Finally, Board Diversity at Famous Dave’s
About two weeks ago, Famous Dave’s franchisee Anand Gala offered us his thoughts about the company’s board of directors. At the time, he felt a lack of diversity was the source of the problems — poor sales, tumbling EBITDA, lack of innovation — hampering the 184-unit chain. We included some of those remarks in our story about Famous Dave’s in the July Restaurant Finance Monitor.
Because Gala (surprisingly) became a Famous Dave’s board member this week, we thought it pertinent to share more of our interview with him. We believe it sheds light on the influence Gala, who franchises 11 of the barbecue restaurants in California, is likely to have on current activist board members.
Gala, for example, reminded us that activists at the time had no restaurant experience at any level. “The challenge the board had,” he explained, “was that [Ed] Rensi was the only one with real restaurant experience. And so when he is a board member and he is also the leadership of organization, he’s the only one holding himself accountable. No one else understood the fundamental details of how this business works.”
Rensi, a former McDonald’s CEO, was appointed to the board in late 2013 and a few months later became Famous Dave’s CEO. He has since resigned from both positions during a board shakeup this month that replaced the activist investors with new activist investors.
We also asked Gala what advice he might offer a new CEO for boosting sales. “It is very, very simple. It’s the basics. It’s delivering value. It doesn't mean promotional gimmicks or discount coupons. It means delivery something worth paying for,” he said.
Throughout, Gala praised activist board members for their intelligence but reiterated his concern that none had been involved in the restaurant business per se. “Even [former board member] Patrick Walsh, who has been involved with other restaurant concepts and understands the space — even he doesn't understand the details of the business. There continues to be a struggle with the lack of diversity and lack of experience with the industry — too many financiers,” Gala opined.
Now, perhaps, no longer.