- This post is part of Business Insider’s ongoing series on Better Capitalism.
- Inspire Brands CEO Paul Brown is tasked with turning around the restaurant chain Buffalo Wild Wings, using the same tactics he deployed at Arby’s.
- Brown said that a main reason he’s able to enact major changes is because of patient shareholders, especially because Inspire is private.
- He believes a lack of patience is a reason why we will see fewer large public companies in the quick service/fast casual restaurant industries in the future.
When the private equity firm Roark Capital appointed Paul Brown CEO of Arby’s in 2013, they tasked him with turning around a 50-year-old fast food franchise that was approaching irrelevancy in its market.
Five years later, Roark was so pleased with Brown’s success that they made him CEO of a new holding company, Inspire Brands, which includes Arby’s and is built around the transformation model Brown used there. First up is Buffalo Wild Wings, which Roark acquired for $2.9 billion last November.
Business Insider spoke with Brown about his new role, and he explained that a pillar of his plan for Buffalo Wild Wings, as it was at Arby’s, is working with a patient shareholder base – and that’s made notably easier as a private company.
“We’re not rushed,” Brown said. “I’m not worried about next quarter’s numbers.”
He insisted that he was not saying being public is a bad thing, but rather pointing to the short-termism that is not exclusive to, but is common among, public companies.
And when shareholders are impatient, long-term plans receive less attention, and in turn employees may distrust their leadership. For a brand like Arby’s or Buffalo Wild Wings, this also means creating tension with franchisees.
“If you go too fast in this process, particularly up front, and you don’t bring the employees and the franchisees along, you lose them. Then you start doing things really quickly, and you start doing things and you don’t know where it comes from,” Brown said.
He expects that there will be fewer large public companies in the quick service restaurant (QSR) and fast casual industries because at least at this point, there appear to be more advantages to staying private.
At our “Toward a Better Capitalism” discussion at the World Economic Forum’s annual meeting in Davos, Switzerland, our panelists noted what they deemed a toxic prevalence of short-termism in the markets. “If you’re doing something truly strategic and transformative, it always evokes criticism,” PepsiCo CEO Indra Nooyi said.
Brown told us that if Inspire were to go public at some point, the expectations for patience and trust in long-term planning would already have been established.
To revitalize the Buffalo Wild Wings brand, Brown and his team will have to invest heavily in plants, buildings, and new technology, and he expects the biggest changes to take around two to four years.
“Obviously we want the business to perform,” Brown said. “But we’re not in this for the next couple of quarters, or even the next couple of years. We’re in this for a very long period of time; therefore, we’re not rushing.”