Buffalo Wild Wings Kicks Off Refranchising Process
A major refranchising effort is underway at Buffalo Wild Wings.
The Golden Valley-based restaurant chain has hired The Cypress Group, an investment banking firm out of Denver, to broker the sale of 83 corporate-owned locations.
Buffalo Wild Wings did not detail which restaurants specifically would be for sale. Instead, it said the locations fell within five regions: Canada, central and eastern Pennsylvania, Northeast U.S., south Texas, and Washington D.C.
Mick McGuire, an activist investor with 6 percent stake in the company who earned a seat on its board earlier this month, began campaigning for Buffalo Wild Wings to shift its focus away corporate-owned stores—which make up about half of its restaurants.
Rather, McGuire felt the chain would do better by downsizing the number of locations it owned by 90 percent—from roughly 630 now to around 60. By doing so, he argued Buffalo Wild Wings would drastically cut its costs and expenses and subsequently raise its stock value.
Before McGuire’s appointment to the board, Buffalo Wild Wings regularly expressed doubt over his claims and at one point fired back at McGuire, stating his “analysis is based on a lack of understanding of our business and unrealistic assumptions.”
McGuire’s entry into the upper management of the company came on the same day that Sally Smith, the long-time CEO of the chain, announced she would retire later this year.
While Buffalo Wild Wings pursues the sale of 83 of its corporate-owned locations, there would still be hundreds more restaurants it would need to sell to meet McGuire’s refranchising goal. The company has yet to reveal a plan to sell off any additional locations.