Red Robin's activist investors leave the board after turnaround
James Pappas and Chris Martin joined in 2024 to force a balance-sheet fix. Two years, 108 sold restaurants and a refinancing later, they're stepping down.
Red Robin's two activist board members, James Pappas and Chris Martin, have resigned, the Colorado-based burger chain said this week, after the balance-sheet overhaul they pushed for in 2024 is largely complete.
Pappas, of JCP Investment Management, and Martin, of Jumana Capital Partners, joined Red Robin's board in December 2024 after their firms made an $8.3 million investment and built a combined stake that reached 20%. The deal came with a cooperation agreement giving them board seats in exchange for support on debt reduction.
Both resigned effective 23 October 2026, according to a filing with the US Securities and Exchange Commission. Red Robin said the departures were not linked to any disagreement over the company's operations, policies or practices, and the investors waived their right to name a replacement director.
A clear opportunity to improve operations and strengthen the balance sheet, now accomplished.
The board will now count six directors, five of them independent.
What the investment paid for
Red Robin sold 108 company-owned restaurants this year across three transactions, for roughly $89.4 million, using the proceeds to pay down debt. It also refinanced onto a new five-year, $115 million senior secured credit facility led by JPMorgan Chase, replacing a prior facility that had $167.2 million outstanding as of July and was due next September.
Chief executive Dave Pace thanked the pair for helping the company navigate what he called "a highly complex path to firming up our balance sheet." Pappas and Martin said in a joint statement that they saw "a clear opportunity to improve operations and strengthen the balance sheet" when they invested, and consider that mission accomplished.
Pappas is the son of Pappas Restaurants chief executive Chris Pappas and has previously taken activist stakes in Fiesta Restaurant Group, Jamba, Dine Brands and The Cheesecake Factory.
Same-store sales turn positive
The refinancing and refranchising ran alongside changes to food, value and marketing. Same-store sales rose 1.3% last quarter, Red Robin's best result in more than three years, while restaurant-level operating margin improved 20 basis points to 14.7%.
The stock has gained about 45% since the start of 2025 and rose a further 3.5% on the day the board changes were disclosed, to $8.48 a share.
Red Robin reports third-quarter results on 4 November, the first earnings call since the activists' exit.
Not every burger chain is finding the same traction: Byron, in the UK, reported a £1.5m loss this year as its turnover fell.
