Carrols Pushes Performance at Stores that Doubled Firm's Size
Carrols Restaurant Group is turning up the heat to make its 278 newly acquired Burger King restaurants perform as well as its existing stores, said Dan Accordino, CEO of the Syracuse, New York-based firm.
That means two areas of focus: improving operations to boost sales, and instilling “p&l discipline” primarily in the form of food controls. Because an independent cooperative does all the buying for their restaurants, food costs are the same from store to store. What you do with the food—how efficiently it’s used and how little is wasted—makes all the difference, he said.
Carrols doubled its size and became the largest Burger King franchisee when it purchased those stores in May, for $16 million cash plus a 28.9 percent stake in Carrols stock. Accordino told me this week he sought the deal because he didn’t want the company to become “just an overgrown franchisee.” Rather, he and CFO Paul Flanders sought a strategic partnership with Burger King.
They gained the right of first refusal to buy stores from existing operators in 20 states as a key part of the deal. “No franchisee of which we’re aware has gotten the right of first refusal. Our stated objective is to grow to a thousand restaurants, and that’s possible with this right,” he said.
Flanders said the market is rewarding the publicly held Carrols for the transaction, although it’s difficult to compare stock prices because Carrols spun off a group of two other restaurant brands at the same time it acquired the Burger Kings. “We’re up 40 percent, even from May,” Flanders said. “It’s better than we anticipated.” Carrols shares are going for $6.15 each this week.