BWLD Buffalo Wild Wings, Inc. (delisted)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

SCHEDULE 14A

(Rule 14a-101)

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

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☐		Soliciting material Pursuant to §240.14a-12

Buffalo Wild Wings, Inc.

(Name of Registrant as Specified In Its Charter)

MARCATO CAPITAL MANAGEMENT LP

MARCATO INTERNATIONAL MASTER FUND LTD.

MARCATO SPECIAL OPPORTUNITIES MASTER FUND LP

SCOTT O. BERGREN

RICHARD T. MCGUIRE III

SAM ROVIT

EMIL LEE SANDERS

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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On May 11, 2017, Marcato Capital Management LP delivered a presentation and supplementary materials to Institutional Shareholder Services, Inc. The presentation is attached hereto as Exhibit 1. The supplementary materials are attached hereto and include an analysis of total shareholder return (Exhibit 2), quotes from research analysts (Exhibit 3) and submissions to http://www.winningatwildwings.com (Exhibit 4).

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SUBMISSIONS TO WWW.WINNINGATWILDWINGS.COM VALIDATE THE NEED FOR CHANGE Exhibit 4

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DisclAIMER The views expressed in this presentation (the “Presentation”) represent the opinions of Marcato Capital Management LP and/or certain affiliates (“Marcato”) and the investment funds it manages that hold shares in Buffalo Wild Wings, Inc. (the “Company”). This Presentation is for informational purposes only, and it does not have regard to the specific investment objective, financial situation, suitability or particular need of any specific person who may receive the Presentation, and should not be taken as advice on the merits of any investment decision. The views expressed in the Presentation represent the opinions of Marcato, and are based on publicly available information and Marcato analyses. Certain financial information and data used in the Presentation have been derived or obtained from filings made with the Securities and Exchange Commission (“SEC”) by the Company or other companies that Marcato considers comparable. Marcato has not sought or obtained consent from any third party to use any statements or information indicated in the Presentation as having been obtained or derived from a third party. Any such statements or information should not be viewed as indicating the support of such third party for the views expressed in the Presentation. Information contained in the Presentation has not been independently verified by Marcato, and Marcato disclaims any and all liability as to the completeness or accuracy of the information and for any omissions of material facts. Marcato disclaims any obligation to correct, update or revise the Presentation or to otherwise provide any additional materials. Neither Marcato nor any of its affiliates makes any representation or warranty, express or implied, as to the accuracy, fairness or completeness of the information contained herein and the recipient agrees and acknowledges that it will not rely on any such information. Marcato recognizes that the Company may possess confidential information that could lead it to disagree with Marcato’s views and/or conclusions. Funds managed by Marcato currently beneficially own, and/or have an economic interest in, shares of the Company. These funds are in the business of trading— buying and selling—securities. Marcato may buy or sell or otherwise change the form or substance of any of its investments in any manner permitted by law and expressly disclaims any obligation to notify any recipient of the Presentation of any such changes. There may be developments in the future that cause funds managed by Marcato to engage in transactions that change the beneficial and/or economic interest in the Company. The Presentation may contain forward-looking statements which reflect Marcato’s views with respect to, among other things, future events and financial performance. Forward-looking statements are subject to various risks and uncertainties and assumptions. There can be no assurance that any idea or assumption herein is, or will be proven, correct. If one or more of the risks or uncertainties materialize, or if Marcato’s underlying assumptions prove to be incorrect, the actual results may vary materially from outcomes indicated by these statements. Accordingly, forward-looking statements should not be regarded as a representation by Marcato that the future plans, estimates or expectations contemplated will ever be achieved. The securities or investment ideas listed are not presented in order to suggest or show profitability of any or all transactions. There should be no assumption that any specific portfolio securities identified and described in the Presentation were or will be profitable. Under no circumstances is the Presentation to be used or considered as an offer to sell or a solicitation of an offer to buy any security, nor does the Presentation constitute either an offer to sell or a solicitation of an offer to buy any interest in funds managed by Marcato. Any such offer would only be made at the time a qualified offeree receives the Confidential Explanatory Memorandum of such fund. Any investment in the Marcato Funds is speculative and involves substantial risk, including the risk of losing all or substantially all of such investment.

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Certain information concerning the participants Marcato International Master Fund Ltd. (“Marcato International”), together with the other participants in Marcato International’s proxy solicitation, have filed with the Securities and Exchange Commission (the “SEC”) a definitive proxy statement and accompanying WHITE proxy card to be used to solicit proxies in connection with the 2017 annual meeting of shareholders (the “Annual Meeting”) of Buffalo Wild Wings, Inc. (the “Company”). Shareholders are advised to read the proxy statement and any other documents related to the solicitation of shareholders of the Company in connection with the Annual Meeting because they contain important information, including information relating to the participants in Marcato International’s proxy solicitation. These materials and other materials filed by Marcato International with the SEC in connection with the solicitation of proxies are available at no charge on the SEC’s website at http://www.sec.gov. The definitive proxy statement and other relevant documents filed by Marcato International with the SEC are also available, without charge, by directing a request to Marcato International’s proxy solicitor, Innisfree M&A Incorporated, toll-free at (888) 750-5834 (banks and brokers may call collect at (212) 750-5833). The participants in the proxy solicitation are Marcato International, Marcato Capital Management LP, Marcato Special Opportunities Master Fund LP (“Marcato Special Opportunities Fund”), Emil Lee Sanders, Richard T. McGuire III, Sam Rovit and Scott O. Bergren (collectively, the “Participants”). As of the date hereof, Marcato International directly owns 950,000 shares of common stock, no par value, of the Company (the “Common Stock”), representing approximately 5.9% of the outstanding shares of Common Stock and Marcato Special Opportunities Fund directly owns 32,600 shares of Common Stock, representing approximately 0.2% of the outstanding shares of Common Stock. In addition, Marcato Capital Management LP, as the investment manager of Marcato International and Marcato Special Opportunities Fund, may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) the shares of Common Stock held by Marcato and Marcato Special Opportunities Fund, therefore, may be deemed to be the beneficial owner of such shares. By virtue of Mr. McGuire’s position as the managing partner of Marcato Capital Management LP, Mr. McGuire may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) the shares of Common Stock held by Marcato International and Marcato Special Opportunities Fund and, therefore, Mr. McGuire may be deemed to be the beneficial owner of such shares.

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A founder’s perspective: “I support the re-franchising”

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Unsolicited support from one of BWLD’s original founders “As one of the original 4 founders of BW-3 back in 1982, I have my own take on the current discussion taking place. As I travel to other cities and visit our restaurants, I am constantly disappointed by the consumer experience being provided. Dining areas are filthy, food quality ranges from good to terrible and employees are poorly trained… Marcato's focus, at least in the articles I've read, seems to be on re-franchising and financial strategies. While those are critically important, so is the guest experience. We all know of local restaurants where the food and service are always outstanding. They do little to no advertising but there is always a waiting list to be seated. That is not the case with Wild Wings. I've talked to hundreds of diners who all have stories about their sub-par experiences in our restaurants. I support the re-franchising, with the main reason being that franchised stores seem to provide a better guest experience. The actual owners are often on premise, making sure things are as they should be” –3/29/17 Source:Inbound communications submitted via email and through www.WinningAtWildWings.com. Note:Quotes shown as submitted and are not edited for spelling, syntax, or grammatical error.

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Employees and franchisees believe new leadership is needed at BWLD

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BWLD employees would welcome Change in leadership and strategy 8/17/16: “Many of us (home office employees) completely agree with your assessment, and your statement "...we have come to appreciate that suboptimal capital allocation behavior is symptomatic of a larger organizational deficiency: a tendency to favor gut feel and thematic proclamations without tangible evidence or appropriate analytical support." It is 100% accurate, and in large part, the reason we've had so many abrupt departures from the team since the beginning of the year, including - our VP of Insights & Analytics, who left in frustration because senior leaders refused to acknowledge the "realities" of the market and brand- followed by the Insights Director, who left a few weeks later - followed by the Beverage Director, who has accepted a VP Beverage Innovation position with DineEquity - and too many marketing and field people to mention[.] Pricing increases have been far too frequent and aggressive. Technology no longer leads. The loyalty pilot has been a bust. The GEC (Guest Experience Captain) role has shown negligible positive impact on store performance. The list goes on. We are hopeful that your focus will bring long overdue change.” Source:Inbound communications submitted via email and through www.WinningAtWildWings.com. Note:Quotes shown as submitted and are not edited for spelling, syntax, or grammatical error. 8/16/16: “Several of the BWW expats have had communication over the last couple of days. Just wanted to let you know that the assessment of you and your team, as it related to the challenges with Buffalo Wild Wings, are spot-on and things that literally we have been talking about and trying to change for years. Love the brand, just not the leadership so much” 4/20/17: “Marcato has the support of most employees (current and former). The majority of us still have a passion for the Buffalo Wild Wings brand, and want to see it succeed”

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4/11/17: “In full transparency, I am a former employee. Left on good terms with the company. But the frustrations I had with the lack of communication and infrastructure had me shaking my head often. With more than 20 years in the restaurant industry, I was quite taken aback to learn that my two supervisors - a direct, and a vice president - had NO restaurant experience. And these were the people "leading the charge'. It provided a lot of frustration to both me and my peers” complacent leadership culture has demoralized Employees Source:Inbound communications submitted via email and through www.WinningAtWildWings.com. Note:Quotes shown as submitted and are not edited for spelling, syntax, or grammatical error. 2/22/17: “Just had a chance to quickly scan [Marcato’s] BDubs deck…The HQ staff is silently cheering” 2/20/17: “The culture that middle management has created or was directed by executive leadership is dispiriting all management running the four wall execution. Bonus structure for managers are consistently changed to benefit the companies profit with no regard for the managers working 80+ weekly” 1/11/17: “I am a former operations & franchising VP of the brand…I think I can speak for many of us when I say we still have / had a great deal of passion for the brand, but saw certain writing on the wall. From the lack of investment into Product R&D, the lack of operations experience/leadership in the SVP/C-Suite and board room, the lack of a solid and long term strategic plan, to the way the franchise community were viewed as step children, all caused me/us concern. I've remained very close to many franchisees and I am confident stating that your platform and the areas in which you intend reform will be very well received. As a past and future share holder and continuous user, I welcome your position and efforts” 4/20/17: “It was disappointing to see all of the talent and experience of teams be stifled by upper management's lack of planning. Having worked closely with franchisees over the years that I was with BWW, I heard their frustrations…however, I was always told that it could cost me my job if I pushed back or offered empathy for the franchisees”

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field operators see numerous flaws in BWLD’s “strategy” 4/29/17: “As a former field leader for them that was eliminated as part of the “efficiency” program that the leadership at Buffalo Wild Wings discussed…Knowing the individuals delivering the call as I do, it was extremely apparent that they were nervous and unprepared. They filled their presentation with excuses on why they so horribly missed Wall Street’s EPS estimates. Their favorite excuse being wing costs. • A while back the company introduced the concept of selling wings by the weight. The expectation was that locations would take a case of wings, twice a day, and weigh them and adjust the number of wings that are served for a snack, small…etc. This was done in an effort to address the wing sizes and cost per wing impact. As many of the other programs put in place by Buffalo Wild Wings, it isn’t happening. The level of importance of doing this has not been communicated by senior leadership. They live in a delusional and misguided world that they believe that because they say you are supposed to do it, you will do it…The other component that they didn’t mention is that COGS went up significantly because there was no longer a charge for the accompaniments of celery, carrots and dressings with the wing orders on value days. They KNEW and communicated there would be an impact to COGS but said the stores would just have to ‘suck it up’ • Delivery was a high point that the leadership continued to try and use as an example of how they are moving in the right direction. This is not entirely true. It is true, delivery sales have seen a significant spike in most locations. However, the cost associated with the delivery component is astronomical (to coin a recent term you used). The process is extremely complicated at the location level with double entry of orders. The third party delivery company sends the order via and iPad and then the team in the location needs to reenter the order into the POS. Because of the extreme speed that this was rolled out, it made for some unforeseen challenges. One of which was pointed out by the “efficiency company” they employed that the take-out areas in B’dubs are poorly designed and “crash and burn” at peak times. • After Delivery rolled out, there was no long-term plan and execution was not good. The third parties that BWW used (GrubHub and Door Dash) approached BWW with a threat of dropping them as a client. The model that the third parties use incorporates a 4% error factor that they are willing to absorb as part of the overall model. Well, because BWW had not addressed the importance of ironing out any kinks in the operations of take out, the error rate at BWW was over 10%. With the slim margins that the third-party delivery folks have, this high error rate was just not going to work. Coincidently enough, the District Managers and Regional Vice Presidents that had the worst results in this area are still there and were not removed during the down-sizing… • These are just examples of how the company was up 0.5% in sales for Q1 but the main impacts were COSTLY traffic driving programs like value day adjustments and delivery. They also had a shift in the where Easter Fell. • Two final statements about International growth and R Taco. Tim Murphy was put in charge of the rollout of the company store openings in Canada as part of his indoctrination in the role of leading international. Because of his complete lack of experience in operations at a high level, the locations failed miserably and were on the verge of being written off over and over again. It wasn’t until North American operations took over the locations that we saw turn around. Tim Murphy is not the man that should be leading International and that is part of why it is moving SO SLOW.” Source:Inbound communications submitted via email and through www.WinningAtWildWings.com. Note:Quotes shown as submitted and are not edited for spelling, syntax, or grammatical error.

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“field leadership team [does] not trust senior leadership” 4/24/17: “Recently, Buffalo Wild Wings has been utilizing a “voice of the employee” mechanism called FORUM to measure the level of engagement of team members of all levels at Buffalo Wild Wings. This is done every six months. In years past, they used a mechanism called Say it! Do it! Live it! When that mechanism was used, the senior leadership team used to communicate how well engaged the members of the team are. Since the use of FORUM, there have been no companywide communications to show results as a brand. The latest FORUM survey was launched the week after they reduced the workforce. Results won’t be available for a while. As investor, I am very sure you would like to know the results of the previous two surveys. In those surveys it indicated three important facts (if you ask for this information, be sure to ask for it broken out by each layer of field leadership, I’m sure you will be shocked): • The field leadership team did not trust senior leadership • The field leadership team does not believe the senior leadership team lives the company values • The field leadership team does not have confidence in the direction the senior leadership team has put forth or if they even have communicated one to the field. It’s really no surprise. The organization does not have a culture of accountability. Many years ago the company hired an organizational development company to help with the growing pains of rapid expansion. Their diagnosis was that there were too many committees and groups that were working on things that were either nonessential or were being worked on by other teams so they were duplicating efforts. All of these groups then flooded the organization with priorities and the field was confused and struggled to stay focused. The expectation the company proposed was to narrow spheres of accountability and cut out all the committees because it was leading to a culture of where shared accountability of a group equaled no accountability at all which then lead to no progress. They also said to stay focused on no more than a few priorities because as you add more priorities, the importance of them declines exponentially. Several years later, the company has abandoned that philosophy and went back to committee after committee. NABT and all the other sub teams that are in place. The largest growing segment of office space in the home office is not additional cubicles for additional support team members to support the field, guess what….its meeting rooms…Now the enterprise has hired yet another company to help with organizational development to see how the company should be structured which centered around observations of a small sample of franchisees and company locations. This looks to be the basis of the reduction in workforce. How many companies does this organization have to hire to tell them how to operate? Isn’t that the board of directors main mission? … New leadership is needed both at the senior leadership level and the board that “holds them accountable.” The enterprise just sent out their proxy information. They hail the increase in share value of 1697% since the IPO. This shows how strong the brand has been over the years. Unfortunately, the leadership in position now is not poised to take this brand to the next level as evidenced by their floundering over the last couple of years. Small company ideas do not solve big company problems” Source:Inbound communications submitted via email and through www.WinningAtWildWings.com. Note:Quotes shown as submitted and are not edited for spelling, syntax, or grammatical error.

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BWLD culture lacks accountability 3/2/17: “Bungled technology implementations that have distracted management from satisfying the core customer base…Lower labor costs can be achieved if managed correctly. POS replacement to Aloha- right after Lee Patterson got removed from IT. The write downs on these POS changes were the largest to date in company history. They set a precedent that made future mistakes look acceptable. It changed the company culture… LMS - Learning Management System, one deadline pushed after another. Lots of time and money with little-used results. This one's a doozie… B-dubs TV - nice idea on a limited basis, but way too much effort into something that doesn't add much value… Pay at the table - jeez, what disaster. Take it behind the barn and kill it… Dig into projects around Lee Patterson. He came from Applebee's and pushes for "big boy" systems that eventually contributed to Applebee's downfall. Repeating this at BWLD…He's big on "the next big thing" and has a poor track record of finishing projects that pay off any ROI. Any initiative that has a back-end promise can probably be traced back to suggestions from this guy. "In 3-5 years, this will really pay off...“… Overall, Patterson is a futurist technologist who really doesn't get the bdubs customer, so every initiative tends to miss. The worst part is how much it distracts from the core business. Bottom line - this guy never figured out how to make money. 3/7/17: “Another huge problem is watching individual stores fail due to poor management and low accountability standards from Regional Managers” Source:Inbound communications submitted via email and through www.WinningAtWildWings.com. Note:Quotes shown as submitted and are not edited for spelling, syntax, or grammatical error. 4/20/17: “My Director and my Vice President had zero restaurant experience, yet they were responsible for driving sales and innovation. It was dumbfounding”

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Pattern of poor execution 4/20/17: “BWW would roll out programs without a fully prepared game plan, and definitely without an exit strategy. One example of this is the Loyalty (Blazin' Rewards) program. After several years, this program has still not been fully developed…Another example is the BOGO Blitz - every month BWW is now pushing a discounted offer to our guests through digital and social media. Anyone with experience in the restaurant industry can tell you that this is a bad idea. When you offer a monthly discount, you are training your guests to wait until an offer is pushed out before visiting BWW. Additionally, these monthly offers are not communicated timely for our operators to fully staff and execute the program to provide our guest and team members a pleasurable experience.” Source:Inbound communications submitted via email and through www.WinningAtWildWings.com. Note:Quotes shown as submitted and are not edited for spelling, syntax, or grammatical error. 2/22/17: “As an operator of a high-volume BWW location, the amount of operational changes that have taken place these last few years has taken a significant toll on all team members. [It] seems that we are throwing everything at the wall in a panic to see what sticks. The only way to increase revenue is to increase guest experience, tighten four-wall execution, and simplify the processes. Introducing an immense amount of operational changes in such a short period of time leaves everything muddled and gives no room for growth”

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“wing-counting” strategy has been executed poorly & harms all constituents 2/20/17: “I previously worked for BW3's as a full-time shift lead…The transition from discrete quantities of chicken wings (8, 12, 18, etc.) to variable-quantity "labels" (snack, small, etc.) has been nothing but a nightmare for everyone involved. Let's dissect this market failure from a few different points of view: The customer --The expectation when walking into a "wing joint" is that you'll be able to order X quantity of wings for X price. The customer's expectation is immediately not met when looking at the menu for the first time. They'll probably question the motives behind the non-standard ordering requirements (maybe consciously, maybe subconsciously), and the solution the customer is offered may not be satisfactory. Also, in my experience, "snack" boneless wing counts were rarely ever in the "9" category, much less so than the "7" category, which seems to favor the company over the customer. Upon hearing the explanation of why the transition was made, the customer will likely be more critical of the quantity of food he/she is receiving, drawing attention away from the other positive things that make BW3's a great place to eat. Bite the bullet and factor the variance into the cost of the wings. The server --Explaining the reasoning behind wing quantities takes time to explain to customers. Most restaurants live or die based on service and ticket times… The kitchen --Counting and weighing wings adds workload to both managers and kitchen staff that could be spent elsewhere. These personnel already have a ton of tasks to juggle and may not have time to get around to (such as filtering the fryers twice a day [pretty unreasonable]). Instead of focusing on the company's bottom line, focus more time making the experience as best as possible for the consumer. There are a slew of other minor inefficiencies, such as making inventory harder to calculate, additional quality control at the expo window, remembering to update the count stickers, on top of the added cognitive load required to remember to count out the wings” Source:Inbound communications submitted via email and through www.WinningAtWildWings.com. Note:Quotes shown as submitted and are not edited for spelling, syntax, or grammatical error.

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Deficient corporate strategy has alienated “core customers” 3/8/17: “[W]e have had many issues ranging from food quality, to customer service, to overall convenience. Our biggest issues have been: - Inconsistent food quality (we predominantly order wings, and they come out with too much sauce, or too little sauce, are over-cooked, or under-cooked) - Inconsistent customer service (we have found a handful of servers over the years who have gotten to know us and treat us great, but beyond that, the transient nature of the server position usually winds up disappointing us, resulting in slow/inaccurate service) - The Guest Captain position has always perplexed me as a customer. From my vantage point, the only function the Guest Captain ever performed was hovering in the dining area introducing him/herself as the Guest Captain. When we dined during particularly busy times, it would have made sense for the Guest Captain to step in and assist where necessary, however, they always appeared to fumfer through the dining area aimlessly. Seemed like a very frivolous/wasteful FTE in my opinion. - My 5-year-old daughter always loves the tablets in the restaurants that we frequent. However, at BWW, the tablets always seem to be broken or unavailable, and higher level functionality doesn't seen to exist (i.e., paying your bill, ordering, etc.). We ate at Olive Garden this evening and had a wonderful experience with their tablet. We like Buffalo Wild Wings, and will continue to return. That said, it sure would be nice for the ops management folks to get some of the basic consistency issues ironed out. We have spent thousands of dollars dining and drinking at BWW, and would love to see it evolve from a quality and service point of view.” Source:Inbound communications submitted via email and through www.WinningAtWildWings.com. Note:Quotes shown as submitted and are not edited for spelling, syntax, or grammatical error.

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Deficient corporate strategy has alienated “core customers” (Cont’d) Source:Inbound communications submitted via email and through www.WinningAtWildWings.com. Note:Quotes shown as submitted and are not edited for spelling, syntax, or grammatical error. 2/20/17: “My biggest complaint is the price. I was a huge customer for years. That has changed. Now I go to hooters. It seems like your prices raised while the wing sizes got smaller. I don't even know how many wings I will get in a order anymore. Its only a estimate now, I could get 7 maybe I get 10. You even charge for a tiny cup of ranch. I understand you need profit but this is to much for me. Unless it was to change I will not be back. I will just drive straight by it to get to hooters” 1/4/17: “Being a fan of BWW, I stood in line at my neighborhood store to be one of the first 100 people to get free wings for a year (6 wings/week). That was over 6-years ago. Since that time, I have visited BWW less and less and now only visit once every 3-months (maybe). My biggest qualm...the prices. While I would love to meet with my girlfriends or work friends at BWW's, we all have the same response, ‘It's too expensive’…And I have to pay how much for each additional ranch?! At a sports bar, you want to stay for awhile, to watch the full game, but the price of the alcohol and food don't mesh with this kind of atmosphere…In the first three years of the BWW's being open in my town, the staff was very quick, knowledgeable, knew the menu and were very attentive. Yet, this no longer seems to be as high of a priority. In visiting the restaurant in the summer of 2016, while I appreciated the waitress' personality for our table, the lack of priority was evident for others…I would love BWW's to be my restaurant of choice, once again, but until some things make a change for the better, I can't see myself visiting there more often than I do now.” 1/3/17: “Simplify the menu. You used to pretty much sell wings and now the menu is all over the road. Have you ever seen the menu at Cheesecake Factory? Gives me a headache with all the choices… “I have been going to BWW ever since they opened their doors in Dallas and I have seen a decline in enthusiasm with the staff. You don't sell wings. The product is your service. I go for the food of course but more importantly how I'm treated each and every time. There are some locations I will not step foot in again to a poor experience…I have seen too many times where staff is goofing around with their colleagues as opposed to getting a customer more water after consuming blazing wings. Not a pretty sight! Keeping customers happy will keep brining them back even when economic times are tough”

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Buffalo wild wings stores are run better when owned by franchisees Source:Inbound communications submitted via email and through www.WinningAtWildWings.com. Note:Quotes shown as submitted and are not edited for spelling, syntax, or grammatical error. 4/13/17: “I am a former BWW franchisee who sold my stores to the BWW [corporation]. I created many of the promotions BWW uses to this day and was awarded all of the BWW franchise awards possible. Immediately after corporate took over the operations, I started to get phone calls from most of my mangers complaining about the ‘forced’ operation procedures which negatively impacted customer satisfaction. They all wanted out. My motto was to count smiles not wet naps. BWW corporate took a much different approach and tried to run the operations like their own stores. This lost all local identity and respect. I had customers call me and say[, ‘]I'll never go back into the stores[’] because the culture had changed their experience”

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leadership change is needed to prevent irrevocable damage 4/17/17: “Buffalo Wild Wings senior management is taking the company down a path of no return. They recently "compressed" 50 home office and field employees in an effort to reduce costs and to create a diversion from what is sure to be another disastrous earning call next week. This move was done under the guise of getting "closer to the work". They have yet to be able to articulate how doubling workloads because of the firings gets anyone closer to anything. This management team is blindly following the script of a third party efficiency consultant, with no regard for tenure, value or experience. The moves made last week have weakened the organization, created morale and loyalty issues as well as significantly reducing the level of support that both Franchise and corporate units will receive. Original ideas are foreign to current leadership. All the success achieved in previous years was due to ideas from the field (table service, value engineering of remodels, limited time only menu offerings...). Management initially fought all these initiatives until they ultimately took credit for them. The worst ideas (generated by leadership) which cost the company tens of millions (Guest Experience Business Model, unifying to a single POS when they [knew] that the provider had significant programming issues) continue to plague the organization to this day. The firing of four dozen key employees may have slightly improved the bottom line for one quarter but did nothing to address the real issues still in play: *Lack of menu innovation which has driven customers elsewhere. *Inferior POS support which has cost Franchisees and corporate operators hundreds of thousands of dollars in lost revenue. *No technology innovation in a changing climate where competition is cutting edge. *No plan to effectively market to millennials. This management team must go. BWW is an iconic brand that is beloved by the nation but is in danger of implosion. Please right this rudderless ship!” Source:Inbound communications submitted via email and through www.WinningAtWildWings.com. Note:Quotes shown as submitted and are not edited for spelling, syntax, or grammatical error. 4/13/17: “To improve the performance of BWW, I would clean house and get operators involved in the management. Now you have bean counters and attorneys running the show with lip service about customer care” 4/28/17: “It was obvious from the earnings call that the guest experience is less than ideal. Why are you not calling on Sally Smith to replace the person responsible for that area? When the NRN survey says the guest experience is at the bottom across all categories, the Senior Vice President of Guest Experience is clearly failing. Why does that position even exist? Is that person the "Head Guest Experience Captain? Did they take an idea that works well at high volume stores and force it across the system? Another failed initiative from Lee Patterson. Fire him!”

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Employees & franchisees alike support marcato’s strategy recommendations Source:Inbound communications submitted via email and through www.WinningAtWildWings.com. Note:Quotes shown as submitted and are not edited for spelling, syntax, or grammatical error. 2/22/17: “Thank you for your company's recent letter to Buffalo Wild Wings, Inc. highlighting many of the valid, fundamental issues and strategic mistakes which continue to hinder our franchise success and growth. As a current 24 year franchisee of BWW, Inc, I have expressed many of these same highlighted issues to our franchisor, its executive committee, its operators and representatives only to be relegated to the background and advised to "...not be contrary or outspoken". Over recent years our company has seen and realized a marked paradigm shift in our BWW, Inc. franchisor strategies, its methodologies, its greed, its waste, its accountability, and its systematic limitation/ elimination of its franchisees, their available territories and future for growth. It is not just BWLD's stock price that is compromised or limited by the highlighted issues listed in the letter… It is my sincerest hope that BWW, Inc's executive committee, will heed your company's structural and strategic advice responsibly. That many of the issues which hinder BWW, Inc. have been highlighted in your company's letter is much appreciated and long overdue” 12/8/16: “Fresh senior management which has a real interest in franchisees profitability vs. their own stock options. Consistency in the application and enforcement of system standards and other compliance requirements, including remodels. Too many pet and favorite son franchisees getting special treatment: Ansley, Cook, Hutchinson, Ward” 12/8/16: “Franchise operators always seem to produce higher sales per seat/unit at most chain or casual dining restaurants. It is no different at Buffalo Wild Wings. A closer look at Company operations would identify numerous markets that fall far, far short of what franchise operators can (and do) produce in many areas of the country” 12/6/16: “I was VP Franchise Sales with BWW 1997-2008 and awarded many of the current franchise agreements nationally as well as approved franchise sites. One of the reasons I decided to leave early 2008 is the company's continued priority of company store development & their desire to hold future territory for company stores. It was pretty clear during my 10 years at BWW that franchising was the "weak step child" of the brand. Creating a pro franchise format and refranchising company stores will unleash the brand to new heights”

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Shareholders are frustrated with the status quo 3/10/17: “Buffalo Wild Wings continues to miss the mark…As a shareholder I feel the leadership has gotten complacent, and aren't focused on the needs of their shareholders, but instead their own greed” 3/9/17: “Owner of 1986 shares. I agree with all your perspectives. I have listened to most of the quarterly calls and it has become more yada yada and nothing improves. One area is at seat ordering and they have never gotten this done right. I just came across an app that could be implemented quickly and cost effectively that is done, not off a tablet that BW3 has to purchase, but off a customers smart phone and is done without a specific BW3 phone app having to be created…BW3 should be a leader in this regard.” 2/20/17: “I have read the reviews on the naples' fl bw3. I am a stock holder. The reviews on yelp and trip advisor are terrible. This is not good…I see that the company wrote off $600,000.00 in the past year on pizza rev. So much for research. I wonder how rtaco is doing?” 2/23/17: “Like you, I believe that BWW's decision to buy back franchised stores was a mistake. I would be interested to find out how this decision was made” 2/20/17: “I own 1800 shares in an IRA. Current management is 'in over its head. Last year the CEO's excuse on CNBC for lame financial performance was that March Madness hadn't produced enough exciting games, but she promised that the upcoming soccer tournament (Copa America, I think) would turn it around, which was nonsense. Appalling Yelp reviews about service indicate poor oversight and quality control” Source:Inbound communications submitted via email and through www.WinningAtWildWings.com. Note:Quotes shown as submitted and are not edited for spelling, syntax, or grammatical error.

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Shareholder support for Marcato’s plan for change 12/6/16: “Just go ahead with your plan! Very much appreciated! I can't see why any rational individual could argue against it” 3/8/17: “You guys have come out with some fantastic analyses. Thank you for holding management and the board accountable!” 12/15/16: “Marcato Capital Mgmt, I'm a long term shareholder of BWLD since April 2005; and I greatly appreciate all efforts to increase shareholder value” Source:Inbound communications submitted via email and through www.WinningAtWildWings.com. Note:Quotes shown as submitted and are not edited for spelling, syntax, or grammatical error.

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support for marcato’s director nominees Source:Inbound communications submitted via email and through www.WinningAtWildWings.com. Note:Quotes shown as submitted and are not edited for spelling, syntax, or grammatical error. 3/30/17: “Lee [Sanders] joined the BWW executive team in 2001 as SVP Development & I reported to Lee. His creativity and leadership company-wide were, in my opinion, key factors in the amazing franchise & company restaurant expansion we experienced through those "go-go' years… His innovative franchise sales incentives & site modeling knowledge were built into the BWW FDD with great success. We attracted quality restaurant operators nationally to carry the brand forward. Without Lee's leadership & common sense approach BWW would not be the successful brand that we all love today” 3/30/17: “As an owner operator of 250 restaurants across the USA, I feel very fortunate that I was able to work with Lee Sanders…He always provided our company with great insight, expert advice on how to implement a very fast paced development plan, and kept us focused on the importance of building the brand the right way. As a result of his outstanding leadership, keen business insight, and total in-depth knowledge of the franchise business model, we eventually built 41 successful Buffalo Wild Wings units. We always had the utmost confidence in Lee's ability to lead the Buffalo Wild Wings development to new heights of success” 3/31/17: “I had the privilege to work with Lee Sanders during my time as a Director at Buffalo Wild Wings… Lee is a consummate professional and talented leader. He is extremely well respected within the restaurant and franchise industries for his strong leadership and ability to build lasting relationships. These skills are especially apparent when working with franchisees. While he is unafraid to make difficult decisions that he believes are best for the long term viability of an organization, he actively seeks to collaborate to determine the best course of action. I experienced this leadership firsthand, as he chartered the course to quickly and successfully grow Buffalo Wild Wings from a regional brand into a well respected national restaurant brand that was highly desired by landlords and municipalities. Always willing to also take calculated risks, Lee provided the vision to keep the concept fresh and profitable. He also provided the structural framework to ensure success”

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support for marcato’s director nominees (cont’d) Source:Inbound communications submitted via email and through www.WinningAtWildWings.com. Note:Quotes shown as submitted and are not edited for spelling, syntax, or grammatical error. 4/13/17: “I see Lee Sanders might get on the board and I would highly endorse Lee. He came in when I had already opened some restaurants and made a significant improvement on getting the franchisees perspective in front of his bosses. He is a no non-sense guy who understands what drives the business” 3/8/17: “Thanks Mick, You are bold man orchestrating a brilliant maneuver. I am very grateful for your leadership at this time for BWLD…You couldn't have chosen better Board members in Scott Bergren & Lee Sanders…Your Team & ideas are brilliant. For that, I thank you! I have several ideas regarding the capitalization of this company, far different from the humble ideas of current management of 1.5X Debt/EBITDA & buybacks. The ABS debt market would be a better home to return capital” 3/30/17: “As a former Director, Sr Director and VP in a variety of franchising and operational roles at BWW, I worked with and for Lee...[He is:] Trusted and Respected by franchisees as fair, honest, impartial and firm when necessary. Sometimes he had to make the tough and unpopular decisions that were best for the business…in the end, it was clear the right decision had been made. He also always looked out for the benefit of the system. He is an acknowledged content expert in the company for franchising and restaurant strategies. The strategist who was the critical driver of the massive growth of the chain from a 100 units to 500+. Lee had a vision of how to grow that brand. I arrived at 117 locations and departed at 599. From 1982 - 2001, no one else was able to plan for and execute that growth. Acknowledged in the casual dining industry as an operators' operator” 3/2/17: “Lee Sanders - there's a guy who knows how to make money. Great choice! If you get one director on the board, push for Lee Sanders”