value from refranchising even well-performing stores",
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