<p><a href="https://www.greenwich.co.uk/andrew-gilligan/1876-frank-dowling-loses-his-temper/">https://www.greenwich.co.uk/andrew-gilligan/1876-frank-dowling-loses-his-temper/</a>&nbsp;&nbsp;</p>

<p>&nbsp;</p>

<p>On 3 Aug 2020, at 03:23, Stephen Nurse &lt;<a href="mailto:nurse_stephen@hotmail.com">nurse_stephen@hotmail.com</a>&gt; wrote:</p>

<p>﻿</p>

<p>NickC, StephenP and myself met with Frank Dowling, at his pub the Trafalgar Tavern, in Greenwich, this afternoon. We spent the best part of 2 hours with him and about half an hour debrief amongst ourselves.</p>

<p>&nbsp;</p>

<p><strong>My conclusion</strong></p>

<p>I was personally extremely impressed with Mr Dowling.&nbsp; I believe he would be able to turn around the pubs and I think he is someone we can constructively work with. He will add significant value very quickly and can hit the ground running.&nbsp; &nbsp;He recognises that we financial success driven and respects those objectives. He was happy to align interest accordingly. &nbsp;</p>

<p>&nbsp;</p>

<p><strong>Firstly, what I &quot;observed&quot;, and what it indicated to me:</strong></p>

<ul>
	<li>The end product: The Trafalgar looks to be a very well run pub. They are clearly busy and the focus is clearly on making money. &nbsp;&nbsp;
	<ul style="list-style-type:circle">
		<li>The enclosed photos are from about 6.30pm today</li>
		<li>Coincidentally, I was in this pub on Friday evening from about 10pm-11pm. It was heaving.</li>
		<li>He renovated the second floor during lockdown. It looked amazing, and clearly optimised for revenue.</li>
	</ul>
	</li>
	<li>His relationship with his staff was very hands-on and no nonsense. I noticed this when instructed his staff when we first arrived - and he mucks in.
	<ul style="list-style-type:circle">
		<li>When they were rearranging the tables etc, Frank was first to the task and beckoned the others to help &ndash; who jumped</li>
		<li>Refreshments arrived asap; the drinks he ordered for us were soft drinks, not alcohol.</li>
	</ul>
	</li>
	<li>He had a typed list of each of the pubs prepared, and he knew where in London they all were etc</li>
	<li>He lives next door to his pub. Literally next door</li>
	<li>He was shabbily dressed; he looks like a bulldog chewing a wasp. &nbsp;This is actually a compliment</li>
	<li>My take&hellip;.
	<ul style="list-style-type:circle">
		<li>He has the respect/attention (fear) of his staff. He is definitely not a stand-off manager. &nbsp;He is definitely &ldquo;on it&rdquo;</li>
		<li>He is a doer, not a stay-behind-the-lines-general. Leads by example</li>
		<li>It&rsquo;s not about him &ndash; it&rsquo;s about the pub/the business -&nbsp; no flash clothes/watch. But he is proud of his business</li>
		<li>He wasn&rsquo;t there to schmooze/sweet talk or try to make it personal (hence soft drinks); it&rsquo;s all about the commercials.&nbsp; So, not trying to &ldquo;impress&rdquo;/bluster. &nbsp;</li>
	</ul>
	</li>
</ul>

<p>My conclusion: From a personality perspective, he is the exact antithesis of JM. He was all about the hard work and getting it done. He will definitely muck in. None of the fluff and promise. He really knew the details of the business and I doubt much gets by him.</p>

<p>&nbsp;</p>

<p><strong>What he said&hellip;.</strong></p>

<p><strong>&nbsp;</strong></p>

<p><strong>About pub operations</strong></p>

<ul>
	<li>He was all about the details.&nbsp; He had numbers straight at hand about the percentages we should be expecting to make on wet sales and FAB etc. All with ranges.</li>
	<li>He cited salaries for staff, chefs etc.
	<ul style="list-style-type:circle">
		<li>Chefs &nbsp;are on ~&pound;50k &ndash; he thought Henry Harris at 150k was plain wrong</li>
	</ul>
	</li>
	<li>Very focused on the details.&nbsp; He was even desperate to show us the weekly ePOS results on his iphone.&nbsp; Commented on the fact that CV19 was a positive to avoid slippage due to cash sales.</li>
	<li>He was familiar with EIS but had not financed any of his ventures that way</li>
</ul>

<p>&nbsp;</p>

<p><strong>What he can do, when and how much</strong></p>

<ul>
	<li>He has capacity to apply resources to this &ndash; he a GM from Bristol he needs to redeploy and he said he was a bit bored himself</li>
</ul>

<p><strong>&nbsp;</strong></p>

<p><strong>His suggestions on next steps/how to engage</strong></p>

<ul>
	<li>He did talk about a couple of other alternative operators (Walsh - Citypubs) and encouraged us to talk to them to &lsquo;kick the tyres&rsquo;.&nbsp; He did not deride any of his competitors</li>
	<li>He said regarding any arrangement with him to &ldquo;keep it simple&rdquo; and make it success driven.
	<ul style="list-style-type:circle">
		<li>No lock-ins.</li>
		<li>Shareholder representation on all the key decisions.
		<ul style="list-style-type:square">
			<li>He is not demanding total control, more a partnership &ndash; though I do suspect he will recognise the investors are financial investors only, so I am sure he assumes operational latitude</li>
		</ul>
		</li>
	</ul>
	</li>
</ul>

<p>&nbsp;</p>

<p><strong>Incidentally, what he told us about JM</strong></p>

<ul>
	<li>He had a reasonably good read on JM, through his contact at Savills (Dan Mackerman)
	<ul style="list-style-type:circle">
		<li>DanM has been &ldquo;over-sharing&rdquo; so we should probably not discuss this outside of this email group. &nbsp;</li>
	</ul>
	</li>
	<li>Said that Dan had sat in on an Ops meeting in the Crown and that JM and RR had identified 150k of savings on Tronc off the bat. &nbsp;</li>
</ul>

<ul>
	<li>&nbsp;</li>
</ul>

<ul>
	<li>Told us a bricks and mortar valuation instruction (no operator) was a ploy to suppress the valuation</li>
</ul>

<ul>
	<li>&nbsp;</li>
</ul>

<ul>
	<li>JM was pleased to get a low valuation &ndash; notable because that was the first time he had seen that.&nbsp; I think we know why.</li>
</ul>

<ul>
	<li>&nbsp;</li>
</ul>

<ul>
	<li>From our description of the numbers, he suspects some sort of shenanigans.
	<ul style="list-style-type:circle">
		<li>Note: DanM is the person at Savills that I called to get the valuations when JM wasn&rsquo;t forwarding the valuations (his contact details were on the bottom of the email JM forwarded to explain the delay).</li>
	</ul>
	</li>
</ul>

<ul>
	<li>
	<ul style="list-style-type:circle">
		<li>&nbsp;</li>
	</ul>
	</li>
</ul>

<ul>
	<li>
	<ul style="list-style-type:circle">
		<li>Given we are still awaiting the Crown valuation and that Dan had told me Friday (10 days ago) that is was due later that day, I tempted to call DanM again in the morning and do some more digging. &nbsp;Agree?</li>
	</ul>
	</li>
</ul>

<ul>
	<li>
	<ul style="list-style-type:circle">
		<li>&nbsp;</li>
	</ul>
	</li>
</ul>

<p>&nbsp;</p>

<p><strong>Motivations </strong></p>

<ul>
	<li>We asked what his motivations to get involved were..</li>
	<li>He said he was under-utilised at the moment. The word he used was &lsquo;bored&rsquo;.&nbsp; He was due to start work on a hotel next door (sandwiched between the pub and his personal home &ndash; really) but that he was delaying that for CV19 reasons, and he was losing a pub in Bristol (end of lease) in September.
	<ul style="list-style-type:circle">
		<li>To me, that actually made some sense.&nbsp; He has managed multiple pubs concurrently in the past.&nbsp; He said over his career he has run 30 pubs/restaurants</li>
	</ul>
	</li>
	<li>He said he saw the injustice of what JM has done and would want to help correct this
	<ul style="list-style-type:circle">
		<li>This felt a little too convenient a response to me (like when you say in a job interview that you are &ldquo;too diligent&rdquo;).&nbsp;</li>
		<li>In truth, I did get a sense he disapproved of the entitlement of JM and he is clearly a passionate/pugnacious man, but that response did worry me a little as a bit too convenient.</li>
	</ul>
	</li>
</ul>

<p>&nbsp;</p>

<p><strong>His colourful past</strong></p>

<ul>
	<li>Nick asked him directly about his colourful past.</li>
	<li>He was very direct about his arrest and detainment and prosecution from the HMRC and the genesis of the argument.</li>
	<li>Bottom line is that he won the debate he is awaiting a settlement back for damages.&nbsp;</li>
	<li>He told us he spent &pound;700k on his defence (and was awarded &pound;400k costs). &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<ul style="list-style-type:circle">
		<li>He went for a top QC and he is a fighter</li>
		<li>Personally I see this as an asset.&nbsp; He was certainly not evasive and I think this experience may indeed help us with any come back with JM. He will not be shy</li>
	</ul>
	</li>
	<li>Nick also asked about his personal financial situation, to make sure he was stable.&nbsp;
	<ul style="list-style-type:circle">
		<li>He volunteered details including the history of his mortgage. Again, no airs or graces, no self bluster, no self importance.&nbsp; And the conclusion seems to be that he is financially stable but still hungry (he volunteered that his house was worth 5.75m, and he does have a mortgage).&nbsp; He is married with 2 kids + 1 on the way</li>
	</ul>
	</li>
	<li>Nick also asked if he wanted to invest&nbsp; (testing for whether this was a cheap fishing exercise?) -&nbsp; and he said that he wasn&rsquo;t that he was in invest mode on the Trafalgar but could find about 400k to redirect. Again, the right balance in my mind</li>
</ul>

<p>&nbsp;</p>

<p><strong>&nbsp;</strong></p>

<p><strong>Questions he asked us</strong></p>

<ul>
	<li>He asked a lot about the numbers, and the financials. We gave him some high levels but not the full story &ndash; frankly not sure we have that.</li>
</ul>

<p><strong>&nbsp;</strong></p>

<p><strong>Cutting to the chase - My opinion</strong></p>

<ul>
	<li>He is definitely the high Beta option. &nbsp;
	<ul style="list-style-type:circle">
		<li>On the positive, he doesn&rsquo;t come with the corporate costs of a CityPub etc, while having the experience and know-how to make money.&nbsp;</li>
		<li>However, if it went badly he would be a tough advisory</li>
	</ul>
	</li>
	<li>I think he will be truly transformative and given the structure of EIS (upside tax free, downside dampen), ironically high beta is actually the right approach, especially from our starting point now</li>
	<li>I suspect that once freed of the Ducalian/Harcourt Inn fee drag, he will soon produce significant FCF to pay down debt.</li>
	<li>I suspect he is used to making material returns after paying &lsquo;rent&rsquo; to landlords &ndash; so I think he will get us back to par in a few years.</li>
	<li>Also, in any fight with JM &ndash; he will &nbsp;crush him.&nbsp; &nbsp;</li>
</ul>

<p>&egrave; Ducalian is the safe option. However, Dowling gets my vote, not only because it frees us from some of the difficult optics of re-employing Ducalian, and I think will help carry the other investors</p>

<p>&nbsp;</p>

<p><strong>&nbsp;</strong></p>

<p><strong>Next steps</strong></p>

<ul>
	<li>I think those who have not met him should definitely do so, and form your own opinion.</li>
	<li>I will adapt the website to share the financials, but no the shareholder list nor the Ducalian plan &nbsp;</li>
</ul>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p><strong>First cut of a proposal</strong></p>

<ul>
	<li>I think something short and sweet. He proposed &pound;200k pa to fund the ops manager, chef and some of his time and the remainder on a cost basis (separable by pub).</li>
	<li>Success element of [15]% of GOP, where GOP excludes the debt servicing costs but includes some reasonable &ldquo;rental&rdquo; yield for investors</li>
	<li>Rolling 6 months.</li>
</ul>

<p>&nbsp;</p>

<p>&nbsp;</p>