Be Our Guest, Inc.

Be Our Guest, Inc.

Steve Lizio, Al Lovata and Simone Williamson met in the spring of 1998 to review the

financial plans for their company in preparation for a meeting with Anne Granger, Vice President at

State Street Bank. She was the loan officer in charge of the bank’s relationship with Be Our Guest,

Inc., a successful company in the business of renting party equipment. The management team was

scheduled to meet with Granger to review the borrowing relationship and discuss renewal of the

company’s credit line that would expire in June.

Be Our Guest had moved its banking relationship to State Street in October 1996. As of the

end of 1997, the company had a fully used line of credit totaling $140,000 and a term loan with an

outstanding balance of $318,000, due over the next four years. Looking ahead to the meeting, the

management group needed to decide how large a line of credit to request for 1998. In addition, they

were considering whether some of their borrowing should be shifted from short-term borrowing

under the line of credit to the more permanent financing provided by a term loan. Finally, given the

company’s successful track record of the past few years, they were also considering whether to

request any adjustments in the covenants imposed by the bank.

History of Be Our Guest

Stephen Lizio, who had substantial experience in the wine and food business, founded Be

Our Guest in 1983. The firm initially provided temporary wait-staff and other services to catering

companies, but the business concept evolved in the mid-1980s as the firm began to rent tables, chairs

and other equipment to the caterers. Lovata, who was formerly a banker with one of the large

Boston-based banks, began providing part-time financial consulting for the business in 1987. Lizio

brought him on full-time as Chief Executive Officer in September of 1988 as Lizio assumed the role of

Chairman.

The new business strategy received a big boost in 1988 when the food industry in Boston

sponsored a major fund raising event on the floor of the Boston Garden, home of the Boston Celtics

basketball and Boston Bruins hockey teams. The event, called Aid & Comfort, attracted 1,000

supporters and brought together a large percentage of the wine and food service industry from the

Boston area. Major caterers provided the food service for the event and Be Our Guest contributed the

equipment for several of the catering firms.

Simone Williamson was added to the management team the next year. She had several years

of experience in the food service business and was well known to caterers in the Boston area. Her job

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was to manage the day-to-day operations and improve the efficiency of the firm. In 1996, Williamson

was appointed President of the firm.

Be Our Guest grew rapidly from its small beginnings, reaching revenues of $1 million in 1991

and $2.7 million in 1997. The company’s primary customers were catering firms and event planning

firms that had been hired to provide food and beverages for parties, weddings or other events. Major

hotels also rented equipment from Be Our Guest when they had an unusually large party or were

catering an outside affair.

Lovata described how they built the business:

In the early days, we were a secondary firm. Our pitch to caterers was “Let

us help you out when you have a big job or a special need that your regular supplier

cannot meet.”