1. Executive Summary: Porcini’s vision is to expand rapidly in the market. The key executive team
members in Porcini included Alessio – VP Marketing, Kurt Jensen – VP Operation, Wanda Halloran-
HR Director, and Mariana Molise- Chief Chef. Porcini’s mission is to leverage its strengths for growth.
Considering the strength and options available, organization’s overall strategies are to launch pronto’s
concept and adapt company owned-and-operate model. In the later section we will also discuss
appropriate risk and mitigation strategies to make sure we have advised proper risk management
strategies [ext1] to adopt pronto’s concept.
Business Objective: What Porcini is looking for?
Porcini is looking for new opportunities to grow its established brand into new markets throughout the
Northeast. The markets for full-service restaurants are nearing to a saturation point at both in-city and
shopping mall locations. For this reason, Porcini’s is considering to open limited-menu outlets called
“Pronto” at interstate highways. Porcini’s management is considering the options of franchising,
syndication, and a company-operation model to increase their footprint, while maintaining its
reputation for excellent food and service. After doing some financial analysis of this three options,
franchising is the most profitable option; syndication is the best comprehensive option for Pronto
because it also allows the company to preserve its brand image.
The first option for Porcini’s management is to look at the franchising approach to accelerate growth.
This option could provide the greatest Return on Investment (ROI); however, it may compromise
some key elements of the business model (Exhibit 1). The first issue that franchise is thinking that it
may compromise Porcini’s reputation for high quality service. The biggest questions to the
management whether “it will take a risk to hand over its control to the outsider and that may damage
its band value. It is almost sure that the legal/regulatory contract would require the franchises to meet
Porcini’s standards, but that can break down their practice”. The thought of having a brand image in
the hands of outsiders is a key deterrent to the franchising model. Management’s next concern is the
value of the Porcini’s brand. Since “Porcini’s isn’t a household name like Burger King, it’s doubtful that
Porcini’s could extract high fees and royalties from franchisees”. These concerns outweigh franchising
profit potential. The past success of the company came from complete control over the dining
experience, and because franchising compromises this, management must pass on this option. In
2010 it was awarded best chain services. The plan is to add few demanding services such as bear
and wines along with innovative foods to attacks Traveler.
Problem and Challenges
The real problem is that the organization failed to carry on its rapid growth due to recourse constraints
and its inability to become a powerful brand in the market.
To better understand the strength and weakness of Porcini’s new model, we have provided SWOT
analysis [ext2], cumulative analysis for company owned, syndicate and franchisees [ext3].
Organization Strategy
Porcini Pronto’s strategies to make this very successful are Process excellence and Cost
strategy such as innovative Process, food with low cost and faster service, HR Strategy such as
employee rewarding , stock option, leave encashment, performance bonus, Hiring strategy such as
hiring right attitude people and training to enhance soft and hard skill, IT Strategy - Wireless facility to
swap the credit and debit card in the table itself to pay bill, big TV screen with greeting, marketing
promotion and entertainment .CEO’s vision is “To become great Italian cuisine without wait”.
Driver and Success Factor
The various key factors that drives the Porcini’s success are outstanding service quality, food quality,
and value for money, branding reputation, Innovative food with reasonable cost to deliver as “flesh
Debasis Chakraborty International Business School EMBA Porcini Pronto Case

2. cooking in great atmosphere”, cleanliness in the toilet and bathroom, ownership and process
excellence.
Porcini’s Pronto success factor is also driven by value driven vs. its core competencies [reference 3 in
the appendix]. Pronto’s model has shown various potential opportunities and it targets customer of
interstate highway, with table served meals at reasonable price. There is a big opportunity as this
segment is not saturated and current statistics shows, it has potential to grow above industry average.
Pornto has also planned to use Porcini’s balanced scorecard to analyze the overall quality of services
and customer satisfaction.
Porcini is also looking for aggressive growth and key drivers included process excellence and cost
control, operation efficiencies, improve the quality with reducing the restaurant space .Currently
Porcini has 142 seat with 6900 Sqft where as the proposed Porcini Pronto’s will be having 85 seat with
4200 sqft. [Reference to exhibit 3].The strategy is to setup at Porcini Pronto with limited menu
available option and it could be resulted with faster service, cost reduction, quality excellence and
better customer satisfaction. The expected setup cost at Porcini Pronto is $2.1 million with revenue
$2.4 million for each side and expected profit is 6%, where as with the current Porcini, it is $4.3 million.
Deeper Analysis
Franchises is the most profitable option as it can generate revenue from licensing, but there is a
threat that it can damage the brand value as the potential threat is that, it can lost the quality and
organization control . The profit model will be 5-6% royalties and upfront fees. As Porcini doesn’t have
construction unit the better option for them is to buy or lease the land in an attractive location. In this
case there will be 1 million costs for legal and 2% pretax profit. They have started royalty Card such as
Porcini’s Pal card, $3 discount in customer’s next visit. The greatest prospect of company owned and
operate model will be fit in all aspects such as Short run return, Long Run return, Pilot Concept,
Maximized Risk ,Protect Porcini brand value.
There are various other factors such as reasonable/lower cost model: dinner cost ($9 - $17) compare
to lunch cost ($6 to $12) will generate higher volume of sales in the peak lunch and dinner time, Time
and Demand management strategy can be adopted so there will be operational efficiency and it is
expected that in average customer will spend 45 min for dinner and 30 min in lunch and it will optimize
with low waiting time. Organizational efficiency such as highly skilled staff with average team size of
12-15 People.
In the syndicate option, cost is 4% of annual revenue and the transaction cost is 6% of the property
values. The cumulative analysis has produced that growth rate vs. profit is high in case of company
owned and company operated option.
Conclusion and Recommendation
Considering the fact that Porcini’s long term strategy is to grow 5% annually through y2y till 2018, here
are following recommendation
• Launch Porcini’s pronto concept
• Grow via company owned and operated approach
• Pilot to determine the long run potential of the pronto’s concept.
Debasis Chakraborty International Business School EMBA Porcini Pronto Case

3. Reference
Failure of the Pronto’s concept • Two pronto’s pilot
• Company owned and operated model
Damage to the Porcini’s
repudiation
• Maintained strict quality control of the food and service
• Direct Management involvement
Pronto’s improper location • Traffic strategy
• Marketing and branding
Market and Industry velocity • Balanced expansion
• Value for money
Exhibit 1: Risk and Mitigation Strategy
Strength Opportunity
• Reputation
• Quality food
• High quality of service
• Powerful Design to meet Fast
service
• Highly trained staff
• Expansion throughout in national
• Create strong Brand value
• Put near highway exit and most busy places in
town Centre
• Attack Travelers with fast food and drink options
Weakness Threat
• Recourse constraints
• No brand Power
• Slow growth rate
• Complete with already established market player
• Reputation lost in franchisees model
• Limited selection of foods
• Lost control of process
• Restaurant is Saturated in town centers
Exhibit 2: SWOT Analysis
NAV @2.5% Growth rate
Company owned and operate $6.5 Million
Syndicate $4.4 Million
Franchisee $3.2 Million
Assumption: Franchisees costs including in 94% margin, Pronto’s growth rate =Industry rate = 2.5%, Hurdle
Rate = 6%, All values are in Pretax, If we analysis the NAV vs. Potential growth. Porcinis’ Strength + Matching
value driver = Potential for above average growth .With 2.5% growth it will be 10% , with 6% it is 14% and with
8% it is 23%.
Exhibit 3: Cumulative Profit Analysis
Parameter
Current Growth rate 2.5%
Discounted rate 6.00%
Cost
Cost per Pronto $21,00000
Cost to syndicate $25,00000
Cost to franchisee $10,00000
Revenue
Revenue per Pronto’s $24,00000
Debasis Chakraborty International Business School EMBA Porcini Pronto Case

4. Company own Syndicate Franchisees
Short run return
Long Run return
Pilot Concept
Maximized Risk
Protect Porcini brand
Exhibit 4: Greatest Prospects With Company own and operate vs. Syndicate and
Franchises
Exhibit 5: Bigger picture and way to move forward, Options to Porcini Pronto,
Success Mantra for Pronto’s growth and success, Balance growth strategy for Pronto
Debasis Chakraborty International Business School EMBA Porcini Pronto Case