Reporter's Notebook
Famous Dave's gets an interesting new director

Famous Dave's gets an interesting new director

This post is part of the Reporter’s Notebook blog.

Famous Dave’s of America, Inc., just got a little less activist.

The Minneapolis-based chain this week named Anand Gala to the chain’s board of directors, giving the board a member who is not otherwise a representative from one of several activist investment funds with an interest in the concept.

But what makes Gala truly unique is that he’s a franchisee. Gala is the CEO of Gala Corp., a large operator of Famous Dave’s locations out of California.

That the company would place a franchisee of the brand on its board of directors is extraordinarily rare. Some chains will, from time to time, hire franchisees as CEOs — such as Boston-based bakery/café chain Cosi Inc.

A few years ago, Burger King hired a franchisee, Steve Wiborg, as its North American president as it worked to sooth relations with operators, which had at the time been difficult.

But few large franchisors place franchisees on their board of directors.

“The addition of Anand Gala brings valuable franchisee representation to our board,” Joseph Jacobs, co-founder of Wexford Capital and chairman of Famous Dave’s, said in a statement. “We are excited to welcome Anand to the board and look forward to the insight he will provide a franchise organization like Famous Dave’s.”

Joseph was recently named the company’s chairman in a major shakeup to the board following the resignation of CEO Ed Rensi — who left the board along with two others. Jacobs and Richard Shapiro, a partner at Wexford, were named company directors.

After that shakeup, all five members of Famous Dave’s board represented an activist fund, until the Gala announcement.

Gala was unavailable for comment on Tuesday. But his placement gives the chain’s franchisees a big voice in its future. Operators own 134 of the chain’s 184 restaurants. The company appears likely to increase that number, too, as refranchising initiatives typically follow activist investor moves at restaurant companies.

But franchisees have also been outperforming their corporate counterparts. In the company’s first quarter, for instance, franchisees’ same-store sales decreased 0.1 percent. By comparison, corporate store same-store sales fell 4.9 percent.

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