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  "docSlug": "4688728b59a1",
  "documentTitle": "Buffalo Wild Wings (BWLD)",
  "authorId": "07_Marcato",
  "authorName": "Mick McGuire",
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  "sourceTypeSlug": "activist_investor",
  "sourceTypeLabel": "Activist investor",
  "presentationDate": "2017-04-20 00:00:00",
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  "pageNumber": 38,
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  "notes": "The slide uses a waterfall bridge to reconcile management's reported return with the actual economic return after accounting for G&A, Capex, lost royalties, and taxes.",
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      "kind": "callout",
      "text": "While management has asserted that the favorable wage laws under which the acquired units operate offers a tailwind to their return calculation, the lower labor expenses cannot possibly be sufficient to offset the negative impacts of the factors listed above",
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      "text": "Waterfall chart showing the bridge from 17.9% cash-on-cash return to 6.6% economic return.",
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      "text": "BWLD has never explicitly discussed the financial impacts of their significant franchisee acquisitions executed in 2015, other than to claim that these deals met their return criteria. We believe that the following factors must be considered when evaluating the economic returns from this acquisition: Incremental G&A to support acquired restaurants; Incremental maintenance capex requirements associated with periodic remodels; Elimination of the franchise royalty stream that BWLD had previously earned; Taxes.",
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      "text": "Economic Return: 6.6%",
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      "kind": "source-note",
      "text": "Source: Company filings, Marcato analysis. Analysis assumes acquired stores operated at 2015 franchise system AUVs and \"4-wall\" margins of 18.6%, in-line with BWLD's FY 2015 company-operated average. Incremental G&A assumes $150k/yr. for a regional manager overseeing 7 stores.",
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      "kind": "title",
      "text": "2015 FRANCHISEE ACQUISITIONS HAVE NOT EARNED A RETURN ABOVE BWLD'S COST OF CAPITAL",
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      "evidence": "The document provides a solution: REITERATING MARCATO'S MULTI-LEVEL PLAN TO CREATE VALUE FOR BWLD SHAREHOLDERS",
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