Parsad Posted August 17, 2009 Share Posted August 17, 2009 Yes, that very well could be the process and reasoning. I'm sure we'll find out over time. Cheers! Link to comment Share on other sites More sharing options...
TorontoRaptorsFan Posted August 17, 2009 Share Posted August 17, 2009 Honestly, I see nothing wrong with Sardar's new pay. Based on his actions with turning around SNS I think he deserves every penny. He's not paying himself an obscene amount of money. I think it's reasonable considering how large the size of SNS and WEST are. You get what you pay for and I think he's worth it. Link to comment Share on other sites More sharing options...
OracleofCarolina Posted August 17, 2009 Author Share Posted August 17, 2009 I say he folds the lion fund in shortly after the merger! Link to comment Share on other sites More sharing options...
Packer16 Posted August 18, 2009 Share Posted August 18, 2009 It was great meeting and fun to get to meet some fellow board members (David and Ragner). These are my additional observations from the WEST meeting: Restaurants have unfavorable cost structures. This can lead you into a trap of getting cheap on the product and nickle and diming the customer. This is what happened at SNS. When Sadar took over he focused on the customer experience (i.e. making better food and including music in the restaurants). This lead to lower GMs and higher cost per unit. In addition, SNS reduced the price per unit and was able to make a profit by increased volume. SNS does not hedge commodities risk. Initially it was a challenge to get franchisees on board due to brand re-positioning (lower prices and changing menu). Sadar did say that the SNS brand was stronger than he expected when he first entered the picture. Going forward, SNS will apply a value investing philosophy to capital allocation. In the past, SNS opened restaurants with bad economics for growth. SNS is in the real estate business with the co-owned stores. SNS could own real estate for future franchisees. SNS will in the future do opportunistic lease salebacks but not as a part of general strategy. As to the SA real estate, Sadar was very optimistic about the land. He felt that 9.5 +/- 0.5 acres of the land could be developed. They may be able to save $500k by not having to build a bridge to develop. He would like to expand Woodgrill but the concept is expensive. Going forward, Sadar prefers controlling stake to minority stakes. Someday he will buy an insurer. Hope to see many of you at the next meeting, if there is one for WEST or maybe SNS. Packer Link to comment Share on other sites More sharing options...
ragnarisapirate Posted August 18, 2009 Share Posted August 18, 2009 Ragnar, was that you in the grey suit on the left hand side of the Nasdaq video? Cheers! Nope, I am on the far left side of the pictures; awkward look, buzz cut, blue shirt, and orange tie. Here are my notes [sorry that they are a day late :(]: http://ragnarisapirate.blogspot.com/2009/08/western-sizzlin-2009-annual-meeting.html Link to comment Share on other sites More sharing options...
link01 Posted August 18, 2009 Share Posted August 18, 2009 nice job, ragnar. this part has me puzzled tho: <<In regards to future investments, it was noted that 'there are a number of small companies that we could take over, though, due to ownership we are uninterested, since we would want to allocate their free cash flows.'>> if sns takes over a co why would they be uninterested due to ownership, since they 'would want to allocate their free cash flows.'? maybe making a non controlling investment in a co (vs taking one over outright) with a certain kind of ownership would make them uninterested for those reasons? Link to comment Share on other sites More sharing options...
ragnarisapirate Posted August 18, 2009 Share Posted August 18, 2009 nice job, ragnar. this part has me puzzled tho: <<In regards to future investments, it was noted that 'there are a number of small companies that we could take over, though, due to ownership we are uninterested, since we would want to allocate their free cash flows.'>> if sns takes over a co why would they be uninterested due to ownership, since they 'would want to allocate their free cash flows.'? maybe making a non controlling investment in a co (vs taking one over outright) with a certain kind of ownership would make them uninterested for those reasons? That is in reference to a bunch of family controlled companies that are run in a sub par manner or are not very shareholder friendly... examples coming to mind are SYMS, DEWY, and DCU. Link to comment Share on other sites More sharing options...
Parsad Posted August 18, 2009 Share Posted August 18, 2009 Great notes Ragnar! Thanks very much. Cheers! Link to comment Share on other sites More sharing options...
Munger_Disciple Posted August 18, 2009 Share Posted August 18, 2009 Excellent notes, Ragnar. Link to comment Share on other sites More sharing options...
link01 Posted August 18, 2009 Share Posted August 18, 2009 That is in reference to a bunch of family controlled companies that are run in a sub par manner or are not very shareholder friendly... examples coming to mind are SYMS, DEWY, and DCU. yes, but isnt that only a problem for non control investments? you mentioned co's they might take over. you also mentioned capex going forward of about 5 mil per qtr. some of the other guys mentioned 5 mil annually, which seems too light. but again, more than one attendee posting notes said 5 mil annual capex. Link to comment Share on other sites More sharing options...
ragnarisapirate Posted August 18, 2009 Share Posted August 18, 2009 That is in reference to a bunch of family controlled companies that are run in a sub par manner or are not very shareholder friendly... examples coming to mind are SYMS, DEWY, and DCU. yes, but isnt that only a problem for non control investments? you mentioned co's they might take over. you also mentioned capex going forward of about 5 mil per qtr. some of the other guys mentioned 5 mil annually, which seems too light. but again, more than one attendee posting notes said 5 mil annual capex. In regard to the 5m/quarter comment, I am glad that you brought that up... I mis typed it and just fixed it on the blog and emailed seeking alpha to fix it... cap ex for the year was on the high end of 5 million, and may rise a little in the future. My bad on the typo. in regard to the control issues, if a family controls more than 50% of the stock, and is unwilling to sell it, then there is no real control of FCF. They were answering that in response to a question over the reduced prices of small companies being very attractive. They said that they would need good partners or outright control. They specifically mentioned families controlling stocks as a way that they may not be able to control things. I don't know if that clarified it or not, but I hope it did. Link to comment Share on other sites More sharing options...
thekiefs Posted August 19, 2009 Share Posted August 19, 2009 Q: Wood Grill joint venture? S: Looking to expand...this is a long term strategy that has growth potential P: Great concept...5mil/year sales, but takes an excellent operator Q: Express venture? S: Because the express venture was on the interstate and the miles driven in US has declined, did not do well (missed some reasoning on this) Far more potential in Wood Grill concept. many thx, zach. i was particularly curious why the wood grill buffet concept wasnt growing faster given the excellent results shown by 50-50 joint venture in harrison, va & the 2 newer CA ones. it would appear the concept is even more dependent on finding excellent operators than the other brands. must be due to the complexities involved with large buffets in general, & their typically large, varied menus? Thats what I think Sardar and Phil were alluding to. We'll see what happens this year and if they can pull off any more success stores to show it's NOT only due to a perfect geocentric/managerial/pricing combination. If they can (especially with a sub par manager) I think it's safe to say its a big winner. Awesome notes Ragnar. Link to comment Share on other sites More sharing options...
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