PE Profit Ladder Articles
Jersey Mike's Sold To Blackstone for $8B
When you build a more valuable business FOR YOUR FRANCHISEES you win at exit. ..."only" 3,000 locations, $1.3M AUV, sold for $8B. Compare that to Subway with AUVs less than half JM's performance, 36,500 locations, sold for $9.6B. JerseyMikes continues to crush it. Now Blackstone simply needs to avoid messing up a great business.
Tropical Smoothie Has a New CEO
The Tropical Smoothie Cafe case study appears in Big Money in Franchising because it shows what can be accomplished when a management team and PE sponsors both put franchisee outcomes and a great culture first. Charles Watson, CFE has had an incredible 16 year run @ TSC, the last 6 as CEO. These are big shoes for the new incoming CEO to fill.
Entreye Podcast Interview
Themes from this podcast: ▶ State of franchise brands in the US ▶ Private Equity's Value in Franchising ▶ When is the best time to attract PE investment ▶ Best way for brands to prep for PE, and things to avoid ▶ Reg flags PE looks for in Franchise brands ▶ PE's on the franchise development pipeline ▶ PE's interest in unglamorous industries ▶PE's role in enhancing value through platforming
Looking Ahead to 2025, Remember Franchise Ownership is Personal
Looking Ahead to 2025, Remember Franchise Ownership is Personal
Finance Book Club Interview
Finance Book Club Interview and broad discussion about private equity in franchising with live audience Q&A.
Are PE Franchise Investors in a Funk?
Is private equity in franchising stuck in a funk? Deal volumes are way down and it's challenging now to create great exits, especially if buyers leaned in a few years ago and bid high while interest rates were low. But don't be fooled by the temporary M&A activity slow down! PE's interest in franchise businesses remains resilient. For example, both the Create Emerging Restaurant Investment Conference (Nashville, October) and the Restaurant Finance and Development Conference (Las Vegas, November) are expected to be packed with investors looking to connect with great brands and teams. The franchise business model is attractive and long term growth prospects for franchising are strong. In the short term, some PE sponsors may take "good" rather than "optimal" exits to return cash to investors, including trades between continuation funds. But PE will continue to invest in franchising because the model is attractive and resilient. It's also a great time to a proven operator, since PE is hiring operating talent to help transform and accelerate their holdings. Recruiters are busy! PE must hit their acquisition business case. Behind the scenes, PE firms, M&A advisors, legal teams, and CPAs are preparing for what is predicted to be an upswing in deal activity in 2025. And a few impressive deals are still set to close this year...
Consider These Points When Selling Franchises During A Contentious Election Season
"Election jitters" can negatively impact the franchise development process. If your franchise sales have stalled, or you're suddenly hearing "We're going to wait" from prospective franchisees, here are tips to reboot growth.
Franchise Sales Disclosures Improved in California, Model For Other States
California signed into law new requirements for franchise sellers related to disclosure and registration.The law was developed over a two year period through an alignment of stakeholders across franchising led by the IFA, AAFD, and CFA. The objective is to provide prospective franchisees with full transparency about the role of franchise sellers and how they are compensated, which is important information that should be included in the due diligence process. This is likely to be a model followed at least in part by other states. The legislation will go into effect July 1, 2026.
Key Takeaways from Springboard Conference: M&A Session "Art of the Deal"
Key takeaways from the panel of M&A experts at the 2024 Springboard Conference, moderated by Alicia Miller of Emergent Growth Advisors: "The Art of the Deal - How founders can prepare in advance to achieve the best possible outcomes." 1) First and foremost: focus on unit level economics - profitable & happy franchisees build maximum enterprise value! So simple, yet often overlooked! 2) Collect franchisee P&Ls AND cash flow statements from the beginning and use that information to coach to better results. Buyers will want to cut this data multiple ways 3) Recruit franchisees carefully - quality over speed 4) Ensure you're opening what you're selling or that sold-not-open funnel will go from looking attractive to being a liability. If you can prove you're opening them and ramping franchisees to profitability quickly, you may be able to recapture some of that SNO value in a transaction (aka "full maturity value") 5) Get to know the landscape of potential buyers early - socialize and look for cultural fit 6) Track record matters, especially if you plan to roll equity (and most buyers want you to do this) 7) Know what you want to accomplish and what you're looking for in a potential capital partner 8) Deal terms can be tricky - experienced advisors can help you navigate 9) Franchising continues to see robust buyer interest, but there is still a bit of a gap between buyer and seller expectations 10) It's tough to make forward predictions, but the panel was pretty optimistic that 2025 is going to be a busy year for franchise M&A
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PRIVATE EQUITY’S IMPACT ON FRANCHISING
EMERGING BRANDS
TRENDS
BUILDING SMART
PROSPECTIVE FRANCHISEES
TURNAROUNDS & CASE STUDIES