PE Profit Ladder Articles
2026 Will Be a Busy Year for Franchise M&A
Happy New Year just around the corner! 2026 is setting up to be an active year for franchise M&A. Much is being made in the press right now about the overhang of PE-backed businesses (31,000 according to Bain), many of which have been held awhile (7+ years average hold time,) and must be sold in order to return money to investors. Yes, continuation funds have allowed some investor-swapping to release prior groups and bring in new investors on the same asset. In the case of franchise platform investments specifically, this is not a case of kicking the can down the road, but allowing more time to fully integrate acquisitions and unlock significant enterprise value. This is especially true if platforms dip into smaller brands (or corporate brands with the intent to start franchising) - something many are now forced to do just because there aren't enough scale businesses for sale. Bankers and advisors are busy getting the first group of 2026 sale candidates ready. I've seen more companies represented by multiple advisors recently, especially for assets that aren't as shiny as they should be, perhaps a signal that sellers still anticipate challenges in 1H2026 and thus a desire to cast the relationship net as wide as possible to find buyers. We continue to see new entrants - new funds and family offices investigating franchising for the first time. I'm looking forward to an active and possibly crowded selling year. If you're thinking about selling in 2026 or early 2027, its never too early to start preparing!
1H2026 On Track To Be A Busy M&A Year - Including For Franchising
According to Private Equity Wire and Reuters, citing Pitchbook data, 2025 is poised to be a strong year for private equity (PE) asset exits. Buyout firms have completed over 1,300 exits through October, compared to 1,368 for all of 2024. We observed a notable increase in activity in the late summer and early fall within the franchise sector. However, these exits do not necessarily indicate new PE firms entering the market. Many are continuation funds that allow earlier investors to exit while new investors come in, all under the same PE sponsor's management. A 2025 Bain study indicates that we are still addressing an overhang of approximately 29,000 PE assets, many of which need to be traded following a 2.5-year exit slowdown. Current trends suggest a busy first half of trading in 2026!
Can Brands Create Empire Builders? Or Do They Have To Recruit An X Factor?
How much franchise unit success is the operator versus the brand, system, and training?
Roark Explores Sales of Nothing Bundt Cakes
People think of Roark Capital as a "long hold" investor - which is a fair generalization given that they have held some of their franchise investments for decades. But they also selectively divest. The latest example: Nothing Bundt Cakes, which has seen changes under Roark and some unit level consolidation as well as continued expansion. It is a reminder that even if your brand is acquired by "long-hold" Roark, it may trade again across the PE Profit Ladder.
Q3 Dealmaking Volume Picks Up
As discussed this week at Franchise Springboard, we are seeing the same Q3 dealmaking uptick in the franchise sector. Expectations are for a busy rest of this year for M&A teams. For founders looking to get something done in 2026, don't exit this year without a plan! What pre-work needs to get done now? What are key initiatives to achieve your objectives in 2026? What documentation needs to be gathered and prepared as part of your year-end wrap up? Get your advisors involved to help you get organized and build the right plan. Reach out if you need assistance and/or referrals.
Big Question: Should I Sell Multi-Pack Deals to Increase Franchise Value?
Does selling multiple territories at a time lead to increased enterprise value? How can brands compete for attention in broker networks when other brands are pushing multi-unit agreements? What is private equity's impact?
Freddy's Sold For $700M to New Private Equity Owner
Freddy's Sold For $700M to New Private Equity Owner
How to Handle Today's Common Franchise Development Challenges
Common challenges seen in franchise development today, and how to turn growth back on.
Proliferation of Franchise Incubator Hybrid Investor-Operators
Incubators & multi-brand platforms play an increasingly critical role in franchising to lift emerging brands. In this case... even launching brands into franchising, such as this latest example with Gregorys Coffee & Craveworthy Brands. For ambitious sponsor-operator-hybrid firms the field remains wide open, since there are far more sub-scale franchise brands than there are investors willing and able to assist. This takes grit, proven support systems, and strong sector experience as is the case here with Craveworthy. Several new incubators have been recently announced in fitness, home services, and other sectors. We will continue to see more incubator-style operating groups in franchising attempting to acquire and lift young brands. Good news for their brand partners, but yet another headwind facing unaffiliated emerging brands.
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