Client
Family-owned, restaurant investment group with over 160 quick serve restaurants under management including Burger King, Jimmy Johns, KFC, and IHop.
Challenge
MBN Brands was growing rapidly through acquisition. As a result, each of the newly acquired restaurant operators had their own service providers and independent billing and invoice processes.
The investment team at MBN was accustomed to acquiring and operating the restaurant brands, but lacked the spend-area expertise to identify, achieve, and sustain cost reductions.
According to Michael Mulcahy, Partner, MBN Brands, “We focus capital on businesses that demonstrate both strong tangible (financials and assets) and intangible qualities (leadership, mission, and values). Our team brings enterprise strategy, marketing, financial guidance, and leadership development expertise to each of our partners. However, we’re not experts in these spend areas that were taking a bite out of profitability. It made more sense to outsource that expertise to SIB so that we could focus on our investments, growing the company, and driving EBITDA while they (SIB) secured long-term saving improvements for us in expense categories with inefficiencies.”
Solution
SIB conducted an initial scoping analysis with assistance from an industry partner, InfoSync, a provider of accounting, payroll, and reporting services for the restaurant industry. According to Christian Johnson, VP of Business Development at SIB, using an Automation AP system takes 99% the burden off the client for the invoice collection phase of our work.
Once the spend analysis was completed, SIB identified three key areas of addressable spend and ruled out other areas where MBN Brands already had optimized pricing.
We identified, three spend categories with the greatest opportunity for cost reduction.
- 36% annual savings in waste management for solid recycling and compost
- 14% annual savings in telecom spend for phone and internet.
- 2% annual savings in banking fees
Results
MBN Brands accepted SIB’s recommendation for cost reduction in the areas with the greatest addressable spend representing an annual spend of $375,000. Over the next five years, SIB will continuously monitor spending and remain vigilant in sustaining the rates achieved through the spend analysis. MBN is expected to save nearly $1.9 million over a five-year period.
Highlights include telecom vendor consolidation and optimizing waste removal spend.
- Telecom: We recommended and implemented a full vendor consolidation. Our experts have worked in the field for 25+ years and know the carriers and the industry very well. Telecom consolidation is hard work and can be very tricky.
- Waste Management : Our team found a wide variety of rate reductions, made some vendor changes, and service standardizations. As a result, MBN now has optimized service levels, pick up frequency, and rightsized waste containers.
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