In this segment from Market Foolery, the team discusses the ongoing troubles at Buffalo Wild Wings (NASDAQ:BWLD), which has been trying -- with only marginal success -- to combat the headwinds facing many chain restaurants today. The guys consider the steps the company has already taken, its strategy going forward, and how hedge fund Marcato Capital Management (which holds a 6% stake) will take this latest set of results.

A full transcript follows the video.

This video was recorded on April 27, 2017.

Mac Greer: Shares of Buffalo Wild Wings down on Thursday after the company reported disappointing earnings. Jason, what's the story here?

Jason Moser: Oh, Mac. The news with Buffalo Wild Wings has been really more about activist investing than anything else, recently. I think the good news for the business, they finally got back to positive comps, albeit very close to flat. The bad news is, it was really close. I think this is going to open them up, perhaps, for some more targeting from Marcato Capital, that's the venture capital, the activist investor that's really trying to get in there and force management's hand here, I think actually force some change in management. I mean, it's at least understandable. This is a company that, right now, is in full-on cost control mode. They spent a lot of 2016 trying to figure out ways to gen up new traffic. Offers, daily deals, whatnot. That did OK. But it's not been enough to offset what has been a tough restaurants sector in general. There's a lot of competition out there. They're going to sell 13% of their company-owned stores, about 80 stores, that have been underperforming pretty significantly, generating operating margins, restaurant level margins of around 8% to 9% versus the 16% that they're turning in as a full base there. I think this is going to be a very tough year for Buffalo Wild Wings. I don't think this does anything to quell the activist investor talk.

Greer: Ron, let's talk Marcato, because they own a 6% stake in Buffalo Wild Wings. They've been pushing for the company to franchise more of its restaurants. Last week, they called on CEO Sally Smith to resign. What do you make of all that?

Ron Gross: Activism is interesting to watch. It depends what the goal is. I like activists that are coming in intending to stick around for a while, they're shareholders for the long-term, and they see improvements that can be made to increase shareholder value for all shareholders. Sometimes, you'll get these activists that come in for a quick hit, they come in with the typical, "I think you guys should pay a dividend, I think you guys should buy back stocks," they're in and out, they make a quick buck. That's not the activists that I prefer to see. If I'm a shareholder of a company and I see one of these longer-term folks come in with a real plan, that makes me happy because it's likely that they've identified that the stock is undervalued, and they have a plan, if management will listen to them. And that's where it can sometimes get contentious. If management will listen, there's a way to improve shareholder value here. That typically makes me feel good rather than bad. If I get one of these junkie guys that come in for a quick hit, that's not so great.

Greer: Back in your Wall Street days, when you were an activist investor hedge fund manager, which type were you?

Gross: [laughs] We were always long-term, we always wanted board seats, we always wanted to stick around and help the company operate better. Our suggestions were typically operations-based, not only solely financial-based, such as buy back stock or pay a dividend. We were interested in seeing the company really improve operations, for the most part.

Greer: So, when you look at Marcato, do you have a feeling one way or another?

Gross: I don't think Sally Smith necessarily needs to go. I think the franchise suggestions are not bad. I see some merit to those as well. But it's a tough business out there. Right now, as Jason said, the restaurant industry is struggling. They have some work to do. I don't know if Marcato is the answer. I think they really need to roll up their sleeves and get to work.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.