{ "docId": "019dd923-622b-71dc-a6db-c76db57564df", "docSlug": "4688728b59a1", "documentTitle": "Buffalo Wild Wings (BWLD)", "authorId": "07_Marcato", "authorName": "Mick McGuire", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2017-04-20 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 45, "pageCount": 50, "prevPage": 44, "nextPage": 46, "slideType": "testimonial", "function": "cite_precedent", "density": "overcrowded", "nDataPoints": 0, "notes": "The slide uses a grid of pull-quotes to build credibility for the activist's thesis by citing third-party financial experts.", "elementsJson": [ "headline_text", "callout_box", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622b-71dc-a6db-c76db57564df/45", "deckHref": "/decks/019dd923-622b-71dc-a6db-c76db57564df", "deckJsonHref": "/decks/019dd923-622b-71dc-a6db-c76db57564df.json", "deckAnchorHref": "/decks/019dd923-622b-71dc-a6db-c76db57564df#slide-45", "components": [ { "bbox": null, "kind": "callout", "text": "RESEARCH ANALYSTS OVERWHELMINGLY AGREE THAT REFRANCHISING ADDS VALUE", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-0391-77f4-a9f0-66cc2aef9f97", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.45, "x": 0.05, "y": 0.12 }, "kind": "quote", "text": "Our analysis of a theoretical model in which 80% of BWLD is franchised along conservative industry standards yields per share valuations significantly higher than BWLD's current share price -Nick Setyan, Wedbush, 2/8/17", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "535671eb-ae45-4e5f-87ce-fbe020d01491", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.45, "x": 0.05, "y": 0.73 }, "kind": "quote", "text": "Our math supports a more favorable range of outcomes for investors in a refranchising strategy[.]...We agree with the spirit of [Marcato's] work -John Zolidis, Buckingham, 9/6/16", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6e75440b-98a9-4332-b581-5b68b203ba24", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.45, "x": 0.52, "y": 0.53 }, "kind": "quote", "text": "We believe investors would applaud the introduction of multi-year refranchising programs from Buffalo Wild Wings -Jeff Farmer, Wells Fargo, 7/13/16", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7beff66b-d5c9-40c0-9156-3ecc0a3f9578", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.45, "x": 0.05, "y": 0.57 }, "kind": "quote", "text": "We view refranchising as a realistic alternative path to value creation for shareholders... -Nick Setyan, Wedbush, 9/12/16", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "889d8845-e69d-407e-8168-ec6acb427743", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.45, "x": 0.52, "y": 0.62 }, "kind": "quote", "text": "'Logic' supports the premise that a franchise model is better insulated against economic volatility... -Jeffrey Bernstein, Barclays, 5/17/16", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9150ee0f-0ee5-4b9b-8af1-00a507453eb4", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.45, "x": 0.05, "y": 0.41 }, "kind": "quote", "text": "We like the potential for additional value-unlocking actions or a more drastic tack in strategy in-line with some of the ideas outlined in a recent 13D filing... -John Zolidis, Buckingham, 9/15/16", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ba6bbae0-7f9a-4d86-b70f-13cf8da65b90", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.45, "x": 0.05, "y": 0.28 }, "kind": "quote", "text": "The math [on a transition to a 90% franchised business model] looks intriguing, even when using what we think are conservative assumptions -David Tarantino, Baird, 10/24/16", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c74baa2e-26a2-4b8a-93cb-f9c70bc7ed45", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.45, "x": 0.52, "y": 0.12 }, "kind": "quote", "text": "[D]irectionally the activist plan is a much better plan than the one the current management team is focused on -Howard Penney, Hedgeye, 8/18/16", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d83518a2-6cb8-49b9-a0af-124aa2d25ead", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.45, "x": 0.52, "y": 0.37 }, "kind": "quote", "text": "[A] falling [ROIC] as a result of higher capex could suggest a greater proportion of units would create more per share value as franchised units... -Karen Holthouse, Goldman Sachs, 8/4/16", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e7ecfb20-5826-419e-9bd6-160952da3e0c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.45, "x": 0.52, "y": 0.21 }, "kind": "quote", "text": "[D]uring its Analyst Day...[Management] failed to address any changes to BWLD's long-term company/franchise store mix... -Paul Westra, Stifel, 8/16/16", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "efd2ed46-6009-4856-b3f4-baf9477123e8", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"Our analysis of a theoretical model in which 80% of BWLD is franchised along conservative industry standards yields per share valuations significantly higher than BWLD's current share price\" — Nick Setyan, Wedbush, 2/8/17; \"[D]irectionally the activist plan is a much better plan than the one the current management team is focused on\" — Howard Penney, Hedgeye, 8/18/16; \"[T]he math [on a transition to a 90% franchised business model] looks intriguing, even when using what we think are conservative assumptions\" — David Tarantino, Baird, 10/24/16; \"[D]uring its Analyst Day...[Management] failed to address any changes to BWLD's long-term company/franchise store mix (now at 52% company-owned, which we believe should be reduced) by defending ongoing consideration of future franchise purchases (where we would hope for a re-franchising strategy)\" — Paul Westra, Stifel, 8/16/16; \"We like the potential for additional value-unlocking actions or a more drastic tack in strategy in-line with some of the ideas outlined in a recent 13D filing...Investors may look past downward revisions if the prospect of transformative action is on the table, but if this is called into doubt, fundamentals suggest a lower price for the stock\" — John Zolidis, Buckingham, 9/15/16; \"[A] falling [ROIC] as a result of higher capex could suggest a greater proportion of units would create more per share value as franchised units (e.g., where the same capex could be deployed for share repurchases)...Investors remain highly focused on the potential opportunity for BWLD to increase its franchise mix\" — Karen Holthouse, Goldman Sachs, 8/4/16; \"We view refranchising as a realistic alternative path to value creation for shareholders...Investors often forget BWLD was >65% franchised a few years ago. Our conversations with brokers that specialize in restaurant and franchisee transactions lead us to believe the appetite for most of BWLD's markets would be strong, and could command multiples towards the higher end of the 5-6x unit-level EBITDA industry standard\"' — Nick Setyan, Wedbush, 9/12/16; \"We believe investors would applaud the introduction of multi-year refranchising programs from Buffalo Wild Wings\" — Jeff Farmer, Wells Fargo, 7/13/16; \"'Logic' supports the premise that a franchise model is better insulated against economic volatility, generating a high margin annuity stream of royalties with limited operating volatility...We expect investors to further encourage (re)franchising / licensing at [BWLD]\" — Jeffrey Bernstein, Barclays, 5/17/16", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-0391-77f4-a9f0-69b3ef797178", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.6, "x": 0.22, "y": 0.95 }, "kind": "source-note", "text": "Source: Wall Street research. Indicates a quote taken from a report published before Marcato publicly disclosed its suggestions to management, indicating an \"unaided\" observation.", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d4da7f36-d527-4124-bc4a-c12adc953a48", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.9, "x": 0.05, "y": 0.05 }, "kind": "title", "text": "RESEARCH ANALYSTS OVERWHELMINGLY AGREE THAT REFRANCHISING ADDS VALUE", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a13d1828-5c4e-4e64-b561-c32ef38ec394", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "authority-citation", "slug": null, "matchId": "103e6916-298a-4bd1-b023-ae1776937e84", "evidence": "Uses quotes from multiple financial analysts to validate the activist's strategy.", "confidence": 0.95 } ], "arcBeats": [ { "to": 49, "from": 7, "beatId": "577f34c3-585b-4a10-ab75-d4a71d62e71e", "arcName": "Problem-Agitate-Solution", "arcSlug": "problem-agitate-solution", "beatName": "Solution", "beatSlug": "problem-agitate-solution-solution-provide-relief", "evidence": "The document provides a solution: REITERATING MARCATO'S MULTI-LEVEL PLAN TO CREATE VALUE FOR BWLD SHAREHOLDERS", "position": 2, "confidence": 0.8, "parentBeatName": "Resolution", "parentBeatSlug": "resolution" } ], "loops": [ { "to": 50, "from": 6, "name": "Cost Of Inaction", "slug": "27-cost-of-inaction", "bestFor": "Urgent budget requests, compliance, risk mitigation", "matchId": "bee45f76-1c20-4bd4-ab97-dc946ed607cf", "evidence": "The document implies that inaction will result in continued underperformance", "position": 0, "objective": "What is the cost of inaction?", "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point", "confidence": 0.7, "description": "Quantify what happens if the audience does nothing" }, { "to": 46, "from": 42, "name": "Constraint Flip", "slug": "25-constraint-flip", "bestFor": "Startup pitches, resource-limited teams, competitive positioning", "matchId": "7b3248be-0fdc-44f5-a98d-ace7f2b65705", "evidence": "The document suggests refranchising as a potential solution", "position": 3, "objective": "Can refranchising be a solution?", "structure": "The Apparent Constraint -> Why It's Actually an Advantage -> The Opportunity It Creates", "confidence": 0.6, "description": "Reframe a limitation as a strategic advantage" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }