Qorval Restructures Franchise NetworkApril 20, 2010
A franchise operation with ambitious ideas for growth and a track record to match would appear to be an unlikely candidate for Qorval’s services. But despite favorable publicity in magazines such as Fortune and Entrepreneur, this particular Company was spending money at a rate that concerned its major investors due to slower revenue growth in this economic environment as well as significant monthly cash burn.
Qorval’s Director John Pryor, whose extensive background includes CEO management experience combined with franchise management operations experience, identified over $6 million in cost savings during a five-month engagement. As a result of Qorval’s leadership, findings and recommendations, the Company’s founder will return as CEO to implement Qorval’s revitalization plan.
The entity is a leading medical procedures company with some 70 locations in 18 states. Former management focus was more inclined to the fast-paced entrepreneurial side, rather than management by planning, strategy and realistic controls.
Qorval’s fact-finding showed advertising spending running at 22% of revenues. Restructuring will reduce that cost to a more reasonable and sustainable 17.5% of revenue. Likewise, a restructuring of the corporate staff and creation of a more equitable, comprehensive compensation plan reduced the annual cost of salaries and sales commissions resulting in a savings of $3.1 million.
Debt restructuring, negotiating more favorable payables terms, setting ROI thresholds on capital spending, and budgeting within revenue expectations and cash flow projections were among the other benefits of the Qorval engagement.
“Working with the Company demonstrates not only our expertise and experience in providing management services, but also draws on our depth of experience in working with franchise operations and entrepreneurs,” noted Pryor.