After Cracker Barrel's botched rebranding campaign kicked up a culture war-fueled maelstrom nearly a year ago, its board of directors huddled to consider options.
Some directors asked Chief Executive Julie Masino if she was still up for managing a company through a controversy that even President Trump had weighed in on -- and which had also threatened her own security, according to people familiar with the matter.
Masino, who had overseen the rebranding, said she wanted to stick it out, the people said. Internally, she continued to project engagement in the turnaround effort.
But the board also started exploring succession options. The controversy caused the company's valuation to plunge and stirred up a longtime activist investor. Cracker Barrel directors decided they needed to identify candidates if Masino decided to bow out, or was pressured into an exit, the people said.
Masino spent weeks personally fighting the activist's and critics' efforts to oust her, meeting with investors ahead of a November proxy vote. Shareholders voted around 75% of shares in favor of keeping Masino as CEO.
But after the fall, Masino began to privately indicate that she was tiring of the fight, according to the people. While trying to position Cracker Barrel for the future, she had become the public face of its biggest controversy in years. The battle had carried on for months, and was wearing on her.
Cracker Barrel announced on July 27 that Masino would depart this month, succeeded by David Deno, a restaurant industry veteran and former CEO of Outback Steakhouse parent Bloomin' Brands. The move shocked staff, rattled investors and even caught off guard some close to Masino, according to people familiar with the discussions.
Deno, who took over as Cracker Barrel's CEO this week, intends to stick with much of Masino's strategy to rebuild sales and improve profit by focusing on food quality and customer experience, people familiar with the company said. Before starting the role, the executive traveled to the company's headquarters to introduce himself to rank-and-file employees in addition to higher ups .
Shares of Cracker Barrel have gained about 4.3% since the chain announced Deno's appointment.
Fighting back
By last January, the southern-cooking chain was at a low. The blowup over Cracker Barrel's new logo had dented business, and its stock started the New Year at around $25 a share, its lowest level since the 2008 economic downturn. To conserve cash, Cracker Barrel was cutting corporate jobs and enforcing stricter rules. Morale was down.
Masino saw reasons for hope: Tests showed customers responding to efforts to enhance Cracker Barrel's food and service, according to people familiar with the company's business, and market research showed improving sentiment toward the chain.
"We are encouraged that we continue to welcome back more guests," Masino told investors in March.
At the same time, Masino was aware of the board of directors' process and the search's timeline. The same Spencer Stuart recruiter who brought Masino to Cracker Barrel was also retained to find her replacement, according to people familiar with the search.
Masino, a former Taco Bell executive, came to Cracker Barrel in 2023 with a mandate for change. The chain had been struggling for years with declining traffic and an aging clientele, and Masino gave herself three years to implement a turnaround strategy.
While early efforts showed promise, the chain's move to change its longtime logo and pull tchotchkes off restaurant walls set off a firestorm last summer.
Within weeks Masino pulled a U-turn, dumping the new logo, dropping the marketing firm behind it and pausing restaurant remodels, bringing back proven sellers like campfire meals and ham dinners.
The chain's business began stabilizing, and the board's executive committee started looking into finding Masino's successor. By January, the Spencer Stuart headhunter had started calling current and former restaurant industry executives, the people familiar with the search said, to inquire about their interest in coming to Cracker Barrel, including current public company CEOs.
Cracker Barrel in June delivered a more upbeat outlook, sending shares soaring 23% the following day. Tests to improve food quality were expanding, though more work was still needed, people familiar with the company's affairs said.
In July, Cracker Barrel announced it would sell off some restaurants and a separate brand to reduce its debt. "These actions demonstrate the progress we are making against our strategic priorities," Masino said.
Seven days later, Cracker Barrel announced her departure. "We wish Julie all the best in her future endeavors," the chain's lead independent board director said.
Deno-mite
Deno had spent 12 years at Outback Steakhouse owner Bloomin' Brands, rising from chief financial officer to CEO. In addition to navigating the Covid-19 pandemic, Deno faced two activist investors.
After stepping down in 2024, Deno joined the Panera Brands board. On LinkedIn, he frequently congratulated old colleagues on their career moves and marketing campaigns.
Deno's hiring at Cracker Barrel has already had ripple effects. The company's stock initially fell after the announcement, and some staff and analysts questioned the rationale behind Masino's departure.
The executive transition is also costly for Cracker Barrel. The company agreed to pay Masino $4.6 million over a two-year period under terms of her separation agreement. The company will also continue to provide Masino benefits, including protection services, as necessary.
Deno's pay package calls for a base salary of $1 million, an annual bonus and stock awards, according to company filings.
Deno is soon slated to partake in leadership training, a ritual for all new Cracker Barrel field recruits. Earlier this month, he and other Cracker Barrel executives attended the company's annual off-site conference in Orlando, Fla., where last year the new logo was unveiled.
Masino didn't attend the conference. She was at the company's Lebanon, Tenn., headquarters, where she appeared more relaxed, some of the people said.