Home
Experience
Client Stories
industry
Real Estate, Hospitality & Construction

Liquidity management and performance improvement for a casual restaurant chain​

Key metrics:
  • Successfully refinanced debt​
  • Secured replacement lender​​
Value levers pulled:
  • 13-Week cash flow Forecasting​
  • SG&A rationalization​
  • Budgeting & forecasting process improvement​
  • Refinancing support

Picture this...

You’re a New England restaurant chain business owned and operated by four family members, a father and 3 sons. After developing a successful small box takeout concept, you decide to expand by developing a larger footprint concept offering of sit-down dining with a full bar. This concept creates challenges almost immediately; without a meaningful change in the menu, it was difficult to generate the volume to offset the increased lease costs and associated overhead model. Additionally, build-out cost overruns squeeze liquidity and put pressure on vendors.​ Further, annualized spend on principal salaries and other lifestyle expenses adds additional pressure to your reduced EBITDA generation. Given the liquidity challenges, you quickly find yourself in default with the secured lender. ​

You turn to Accordion.

You enter into a forbearance agreement with the secured lender, with a stipulation to engage a turnaround consultant to develop a strategy to return to profitability and repayment of obligations. We partner with your team to assess key issues and develop strategic plans to improve performance. We execute a turnaround plan centered around: ​

  • Reducing salaries and other family costs by ~20%.​
  • Selling the two worst-performing locations to generate positive contributions across the portfolio.​
  • Developing weekly cash flow projections and reporting mechanisms to allow the principals to better manage the business and liquidity.​
  • Creating a stronger dialogue among principals to improve performance.​
  • Drafting performance enhancement initiatives.​
  • Developing a multi-year monthly business plan model.​

Your value is enhanced.

Together, our work makes the secured lender comfortable to continue to lend to the business on an interim basis. After the reductions in corporate overhead, sale of the underperforming locations, and greater visibility into your business’ financials, a replacement lender becomes interested in taking over the debt and you are successfully re-financed.​

Enhanced value:

You reap multiple benefits, including:

  • ​​​Successfully refinanced debt​
  • Secured replacement lender