- WHITE PAPERS
After 18 tumultuous months as president of Shakey's Pizza, Sean Flynn stepped down from the top spot at the Garden Grove, Calif.-based chain on June 28.
Throughout late June, rumors circulated that Flynn had been fired following the June 12 settlement of lawsuits filed against the pizza company by two of its California franchisees.
Flynn would not comment on the rumor during a brief phone call days later, but said on July 3 that his departure was due to "extreme differences" between him and Inno-Pacific Holdings, Ltd., Shakey's Singapore-based owner.
Chin-Yong Wong, chief executive officer and chairman of the board of Inno-Pacific, agreed that Flynn "had his own reasons for not staying on," and said he has assumed Flynn's presidential duties for the near term.
Wong added that Inno-Pacific has no immediate plans to replace Flynn, and that he will stay in the U.S. as long as it takes to get the company back on track.
John McNulty, president of the Shakey's Franchised Dealers Association, said he was uncertain what Flynn's departure would spell for the company, but said it proved that Inno-Pacific was at least making adjustments.
"I'm not sure what they (Inno-Pacific) have in mind, but I'm hopeful that things will change for the better as a result," said McNulty, who has one store in El Monte, Calif.
Shakey's is now at a positive turning point, Wong added, and its future is something franchisees can look forward to. "With the litigation behind us, I now have to get myself familiarized with what the office does here, and then move forward."
Rise and fall
Flynn's departure marked the 13th time a Shakey's president either resigned or was fired since Inno-Pacific bought the chain in 1989. In February of 2001 he was hired to help revive the ailing chain, which had nearly 450 stores in the U.S. in the late 1970s. It now has 61 stores, most of which are in California.
During his tenure, Flynn hand-picked an eight-person turnaround team, worked to revamp the chain's menu and attract new franchisees. (Shakey's opened its first new franchised store since 1990 in May in La Habra, Calif.)
Flynn's presidency, however, was one long on challenges and short on victories. Since taking over, he and others worked unsuccessfully to settle out of court two lawsuits filed by franchisees in early 2001.
The nearly identical suits, filed by McNulty and Mick Clark (on behalf of his franchise company, Sterling Foods) were heard simultaneously in Los Angeles Superior Court in early June and ended in a sealed settlement.
At Shakey's annual franchisee meeting in September 2001, Flynn received mixed reviews and eventual criticism for a proposed revamp of the chain's aging menu. Called Triplets, the menu included miniature offerings of some of Shakey's most popular pizzas and side items, dishes franchisees said would not work in the chain's standard buffet format.
Despite those concerns, Flynn championed Triplets, as well as the Shakey's chain's potential for future growth.
"Shakey's has so much history and equity in the brand that if we could find a way to tap in to that, the potential is limitless," Flynn told PizzaMarketplace in a March interview.
But just two months before, Flynn was told by Inno-Pacific to find ways to save cash at the beleaguered firm, and key personnel departures -- voluntary and forced -- followed.
Flynn claimed Shakey's money shortage lay not with a shortfall in revenues, rather that funds spent to defend itself against the franchisee lawsuits had nearly crippled the company.
When a number of sources close to the story learned that Flynn was not involved in the June court proceedings, Alan Siskind, the consultant to Shakey's who developed the Triplets menu, said he believed Flynn's fate was sealed.
"I'd say that sends a message that he might not be involved in the future of the company," said Siskind during a June interview prior to Flynn's resignation. "I feel kind of bad for the guy. He's tried to do the right thing, but he's been between a rock and a hard place for a long time."
Prior to working for Shakey's, Flynn held executive positions with: Cerabos Pacific Ltd., the former franchisee for Pizza Hut in Singapore and Malaysia; A&W All American Foods in Malaysia; and Movenpick Restaurants in Thailand. In 1996, he started a foodservice consultancy firm in Vancouver, British Columbia, until being hired by Shakey's in 2001.
Now Flynn said he's considering a number of "very interesting opportunities ... in the restaurant business. I've been in this business almost 20 years; I like it, and I'll stay in it."