HC...I sincerely don't think about "why" Gay, Parsi, or anyone associated with $GIGL do things. I focus on "what" they do. I'm not being sarcastic or snarky to you, I mean this.
You posted to me: "I have yet to hear you say what is in it for Phil" I don't know and it doesn't concern me. Allow me to explain.
Your source of anxiety is trying to figure out what all these characters are thinking. Sorry, but you're asking questions you'll never get the answers to. No matter how many hours you think about it, there's no way to know their thoughts or motives. Honestly, give yourself a break (I sincerely mean this) and don't keep asking "why."
That's why I focus on what people do. Observe their actions. Yes, thoughts come before behaviors, but it doesn't help in this context.
Plus, looking for logic where there is none is futile.
Moving along.... I thought I'd ramble on some more.
$GIGL is in this predicament as a result of numerous errors by Parsi and the $GIGL gang. Parsi for his mismanagement of company funds and paying himself and friends obscene money given what they do for it and what stage $GIGL is in, in it's growth cycle.
If Parsi's $300,000 annual salary, Gay's (Triple Enterprise) $60,000 annual package (shares/cash), and who knows what other compensation he's dished out to the $GIGL friends and family, plus toxic financing...and over the years, all of it went to the restaurant's bottom line instead, $GIGL wouldn't be in this situation. If they had a competent CEO they would have been able to raise outside funding. That I know with 100% certainty.
How can this be saved? Here's some basic ideas. Don't get hung up on the details or the order I wrote them, I'm just free associating here so a couple steps might be switched around or timed differently based on the events as they play out.
1) Take the offering money, pay off the landlords and if there's any left, any vendors/suppliers.
2) The $GIGL gang pool their shares (and contribute cash) and sell enough to raise $500,000-700,000 cash. Then, ask for matching funds (1 to 1 or 1 to 2ish) from outside investors. Let's say the gang pools $500,000 cash. Then, they ask investors to match that amount 1 to 1 (dollar for dollar or dollar to two dollars etc.).
3) Let's say they get someone to match their $500,000 with $500,000 for a total of one million dollars.
4) With the million in the bank, they try to get an operating line of credit from their bank or their investor for $200,000-300,000. Do they still have that American Express line of credit? I think it was $175,000? Not sure, anyone remember?
5) Parsi and Gay will both step down and remain on as shareholders/investors. They caused this mess, they aren't the people to fix it. You don't call an arsonist to put out a fire he started. The investors who put up the $500,000 select a full-time CEO. This would have been a condition of getting the $500,000, they get to pick the new CEO and any other exec/staffing needs.
All the rest of the execs/advisors/consultants (the rest who are compensated) are reviewed for what they accomplished in the last three years and if they are needed moving forward. If they did nothing, they get terminated. Anyone who is selected to stay gets put on performance based compensation. They get zero until a new store is open and profitable. Anyone have a problem with that, terminate their involvement.
6) Now, with $1 million in cash, $200,000+ operating line of credit, no significant outstanding bills, and monthly burn rate far better, they go to the mall operators and hold them to their "red carpet deals."
Negotiate one store in the L.A. area (actually, right next door in Orange County would be even better demographic wise).
But they need to maximize their marketing resources here so it needs to be in the SoCal area.
7) Let's say they strike a deal for one decent store location (The Santa Anita location that was mentioned before would be good if Orange County isn't an option).
8) When designing the store, add 1,500-2,500 square feet to the original size. If the current locations are too often overcrowded, they are too small.
9) Now loop in Michelle Steinberg, Jillian, Tia, and who ever else can be looped in and have a Hollywood style celebrity only red carpet grand opening. (Yes, I ragged on Parsi about the celebs, but this is a one time event for maximum exposure). Michelle can easily organize this. They do these for all kinds of events now, not just movie openings or awards shows. In the future, you have have Jillian cooking events. They should add a 2nd celeb with her to help draw people in.
Then market the hell out of this new, improved, expanded location. New menu, new activities, install better lighting, sound, and plasma TVs. Make it more advanced than the current locations. You don't want these stores looking dull and drab like school class rooms. They don't have to be extreme like arcades though.
10) Get someone to really dive into the operational costs to get better deals with vendors with increased volume orders for there stores.
11) When $GIGL as a company is profitable, then execs compensation kicks in but only as a percentage of profits, with the viability of the company coming before execs pay. They make money when they operate a profitable company only.
Those are just some general ideas and NOT inclusive by any stretch. There's tons of other things to do too but you get the idea. It's doable as a turn around.
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