Don't let the name fool you. Famous Dave's of America (DAVE) may be famous among its fan base, but the little, less-than 200 locations chain is still widely unheard of.
With fewer than four locations on average per state, it's hard to imagine that this barbeque joint would ever become a household name -- let alone a nationwide sensation. But its newest executive hire changes all that.
Who is Ed Rensi?
On February 10 Famous Dave's announced that Ed Rensi, Director, would become its new interim CEO.
While Rensi, like Famous Dave's, might not have widespread name-recognition, in certain circles he's known as a game changer. Plus, he knows a thing or two about starting small and going large.
Rensi started out making minimum wage in 1963 flipping burgers for McDonald's (NYSE: MCD). Four years after he started, he was manager of his own store. Fast forward all the way to 1991, and he was president of the McDonald's company. He served from 1991 to 1997 before resigning to be with family.
Michael R. Quinlan, a veteran himself with McDonald's who once served as CEO and chairman, credited Rensi with helping to turn McDonald's into the powerhouse it became (and still is). Quinlan once stated, "Ed Rensi has been by my side for more than 25 years, helping immeasurably to expand McDonald's into the world's largest food-service organization and best known brand."
Now he's the head of little ole Famous Dave's. He said some powerful opening words by stating he's been a fan of the food for more than 20 years, a professional friend of the founder, and plans to lead the company "for the foreseeable future," which implies long term.
If Rensi's "interim" position becomes permanent, that'll be great news for shareholders.
His goal was simply stated: "I look forward to working with him and the Famous Dave's team on this great brand to unleash all of its potential."
"Unleash all of its potential"
Famous Dave's has been nicely profitable for many years -- even during the great recession of 2008 and 2009. While most of its competitors were desperately slashing food prices to entice guests, Famous Dave's didn't. The company didn't want to cheapen its brand image, which turned out to be the right move.
From an investing standpoint, the problem I've always had with Famous Dave's is that the chain always seems like it is just one aggressive expansion away from great growth in profits.
As recently as October the now former CEO John Gilbert stated, "[W]hen the macroeconomic headwinds begin to change in our favor, we will be well-positioned to take advantage of associated growth opportunities." It sounded like there was a plan to finally grow the chain; but there was no hard language of commitment.
Enter Rensi. Perhaps he's been brought in to move to the true growth phase the company has been lacking for years now. To say he wants to "unleash" the brand's potential is to imply that Famous Dave's was being held back artificially before.
That sounds about right. Rensi has a history of aggressive growth and bold moves at McDonald's. One additional aspect of having a legendary leader in charge of a smaller operation is that he or she tends to know the right people and command respect. Let's see what he can do with Famous Dave's.
Foolish final thoughts
Famous Dave's doesn't need to be the next McDonald's in order for shareholders to be rewarded greatly. It seems like it just needs an executive with experience, wisdom, and courage. Rensi appears to possess all three.
With less than 200 locations, there is certainly an enormous amount of growth potential. This is a great time to watch the company closely to see if, under Rensi's leadership, Famous Dave's turns itself from a small chain into a major one.