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John Gordon

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  • Biglari Holdings, Inc: Sardar Biglari - Bet The Jockey Part VII [View article]
    Dana: CEO workship cults don't have a very long time working in this space....in a service business, it is the staff that delivers the value, not the CEO.

    Moving on...seems like you are saying that because of the CBRL consolidation accounting, the $BH holdings have a "more reasonable valuation", even though they have no control of those earnings except via dividends or stockownership rights.

    I'd recommend you keep the earnings metrics clean and simple, and not muddy the waters.

    John A. Gordon
    Pacific Management Consulting Group
    http://bit.ly/m8ad9
    chain restaurant analysis and advisory
    Mar 18 12:47 PM | 2 Likes Like |Link to Comment
  • Dunkin' Donuts: Are All The Analysts In Florida? [View article]
    Stephen: interesting point, but the JPM sell side analyst that hosted the DNKN love fest IS actually based in Florida, Miami actually !

    Otherwise, the fairly strong same store sales numbers that a weaker competitor, Krispy Kreme (KKD) and the positive US same store sales results released by Starbucks (SBUX) and Tim Horton's (THI) does seem, to support the case that lower average ticket 'beverage' concepts seem to be "hot", if there is average ticket upside via food attachment and new product new news.

    John A. Gordon
    Pacific Management Consulting Group
    chain restaurant analysis and advisory
    http://bit.ly/m8ad9
    Mar 17 11:11 PM | Likes Like |Link to Comment
  • Chipotle Mexican Grill: The High Multiples Are Justified [View article]
    Alex: a few points:

    (1) CMG is NOT getting a 70% return on each restaurant. The data table you included excludes CAPEX and G&A which brings down enterprise returns lower. Not your fault, but retail and restaurant companies make that same per store display error endlessly. Investors have to know that.
    (2) No forward lineal extrapolation model can possibly be accurate. In the restro space, market conditions, incomes, restaurant development and tastes and preferences change greatly. In my long restaurant analytical career, these lineal models never work out.
    (3) The 1.61 elasticity is a bit high, never seen it that high. Maybe 1.15.
    (4) When viewed over history, restaurant lifecycles are finite. Management capability to prolong the lifecycle can't be knowable at this point.

    John A. Gordon
    Pacific Management Consulting Group
    chain restaurant analysis and advisory
    http://bit.ly/m8ad9


    Mar 17 11:00 PM | 3 Likes Like |Link to Comment
  • Why I Will Swap These 2 Franchises [View article]
    Points understood, but $MCD operational peers are really only $BKW, $WEN and and $YUM.
    Feb 12 11:30 AM | 1 Like Like |Link to Comment
  • Should Denny's Adopt Marcato Capital's Plan For DineEquity? [View article]
    I'm certainly dividend friendly, but ultimately the leverage ratio must relate to the long term fundamentals of the free cash flow going forward. Will the debt markets accept 5-5.5X for Denny's?

    It is a mistake to assume that restaurant franchisor model free cash flow continues forever. The most important factor in that is franchisee cash flow and ability to gain credit. Does Denny's need to do anything to support franchisee future growth that could come out of free casdh flow? A: Yes....a dedicated loan pool for franchisee store reimages and remodels.


    John A. Gordon, CFFA
    Pacific Management Consulting Group
    restaurant analysis and advisory
    http://bit.ly/m8ad9
    Jan 28 11:14 AM | 1 Like Like |Link to Comment
  • Revisiting Darden Restaurants: A Look Inside Its Lousy Quarter [View article]
    In the last earnings call, DRI signaled that it will be looking at its dividend level. It has to. It has a cash squeeze underway right now: profit declines, increasing CAPEX and debt service for new acquisitions. Let's watch this.

    John A Gordon CFFA
    http://bit.ly/m8ad9
    Jan 14 08:09 AM | Likes Like |Link to Comment
  • McDonald's Has A Cultural Clash And May Soon Get Help In Solving It [View article]
    Interesting observations, but the beverage business and the breakfast/lunch/dinner business are inseparable. MCD has a same store sales problem and no doubt operations issues, but standalone McCafe's with no other products are economically and from a customer retail proposition unworkable.


    John A. Gordon, CFFA
    chain restaurant analysi and advisory
    http://bit.ly/m8ad9
    Jan 10 10:23 PM | 1 Like Like |Link to Comment
  • Wendy's Continues To Execute Well [View article]
    I hope for the best for WEN. It has potential. But its operational execution couldn't have improved that quickly. Fundamentals improvements means same store sales gains, margin improvement, robust new product new news, new unit development, improving ROIC and company and franchisees together. That is not the case right now with WEN.

    Article should have addressed same store sales trends, the forecast EBITDA trend movement and how WEN will come up with big CAPEX funds for itself and franchisees to remodel to its future vision.

    John A. Gordon
    Pacific Management Consulting Group
    restaurant analysis and advisory
    http://bit.ly/m8ad9
    Dec 26 12:56 PM | Likes Like |Link to Comment
  • Prepare To Short AFC Enterprises [View article]
    While I understand author's logic, the business fundamentals say something else entirely: the business is getting stronger. RONA has trended better since 2009 since their plan is working.

    AFCE is one of the few restaurant standouts where many metrics are moving the right way. See my seekingalpha.com articles.


    John A. Gordon
    Pacific Management Consulting Group
    chain restaurant analysis and advisory
    http://bit.ly/m8ad9
    http://bit.ly/Voq3vr
    Dec 7 12:43 PM | Likes Like |Link to Comment
  • A Long-Term Value Case For Wendy's, Part III [View article]
    Very comprehensive review. While SOTP is interesting narrative, the real fundamental catalysts for WEN are (IMHO):

    (1) getting the WEN quality value promise reinforced in the consumers mind.
    (2) remodeling stores and store experience platforms, both company owned and franchised. The franchise economics will be the most difficult because of the CAPEX required.
    (3) getting breakfast to work.
    (4) more new product new news.
    (5) the then resulting same store sales, restaurant margins, expanded and viable franchising.
    (6) consolidating its position before weaker competitors do so.

    John A. Gordon
    Pacific Management Consulting Group
    restaurant analysis and advisory
    http://bit.ly/m8ad9
    Oct 26 03:01 PM | 3 Likes Like |Link to Comment
  • Analyzing Companies Is A Complex Affair: Don't Use EBITDA [View article]
    Excellent article. Financial analysis becomes flawed when all relevant revenues and costs aren't considered. Overreliance on EBITDA causes distortions.
    Oct 19 04:32 PM | 1 Like Like |Link to Comment
  • McDonald's: Are Analysts' Q3 Estimates Too Optimistic? [View article]
    Very nice displays. However, I would recommend you examine the MCD real estate/brand component and G&A as well to pin down MCD more precisely.

    John A. Gordon
    restaurant analysis and advisory
    Pacific Management Consulting Group
    http://bit.ly/m8ad9
    Oct 18 09:09 AM | Likes Like |Link to Comment
  • Domino's Pizza Beats Earnings, Buy To Profit From International Growth [View article]
    Writer: understood, but $DPZ does not have low debt. While its a franchise model, its LT debt to EBITDA is app. 5X.
    Oct 17 09:59 PM | Likes Like |Link to Comment
  • Sonic Management Discusses Q4 2012 Results - Earnings Call Transcript [View article]
    Seems to me Sonic has trouble relaying even good news, over the years, this quarter included. Whats the point in not breaking out sales comps exactly?

    Disappointing that not one question or discussion on franchisee store level economics, for a chain that is 90% franchised.

    130 bpts leverage on labor costs pretty large, wonder what is really getting cut.

    Lots of initiatives underway and company stores discussion but what about franchisees? Will they/can they use the service tool and enhance POS tools? Larry Miller's Qs on franchisee comps shortfall vs. company stores and zees use of service tools most telling.
    Oct 17 05:56 PM | Likes Like |Link to Comment
  • Follow Einhorn In The Chipotle Short? [View article]
    In terms of his fundamental analysis, writer very clearly isn't familiar with the restaurant space and what drives sales and customer traffic long term. He way overemphasizes price, and has the relevant customer motivations mispegged.


    John A. Gordon
    Pacific Management Consulting Group
    chain restaurant analysis and advisory
    http://bit.ly/m8ad9
    Oct 12 10:50 AM | 1 Like Like |Link to Comment
COMMENTS STATS
167 Comments
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