News

Amid release of dreary Q1 results, Famous Dave's adds former RBI exec to board

May 16, 2017

Famous Dave's announced this week a relatively dismal first quarter and has added former RBI executive, Eric Hirschhorn to its board. 

A news release said that Hirschhorn — most recently the president of RBI's Burger King Canada — joined the governing body Monday. Before he served in the RBI role, Hirschhorn was general counsel at 3G Capital, where he was key counsel in RBI's acquisition of Burger King.

"I am delighted to welcome Eric to the board of directors," Famous Dave's Board Chairman Chuck Mooty said in a news release. "His deep industry experience will be instrumental in assisting the rest of the board and management team in revitalizing this wonderful brand."

Q1 financials will likely be among the first order of business for the incoming board member. The results reflect the brand's struggle in an increasingly competitive QSRmarket. They include: 

• Franchise-operated comparable restaurant sales decreased 4.8 percent.
• Company-owned comparable restaurant sales decreased 3.3 percent.
• Restaurant-level operating margin increased to 2.8 percent from Q1 2016's 2.1 percent. 
• Closed two owned and one franchised locations during this quarter. 

Total revenue for the quarter dropped 6.4 percent from the same period last year to $22.0 million, driven primarily driven by a comparable sales decline of 3.3 percent and the net closure of two restaurants. Franchise royalty and fee revenue declined as the result of a 4.8 percent drop in comparable sales, net closure of three franchise-operated restaurants, and the prior year's franchise fee revenues associated with the signing of two area development agreements in the first quarter of 2016. Restaurant-level operating margin for company-owned restaurants was 2.8 percent, an increase from 2.1 percent in the first quarter of 2016. 

"I am proud of the progress we are making in returning our brand to a position of strength," said Famous Dave's CEO Mike Lister. "The company's refranchising initiative will allow us to focus tirelessly on supporting our franchisees by improving guest acquisition and experience through marketing, food and beverage innovation, training and development."

Earlier this month, the brand announced it would accelerate the refranchising and optimization of its 33 company-owned restaurants over the next 12 -to-24 months. In a news release, the company said this initiative permits the company to focus on growth and viability of its franchise system,