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Diversified CEO Targets Under-Performers to Acquire


Michael Ansley, CEO of Diversified Restaurant Holdings, just completed a purchase of 18 Buffalo Wild Wings restaurants, in St. Louis, to add to his portfolio of 42. He prefers to control a market when making acquisitions, he told this blogger, and wants to find stores that are under-performing on the top line, the bottom line, or both. We asked him to elaborate:

Q. What’s the attraction of Buffalo Wild Wings?

A. I’ve been a franchisee since 1996. It’s a very powerful brand. We like the fact that it’s a stable management team, I’ve known them a long time. I have faith in where the brand is headed.

Q. What about your latest acquisition, of 18 BWWs from A Sure Wing?

A. I’ve known the franchisee for a long time. The same accounting firm does their numbers and ours, so we had a lot of faith in the numbers. There’s no other Buffalo Wild  Wings franchsiee in that market or any other corporate locations. We can control the market. Plus it’s a good sports town. They get into the St. Louis Cardinals, and then also the Blues, the NHL team. There’s still the Rams there at the moment, and the affinity for the Bears, and the university teams. We knew the director of operations there, so we plan to keep him in place, and we kept the regional managers and the restaurant employees in place. There were some other opportunities there that were sizable.

Q. What’s the No. 1 thing you analyze, when deciding to buy?

A. We really like it if we can get control of an entire market. And these stores, in St. Louis, were under-performing. We were doing $3 million at our stores, and they were doing $2.3 million a unit. We saw opportunities with advertising, incentives, maintenance, capital expenditure issues.

Every deal is different. Some of them have really high revenue but maybe they’re not managing the bottom line so well. Others are managing the bottom line too well, or being short-sighted in investments in people. It’s a little bit of an art.

Q. What’s a red flag, that would cause you to walk away from a deal?

A. The multiples are getting pretty high for all of us. Not just for Buffalo Wild Wings, but the whole restaurant space. A lot of it is the flow of money into the restaurant space. Deals are getting pretty expensive. The other thing is, there are a few operators that are really, really good operators. So not only are you paying a premium but there isn’t much opportunity there. We’re looking for an opportunity to drive revenue or the bottom line or both.

Q. What’s one lesson you’ve learned, to pass on to other owners?

A. A big one that we’ve learned the hard way: location, location, location. So everybody hears that over and over but it’s very true. Also, developing people. Make sure you’ve thought that through, and use the dollars on recruiting, and then training them and keeping them happy, because turnover can kill you in this business. We unfortunately have grown a little too fast in the past. Training was lax, and we suffered the consequences. We’ve really beefed that up over the last two years. But it took us a while, and we found ourselves behind the curve there. Right now given the fact that the economy has heated up, good employees are hard to come by.

Q. What did you do to beef things up?

A. We’ve brought in a new VP of HR and training. We needed more wisdom, knowledge and experience in that position. We hired consultants to do a curriculum for an academy. We bring in people from all the restaurants once a month, it’s a week-long class on culture and leadership. We’ve been working with Disney on helping us with recruiting and recognition. And we’ve brought in other talent on the training side. It’s still not where we want to be.


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The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Laura MichaelsLaura Michaels is editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
Beth EwenBeth Ewen is senior editor of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
Nicholas UptonNicholas Upton is restaurants editor at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at




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