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2011 Golden Chain Awards: Steve Romaniello

2011 Golden Chain Awards: Steve Romaniello

Managing director, Roark Capital Group; chairman, Focus Brands Inc.; chairman, Wingstop Restaurants Inc.

This profile is part of a series on the winners of NRN's 2011 MUFSO awards. The winners will be honored during the Multi-Unit Foodservice Operators Conference, which takes place Sept. 25-27 in Grapevine, Texas. The Operator of the Year will be selected from the Golden Chain honorees during a gala awards banquet at the show. Read more about the awards and profiles of other award winners.

Focus Brands chairman and Roark Capital Group managing director Steve Romaniello is quick to credit others for successes among the 11 foodservice chains held by the company. 

But insiders and outsiders often name him as one of the factors behind the portfolio’s progress.

Discussing how successes were achieved, Romaniello cites the initiative of chain-specific management teams, as well as Roark additives like financial expertise, best practices sharing across brands and the recruitment of seasoned veterans and thought leaders for its boards of directors. His industry associates, co-workers and franchise partners, when addressing that same subject, tend to bring his name into the conversation.

“Steve always does his homework, [and] while he is very metric driven, he is also very strategic, is a good listener, and without question, he has a great eye for identifying talent and unique business opportunities,” Stephen J. Caldeira, chief executive of the International Franchise Association, said of Romaniello, with whom he works on the IFA board.

Kelly Roddy, president of the Schlotzsky’s deli chain, said: “There is a certain magnetism that [Romaniello] has. People want to do well for him.

“He’s a really smart guy and an incredible problem solver,” added Roddy, who was hired by Romaniello in 2007. “You start talking about a situation, and he’ll give you four or five: ‘Have you thought about this? Have you thought about this? Have you thought about this?’ And they are really creative solutions from an out-of-the-box thinker.”

Formerly the president and chief operating officer of hotel franchisor U.S. Franchise Systems, Romaniello in 2002 was named president of the franchise and foodservice division of Carvel Corp., the struggling East Coast ice cream shop franchisor and supermarket ice cream cake manufacturer acquired in late 2001 by newly formed Roark Capital Group. The appointment was a reunion of sorts, as Roark founder Neal K. Aronson had co-founded USFS in 1995.

After Romaniello’s team “stabilized” Carvel, which had shrunk from 865 franchise locations in 1985 to fewer than 450 by 2001, Carvel Corp. was renamed Focus Brands Inc., and he was appointed president and chief executive. The latter two moves were a prelude to acquisitions of Cinnabon and the Hawaii and international operations of Seattle’s Best Coffee in 2004, Schlotzsky’s in 2006 and Moe’s Southwest Grill in 2007.

Romaniello was promoted to managing director at Roark Capital Group in 2008, but retained his ties to Focus Brands through a chairmanship that teamed him with new chief executive Russ Umphenour, whose division acquired Auntie Anne’s in late 2010.

Apart from Focus Brands, Roark also acquired fast-casual McAlister’s Deli in 2005, Wingstop Restaurants Inc. in 2010 and earlier this year purchased from The Wendy’s Co. for $430 million an 81.5-percent stake in 3,644-unit Arby’s. Roark in 2011 also acquired for an undisclosed amount from Bruckmann, Rosser, Sherrill & Co. the 119-unit fast-casual Corner Bakery Cafe chain, 22 full-service Il Fornaio and Canaletto Italian restaurants, and a wholesale bakery operation.

“We’ve been very, very fortunate that we’ve had some great teams doing some great things even through the recession,” said Romaniello, who is also chairman of Wingstop. “Wingstop, for example, has had 7 1/2 straight years of same-store sales increases, and Schlotzsky’s is going to finish this year with its sixth straight year of same-store sales increases — and we have tons of stories like that in our portfolio.”

Roark officials said the company’s foodservice chains had 2010 aggregate worldwide systemwide sales of approximately $5.18 billion from 7,749 venues. The company did not provide comparable numbers for 2009. 

Actual results and estimates included in the 2011 Nation’s Restaurant News Top 100 and Second 100 reports indicated that the company’s operations in the United States in 2010 saw a 2.7-percent decrease in aggregate systemwide sales, to $4.99 billion, compared with 2009, primarily resulting from a 7.58-percent decrease in estimated sales at Arby’s to $2.76 billion. If Arby’s is removed from the equation, the rest of Roark’s foodservice holdings had aggregate estimated 2010 U.S. sales of $2.24 billion, marking an increase of 4.03 percent from 2009, when sales rose 3.14 percent compared with 2008.

In addition to working with restaurant holdings, Romaniello, who is one of seven Roark managing directors, does analysis and due diligence of acquisition candidates as part of the company’s investment committee.

Of his personal management style, he said, “I tend to be an inclusive and collaborative manager, but I’m not afraid to make decisions.” And while the 45-year-old Romaniello appreciates that most people try to work hard, he explained, “I really need the people who are able to not only understand they have to work hard, but that they have to work hard on the things that get results, and get results fast.”

Michael Caveny, director of restaurant portfolio for airport, turnpike and mall feeder HMSHost Corp. of Bethesda, Md., said Romaniello’s organization “has been a good partner with franchisees and a solid steward of the brand.” 

A member of the Cinnabon franchisee advisory board, Caveny said Romaniello’s leadership skills were particularly evident awhile back, when the chain weighed a move it ultimately made to frozen dough after years of making fresh product in the stores. Referring to that proposal, he said some “very tenured” franchisees had a hard time “getting their heads around it.”

“By listening to franchisees’ [concerns] and showing, on the other side, the technologies and innovation that were out there, he was able — with a little prodding — to help get the folks aligned” behind a freezer-to-oven product, Caveny said of Romaniello. 

Lenore Krentz, Focus Brands’ chief financial officer, said it was forward thinking by Romaniello during the company’s early days that gave it a legacy of “completing acquisition integration projects below budget while achieving the targeted synergies — and on time.” Describing the recent Auntie Anne’s integration into Focus Brands as “the smoothest yet,” she added of Romaniello’s indirect role, “I think the acquisition approach and leadership culture he built here have been sustained and make us a stronger organization.”

Contact Alan J. Liddle at [email protected].

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