Focus Brands CEO Steve Romaniello Outlines Plans for Moe’s Southwest Grill
New owners expect to refresh the brand, repair franchise relationships and open units in existing markets.
By David Farkas, Senior Editor -- Chain Leader, 8/31/2007
 Focus Brands CEO Steve Romaniello is monitoring credit markets. |
The recent credit crunch made the acquisition “a little more difficult and challenging,” admits Focus Brands CEO Steve Romaniello, who declines to detail the bumps in the road his company has endured since April to purchase 360-unit Moe’s Southwest Grill from Atlanta-based Raving Brands on Aug. 29.
“But we’ve had this deal in the works for quite some time, and the credit issues are a more recent thing,” he adds in an interview from company headquarters in Atlanta.
Terms of the transaction, which also involved Focus Brands affiliate Atlanta-based Roark Capital, were not disclosed.
Leadership Issue
One bump may have been the failure of Raving Brands President and COO Steve LaMastra to join Focus to head up the Moe’s operation. LaMastra, who suggested the deal to Focus last year, was expected to sign on as Moe’s president, Chain Leader reported in July. “Steve is a terrific person and a really good leader,” Roark Managing Partner and Founder Neal Aronson told the magazine.
“He is still running Raving Brands,” offers Romaniello. “They still have a number of brands to manage.”
LaMastra was unavailable for comment at press time.
Instead Vice President of Franchise Operations and Brand Leader of Moe’s Matt Andrew will leave Raving Brands to continue to oversee day-to-day operations. “He was brand leader yesterday [before the close of the deal], and he is brand leader today,” Romaniello says.
In Need of Repair
Romaniello hints he is open to making amends with disgruntled franchisees, several of whom are suing Raving Brands. They allege their former franchisor misled them about how it collected funds for supply-chain distribution.
“I chose not to talk to them during the due diligence period. But now they are our franchisees, and I feel we have a relationship. I will be engaging every franchisee,” Romaniello says.
Franchisees have also complained about a lack of marketing support. Says Romaniello: “One immediate goal is to refresh the brand.”
He promises Focus will “conduct exhaustive brand research, learning the intricacies of this brand, its people and personality.”
Market Growth
Focus will also shore up existing markets by adding stores, though Romaniello can’t say how many units franchisees will open. “We will know more after completing our strategic growth plan. We are getting started on that,” he explains, adding Moe’s will not be entering new markets in the foreseeable future.
Romaniello is aware that the tightening credit market may also affect franchisees who must finance new units with bank loans. “We are not seeing it happen yet,” he says, “but it is something we are watching very carefully. It would be a surprise if things didn’t slow down a bit.”
The company store count--which now stands at one--will swell by one or two units “in the near future,” he adds. Company stores will likely serve as regional training centers. “[The stores] allow us to take a leadership role,” Romaniello says.
Nonetheless he doesn’t expect to launch any initiatives without advice from franchisees. “I want to get together with them,” he declares. “There are quite a lot things to improve.”
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